Incidents:
The company announced the 2019 Employee Stock Ownership Plan: Qianhong Pharmaceutical No. 1 and Qianhong Pharmaceutical No. 2 mainly obtained and held the underlying shares by transferring listed companies to repurchase shares. The price of repurchased shares transferred No. 1 is 2.8 yuan/share, and the duration is 48 months. The repurchase price of shares of Transfer Company No. 2 is 4.8 yuan/share, and the duration is 24 months.
Investment points:
The employee stock ownership plan further enriches the incentive system and achieves consistent interests.
Following the announcement of the restricted stock incentive plan in 2017, the company once again announced the employee shareholding plan. This time, the participants were key personnel and senior managers of the company or holding subsidiaries, with a total of no more than 111 people, respectively. However, judging from the basic personnel conditions (who have not participated in the company's IPO or 2017 restricted stock incentive plan) and specific conditions (sales area manager (including internship), supervisor/team leader/specialist and above), the selection of personnel this time took into account key personnel who have been hired for a short time, reflecting the further expansion of the scope of company incentives and fully mobilizing the enthusiasm and creativity of employees. In addition, the company's directors, supervisors, and senior management also participated in this employee shareholding plan, demonstrating management's confidence in the company's development. In addition, the transfer price comparison of No. 1 and 2 will further boost investors.
The innovative drug platform is progressing smoothly to ensure the company's long-term good development.
The small molecule platform QHRD107 project has entered the first phase of clinical trials; the QHRD110 project is carrying out integrated pre-clinical research and development and clinical application work. However, the ZHB202 and ZHB206 projects of the macromolecule platform have all completed pre-clinical research work and are undergoing clinical application work. We believe that as innovative drugs continue to advance, the product line has been further expanded, and products with great potential will provide the foundation for long-term development.
Maintain the “Recommended” rating.
We maintain our previous forecast. We expect the company's EPS in 2019-2021 to be 0.22 yuan, 0.26 yuan, and 0.28 yuan. The company's performance is expected to accelerate in the second half of the year. We are optimistic about the company's long-term development and maintain the “recommended” rating.
Risk Reminder
Sales fell short of expectations; gross margin declined further; expenses continued to rise, etc.