Events:
Haixiang Pharmaceutical released three quarterly reports, with operating income of 2.376 billion yuan during the reporting period, an increase of 15.11% over the same period last year, and a net profit of 690 million yuan belonging to the parent company, an increase of 42.87% over the same period last year. The operating cash flow is 450 million yuan, which is basically flat.
Main points of investment
The dye sector fell back, reporting a month-on-month decline in the three quarters. Revenue fell 29% in the third quarter from the previous quarter, and net profit from home fell 34% from the previous quarter. There are two main reasons: first, the dye sector has a certain seasonality, the third quarter has always been the weakest demand; secondly, Sino-US trade friction, textile and clothing downstream demand is low. Looking forward to the fourth quarter, although the resumption of production in Yabang is more certain, it is more difficult to fully resume production in Yabang, and it is more likely to selectively produce some core varieties with high gross margin. At the same time, the company's 1-aminoanthraquinone and DCB have been put into production, brominic acid has been gradually put into production, Zhengang 18000 tons of dye project is also steadily advancing, the lowest point of the dye plate should have passed.
The pharmaceutical sector is still growing at a high speed. In terms of products, the current increment of the pharmaceutical sector is mainly Peinan intermediates, such as MAP, Penan side chain, etc., with volume procurement and location advantages make the company's strong cost control, integration advantages highlight the advantages of API suppliers. In the long term, the company's product layout has gradually extended from early anti-infective products to cardiovascular, metabolic, mental illness and immune products. The company's layout in the direction of Dabiga group ester and acarbose is more worthy of attention. In terms of land reserve, the company has a rich land reserve in southern Sichuan.
Profit forecast and investment rating: the company's operating income in 2019-2021 is expected to be 3.755 billion yuan, 4.686 billion yuan and 5.962 billion yuan respectively, the net profit returned to the parent is 1.009 billion yuan, 1.466 billion yuan and 1.881 billion yuan respectively, and the EPS is 0.62 yuan, 0.91 yuan and 1.16 yuan respectively. The current stock price corresponds to 11x, 8X and 6X respectively, maintaining the "buy" rating.
Risk hint: the production of dye projects under construction is not as expected, and the uncertainty of environmental protection policy in the dye industry.
