Report guide
2020Q3 homing net profit growth improved month-on-month, Becton Dickinson & Co business introduced new varieties of parenteral nutrition, focusing on potential performance growth space.
Main points of investment
Financial performance: revenue decline narrowed, Q3 profit growth rebounded month-on-month in 2020, the company released three quarters of 2020, operating income of 4.36 billion yuan from January to September 2020, down 22.44% from the same period last year, and net profit of 340 million yuan, down 14.07% from the same period last year. Q3 achieved operating income of 1.68 billion yuan in a single quarter, down 1.03% from the same period last year, and net profit of 130 million yuan, up 20.89% from the same period last year. Q3 performance improved significantly compared with the previous month.
Revenue side: under the normalization of diagnosis and treatment, hospital-end sales continue to improve. We believe that under the normalization of epidemic prevention, the number of outpatients and operations at all levels of medical terminals have gradually recovered. The company's sales in digestion, respiration, antibiotics and other areas are expected to gradually return to the normal level. According to Wind data, the company recorded more than 300 winning bids in the third quarter, close to the overall winning level in the first half of the year, and the revenue side was better than the previous quarter.
Becton Dickinson & Co project: new varieties of parenteral nutrition are expected to contribute incremental profits. In October 2020, the company signed an agreement with South Korea's JW Company to introduce Winuf, a three-chamber bag of total parenteral nutrition containing fish oil, which has no similar products on the market in China, so as to gain exclusive development and commercial rights in China. We believe that Becton Dickinson & Co project expansion will contribute to the smooth transition of the company's cash flow, from a variety point of view, the company's focus on digestive products is expected to improve sales efficiency and contribute to incremental profits.
Profit forecast and valuation
We expect the company's EPS to be 0.45,0.52 and 0.61 yuan per share respectively from 2020 to 2022, and the closing price on October 28, 2020 corresponds to 29 times PE in 2020. We believe that Luoxin Pharmaceutical, as a comprehensive generic drug company with leading digestive tract medication, leading respiratory field and collaborative imitation and innovation, is expected to contribute to the performance of LXI-15028 from 2022, partly hedging the possible performance impact of collection and acquisition; in the past 3 years, the company has carried out diversified cooperation in products, production capacity and channels, the fundamentals have improved, and the sustainability and development space of performance growth is expected to exceed expectations and maintain the "overweight" rating.
Risk hint
The risk of collection standard; the risk of excessive decline in collection prices of major varieties; the risk of R & D / clinical failure of major innovative drugs; the risk of plant construction and customer audit speed being lower than expected.
