Wholly-owned subsidiary Yongtai Pharmaceutical preparation products approved by FDA in the United States, Yongtai Technology issued an announcement on November 5. Yongtai Pharmaceutical, a wholly-owned subsidiary, received notification from the US Food and Drug Administration (FDA) that the US generic drug application for rosuvastatin calcium tablets declared by Yongtai Pharmaceutical to the US FDA was approved, and the company was qualified to sell the product in the United States. We estimate that the company's EPS from 2019 to 2021 will be 0.47 won 0.66 won 0.86 yuan respectively, maintaining the "overweight" rating.
Rosuvastatin has a broad market, and approval of generic drugs will help enhance the influence of the company's brand. The original rosuvastatin was developed by AstraZeneca PLC in the UK and went on sale in the United States in 2003. according to IMS database, the global sales of rosuvastatin calcium tablets are about $3.978 billion from July 2017 to June 2018, including about $412 million in the United States and $3.461 billion from July 2018 to June 2019. Among them, the sales volume in the United States is about 295 million US dollars, which is one of the best-selling drugs for hyperlipidemia in the world. Yongtai Pharmaceutical's application for FDA approval of Rosuvastatin imitation pharmaceutical ANDA not only means that the company is qualified to sell the product in the US market and actively expand its sales network in the US market, but also marks the steady progress of the company's business in challenging patented products, which helps the company to enhance its brand image and improve the competitiveness of its products.
Yongtai Pharmaceutical preparation Project has officially entered the harvest period.
The Yongtai Pharmaceutical preparation Project has been completed in 2016 and has been consolidated. In November 2018, Yongtai Pharmaceutical Co., Ltd. has obtained the domestic drug GMP certificate and passed the FDA on-site inspection in the United States, but the approval has not yet been obtained. as a result, Yongtai Pharmaceutical achieved a revenue of 26.74 million yuan and a net loss of 25.46 million yuan in 2018. The approval by the FDA of the United States means that the preliminary investment of the Yongtai Pharmaceutical preparation Project has been basically completed and has officially entered the harvest period. as depreciation has been included in the previous period, it is expected that the follow-up performance is expected to turn a loss into a profit smoothly from 2020.
Maintain the "overweight" rating
We estimate that the EPS of the company in 2019-2021 will be 0.47-0.66-0.86 yuan respectively. Combined with the comparable company's valuation level (23 times PE in 2019), taking into account the differences in the company's business (comparable company's business is more inclined to electronic chemicals), we will give the company 21-23 times PE in 2019, corresponding to the target price of 9.87-10.81 yuan, maintaining the "overweight" rating.
Risk hint: the new project put into production is less than expected risk, raw material price fluctuation risk