Event: the company released its semi-annual report for 2020, with revenue of 580 million yuan, year-on-year revenue of 27.7%, net profit of 49.52 million yuan, year-on-year net profit of 40.9%, and non-return net profit of 49.57 million yuan, an increase of 45.8% over the same period last year, corresponding to an EPS of 0.40 yuan.
Core viewpoints
The revenue increased steadily and the net profit increased at a high speed. According to the semi-annual report, the company's revenue and return net profit increased by 27.7% and 40.9% respectively compared with the same period last year. It is worth noting that the growth rate of 20H1's homing net profit is higher than that of revenue, mainly due to: 1) benefiting from the advantage of scale, the increase in production and sales of paramivir sodium chloride injection diluted the cost of the product (gross profit margin increased by 3.46% year-on-year); 2) interest income from cash management.
During this period, the expense rate is relatively stable, and the next three years will be a period of rapid growth. With the release of the core product paramivir injection, the rate of sales expenses has slightly increased to 63.2%; the company's products are generally "fixed production by sales".
The way of organizing production can effectively reduce the backlog of inventory and improve the overall operational efficiency. We believe that thanks to the catalysis of factors such as academic promotion, the anti-influenza market is expanding rapidly, and as a new generation of anti-influenza drugs, paramivir has a better therapeutic effect, and its market share will increase rapidly in the next three years.
Investment in R & D has been further increased, and the pipeline for the creation of new drugs has been steadily advanced. During the reporting period, R & D investment totaled 46.19 million yuan, accounting for 7.96% of revenue. The company has a reasonable layout of anti-influenza pipeline and comprehensive dosage form coverage, in which paramivir inhaled solution is in phase I/II clinic; antineoplastic drug metafinil has entered Ⅰ b / Ⅱ a phase, and it is expected to declare with phase II data that the research and development of NDA; diabetic nephropathy fibrosis drug meflunone hydrochloride is progressing smoothly and has now entered phase I clinic.
Financial forecasts and investment suggestions
We predict that the company will achieve a net profit of 1.31 million yuan from 2020 to 2022, corresponding to 1.41 million yuan of EPS 0.93 plus 2.12 yuan. According to the comparable company to give a 20-year valuation of 97 times PE, the corresponding target price is 90.21 yuan, maintaining the "buy" rating.
Risk hint
If the research and development of innovative drugs is not as expected, it will affect the medium-and long-term development prospects of the company.
If paramivir and other products do not sell well, or if the expense rate remains high, it will affect the company's performance.