Event 1: the company released its annual report in 2019, with operating income of 1.782 billion yuan during the reporting period, an increase of 9.42% over the same period last year, and a net profit of 185 million yuan belonging to the parent company, an increase of 13.02% over the same period last year.
Event 2: the company released its quarterly report for 2020, with operating income of 433 million yuan during the reporting period, an increase of 12.58% over the same period last year, and net profit of 54.0759 million yuan, an increase of 43.31% over the same period last year.
The main business of chlortetracycline is growing steadily, and the level of gross profit margin continues to rise.
The company's feed additive business remained stable, with an income of 1.06 billion yuan in 2019, an increase of 1.8% over the same period last year. On the one hand, the stock column of the domestic downstream pig breeding industry fell to an all-time low in 2019, resulting in a decline in the company's main product chlortetracycline compared with the same period last year; on the other hand, since the United States began to implement prescription drug management of chlortetracycline products in 2017, the company has stepped up its overseas marketing efforts, and the overseas market, especially the US market, has achieved steady growth. Guided by cost control, the company takes technological innovation and process optimization as a breakthrough, comprehensive production capacity and key production technical indicators such as starch consumption, fermentation index and production cost have reached the best level in history, and the gross profit margin of the product has increased by 4.4 percentage points year-on-year to 50.3%.
The animal vaccine business turned from loss to profit, leading to performance growth in the first quarter.
The company's animal vaccine sector is still in the investment period to superimpose the impact of non-plague epidemic. In 2019, the company's animal vaccine revenue was 87 million yuan, down 30.0% from the same period last year. With the release of the company's vaccine products, Jinhe Youben and Fama Wei turned losses into profits, leading to a substantial increase in the company's performance in the first quarter. On the other hand, the company's vaccine product reserves have been further enriched, laying the foundation for future growth: porcine blue ear disease chimeric vaccine has obtained the USDA veterinary biological products license; four products, including inactivated porcine blue ear disease vaccine (CH-1a strain) and porcine blue ear chimeric virus live vaccine (PC strain), have obtained the National Department of Agriculture product approval number; brucellosis vaccine and pseudorabies vaccine are ready to be registered. At the same time, the company has jointly tackled the key problems in the purification and concentration process of vaccine antigen and multivalent vaccine, continuously improved the technical level, and carried out extensive cooperative research with domestic and foreign R & D institutions in the field of African classical swine fever.
Core competitiveness continues to improve, the company is expected to usher in Davis double-click chlortetracycline industry supply shows a duopoly pattern, compared with competitors, the company has larger revenue, higher gross profit margin and significant cost advantage. We believe that the demand of chlortetracycline industry is rigid, the competition pattern is good, and the company's leading position is stable, and has a certain pricing power. In the future, with the continuous mending of large-scale factories and the improvement of breeding concentration, the demand for the use of chlortetracycline is expected to further open. At the same time, the company will learn from the experience of the United States market and continue to increase technical marketing efforts, the domestic chlortetracycline business is expected to meet the volume and price rise. In addition, the company's animal vaccine business has been laid out for many years, the synergy between domestic and foreign platforms has gradually emerged, the company's animal vaccine product reserves are increasingly abundant, and the process technology continues to improve, and it is expected to turn losses into profits in 2020. Gradually become a new growth point of the company's performance.
Profit forecast and investment suggestion
According to the company's annual report, slightly adjust the profit forecast and introduce the 2022 profit forecast. It is estimated that the company's homing net profit from 2020 to 2022 will be 279,375,457 million yuan (the previous value is 280,375 million yuan for 20Compact 21 years), which is 51.05 percent, 34.08 percent, 22.03 percent, and 0.44 percent, respectively, to maintain the "buy" rating.
Risk hints: the risk of policy change; the risk of epidemic; the risk that new product expansion is not as expected.
