One of the leading enterprises in the domestic contrast agent industry, Beilu Pharmaceutical Co., Ltd. is one of the leading enterprises in the domestic contrast agent industry, covering and giving a "buy" rating for the first time. By holding Haichang Pharmaceutical Company, it has completed the integrated layout of the API + preparation industry chain. Profitability is expected to be further enhanced. In recent years, the company has gradually set up a younger new executive team and core backbone talent echelon, and the growth rate of contrast agent revenue in 2019 has reached the best level in recent years, indicating the continuous improvement of the company's sales ability and internal management efficiency. We expect the company to achieve a homing net profit of 209 million yuan / 263 million yuan / 325 million yuan in 2020 / 2021 / 2022 respectively, with a year-on-year growth rate of-38.8%, 25.4%, 23.8%, respectively, and the current stock price corresponds to a PE of 25.1, 20.0, 16.1, respectively, giving a "buy" rating for the first time.
The contrast industry is a high-quality track with broad prospects. The growth of contrast media in the long-term development of the company's contrast agent business is mainly driven by the increase in the number of equipment and inspections such as CT and MRI. In terms of per million people, there is still much room for improvement in the number of CT and MRI equipment held in China compared with developed countries, and we expect the contrast agent industry to maintain a growth rate of about 15% in the future. In recent years, the company's iohexol and gadolinium meglumine have grown steadily, and iodopamol and iodoxalol have been released rapidly. Revenue declined in the first quarter of 2020 due to the impact of the epidemic, but the demand for contrast media is relatively rigid. as the hospital diagnosis and treatment order gradually returns to normal, we believe that the company's contrast agent revenue will improve quarter-on-quarter and year-on-year growth rate. In the long run, the competition pattern of the industry is good and the prospect is broad. We are optimistic about the long-term development of the company's contrast agent business.
The equity value of Shihe Genetics is expected to be revalued.
Founded in 2008, Shihe Gene is committed to clinical tumor accurate molecular detection, liquid biopsy and clinical transformation, is one of the leading domestic NGS sequencing enterprises, and currently holds a 16.38% stake. Recently, domestic NGS sequencing leading companies represented by Shihe Gene have gradually entered the capital market. Shihe Gene has entered the stage of IPO tutoring. Nuohe Zhiyuan has submitted Science and Technology Innovation Board's prospectus. Burning Rock Biotech Ltd. was listed on the Nasdaq Stock Exchange on June 12, 2020, with a market capitalization of US $2.512 billion (about 17.6 billion yuan) after the first day of trading. The company's 16.38% stake in Shihe Gene is expected to be revalued.
Risk hints: the domestic epidemic may repeatedly lead to slow recovery of diagnosis and treatment order in medical institutions, drug sales are not as expected; contrast agents are included in national or local collection, drug prices are reduced by more than expected; contrast agent competition intensifies.
