Event: the company released its semi-annual report for 2022, with an income of 2.48 billion yuan, a year-on-year + 52.1%, a net profit of 240 million yuan, a year-on-year net profit of-13.4%, and a non-return net profit of 220 million yuan, a year-on-year + 27.6%. Among them, the income in the second quarter was 1.48 billion yuan, + 63.4% compared with the same period last year, and the net profit was 80 million yuan,-32.9%, and 90 million yuan, + 54%, respectively.
The revenue of medicine trading business has increased significantly. From a sub-sector perspective, the company's pharmaceutical industry sector achieved 910 million yuan in revenue in the first half of the year, up 14% from the same period last year; the pharmaceutical commercial sector achieved 160 million yuan, down 10.9% from the same period last year; and the medicinal material commercial sector achieved 1.4 billion yuan, an increase of 116.7% over the same period last year. From the perspective of profitability, the company's sales gross profit margin in the first half of the year was 31.6%, year-on-year-18.9pp. the net sales margin was 9.8%, year-on-year-7.2pp. The decline in profit margin was mainly due to the rapid growth of revenue from the low-margin medicine distribution business. The overall expense rate of the company has been reduced. During the period of 22H1 sales, the expense rate was 20%, which decreased 17.2pp compared with the same period last year, of which the sales expense rate was 10.1%, the year-on-year decrease of 11.8pp, the management expense rate of 6.3%, the year-on-year decrease of 3.4pp, the R & D expense rate of 2.6%, and the year-on-year decline of 1.6pp. The sharp decline in expense rate is mainly due to the rapid growth of income and diluted expenses.
Build Bozhou trading center to realize the integration of upstream and downstream of traditional Chinese medicine. The company's traditional Chinese medicine trade business is mainly based on Harbin Trading Center and Bozhou Trading Center, establishing contacts with 36 producing counties and town governments, and displaying the source of goods in "Shennong Cang" in Bozhou. Through "Shennong Cang" on-site sales and off-site sales to broaden sales channels. At the same time, combined with traditional Chinese medicine trading e-commerce platform, connect downstream medicine dealers and traditional Chinese medicine purchasing enterprises.
Steadily advance the research and development of drugs under research. The company has 3 in-hospital preparation registration projects are carrying out stability research; 4 traditional Chinese medicine secondary development projects are under research; Xiaoer Resuqing syrup is carrying out clinical research on listed varieties; the classic famous prescription project-Qiang Huo Shengshi Tang granule is under research and development. The chemical imitation pharmaceutical project has landed in an orderly manner, and the registration application of 6 projects has been completed, among which the FDA declaration of Tofatibu citrate tablets has been completed. In terms of chemical drug innovation, the anti-tumor class 1 new drug HZB1006 has carried out the phase Ⅰ clinical trial; the anti-influenza class 1 innovative drug ZBD1042 project has completed the phase I clinical trial in the United States, the project has completed the domestic phase I clinical bridging trial, and is now ready to start the phase Ⅱ clinical trial; the anti-tumor class 1 innovative drug HZB0071 has completed the related pharmaceutical research and is ready to apply for IND.
Profit forecast and investment suggestions: the company's 2022-2024 net profit is expected to be 410 million yuan, 640 million yuan and 740 million yuan, with a corresponding valuation of 27 times, 17 times and 15 times respectively. The company's traditional Chinese medicine injection and oral preparations are expected to accelerate due to favorable policies, investment in Tris layout, innovation and internationalization of biological drugs, the future development is worth looking forward to.
Risk tips: policy risk; the risk of intensified competition in the industry; the risk that new product research and development does not meet expectations.
