Event: 1) the company released its annual report for 2019. During the reporting period, the company realized revenue of 3.184 billion yuan, an increase of 0.68% over the same period last year, and a net profit of 192 million yuan, down 42.89% from the same period last year. 2) the company released its quarterly report for 2020. During the reporting period, the company achieved revenue of 893 million yuan, down 4.29% from the same period last year, and its net profit was 89 million yuan, an increase of 10.43% over the same period last year 3) the company announces the "profit distribution plan for 2019", which intends to distribute a cash dividend of 4.00 yuan (including tax) to all shareholders for every 10 shares, without using the capital accumulation fund to increase share capital.
When performance momentum momentum was in progress, a number of new drugs and innovative projects were steadily promoted in 2019. The new version of health insurance catalogue and auxiliary drug catalogue restrictions, medical insurance control fees, "two-vote system" and other factors continue to affect the company's current main products represented by blood transfusion. Wholly-owned subsidiary Youdu Pharmaceutical achieved revenue of 787 million yuan, down 21.56% from the same period last year, and net profit reached 130 million yuan, down 53.59% from the same period last year. In order to cope with the market changes, the company has taken the following measures:
Continue to carry out re-evaluation of listed products in order to improve the clinical value of products, including evidence-based medicine and re-evaluation project of Shuxuetong injection in Youbo Pharmaceutical Co., Ltd., and improvement of polysaccharide, nucleic acid and quality standards of BCG polysaccharide nucleic acid injection (Siqikang).
Steadily promote drug research and development, continue to carry out innovative projects, including: 1) anticoagulant first-class new drug LFG project. The project involves a new type of low molecular anticoagulant with new structure and new target, which breaks through the technical problem of serious bleeding risk existing in the existing anticoagulant drugs, and the safety is significantly improved. During the reporting period, the LFG project completed three batches of pilot production of APIs and finished products, completed all pharmacological and efficacy trials, and began to carry out preclinical safety evaluation. The project has obtained 13 patent authorizations in 7 countries and 2) stem cell projects. In November 2019, Beijing Meike, a subsidiary of the company's M & A fund, submitted an application to the National Drug Review Center (CDE) for the clinical trial of ischemia-tolerant human allogeneic bone marrow mesenchymal stem cells in the treatment of ischemic stroke, which was approved by CDE in the first quarter of 2020. The stem cell products involved in the project are funded by the company's M & A fund, Stemedica Cell Technologies Inc. The company independently developed; 3) the REMD-477 project of antibody drug for glucagon receptor, mainly carried out by Beijing Kexin Meade Biopharmaceutical Technology Co., Ltd., which is owned by the company, is the first clinical molecule for G protein coupled receptor developed in the world, and also the first antibody drug for glucagon receptor approved by FDA to conduct clinical trials of diabetes.
In compliance with the relevant policy of "Internet + traditional Chinese Medicine Service", Q1 was granted the practice license of Internet hospital medical institutions in 2020. In 2019, the company took a comprehensive inventory of the operation of the National Medical Center, relying on Tianjin Old traditional Chinese Medicine Hospital to set up Tianjin Old traditional Chinese Medicine Hospital Jiuzhitang Internet Hospital, which will explore the "Internet + traditional Chinese Medicine" service.
Profit forecast and investment suggestions: according to the financial report data of Q1 in 2019 and 2020 and the adjustment of financial data in 2017 and 2018 in the company's announcement on the correction of prior accounting errors; 2) the sales of the company's leading varieties of prescription drug products will be affected by policy factors such as health insurance restrictions and hospital fees. 3) as the research project is still in progress, or continue to generate large investment, we have reduced the company's net profit from 2020 to 2022 to 2.2 billion yuan (2.50 million yuan before the year 2020), corresponding to the corresponding EPS 0.23 pound 0.25 pound 0.29 yuan (the 20 pound before 21 year value is 0.29 billion yuan). Taking into account the continuous promotion of research and development of the company, the domestic leadership in stem cell technology, the re-evaluation of listed drugs and the layout of new businesses such as new drugs for diabetes, to maintain the "overweight" rating.
Risk tips: technology R & D risk, health insurance control fee, business development / project R & D progress is not as expected