[investment points]
The performance maintained a steady growth trend. In the first three quarters of 2022, the company achieved operating income of 869 million yuan, + 16.63% compared with the same period last year; net profit of 105 million yuan, + 17.94%; and non-return net profit of 102 million yuan, + 17.91% of the same period last year. In the Q3 quarter alone, the company achieved revenue of 345 million yuan (year-on-year + 18.36%, month-on-month + 25.45%), net profit of 47 million yuan (year-on-year + 12.69%, month-on-month + 74.07%), and non-return net profit of 46 million yuan (year-on-year + 16.56%, month-on-month + 76.92%).
The key products are strong and echelon products are rich. At present, the company has 32 drug production approvals, including 10 national medical insurance varieties, 1 national base drug variety, 12 over-the-counter (OTC) varieties and 12 exclusive varieties. The products in production are mainly divided into gynaecology, urinary system, heat-clearing and detoxification, and other categories. Most of the existing leading products are domestic exclusive patent varieties, national medical insurance varieties, national base drug varieties; the second echelon is rich in varieties, mostly exclusive varieties and OTC varieties, which will be an important new force in the company's next large-scale sales.
To promote the development of OTC market with clinical advantages. The company continues to adhere to the "clinical efficacy" as the basic starting point, pull the OTC channel market, with a solid clinical market foundation and the "bonding strength" of the patient population. The company strives to achieve the leading brand in the subdivided field in the next 3-5 years, and then achieve the strategic goal of "large single product + strong brand" in the industry, and systematically create a pharmaceutical brand with "clinical value products + commercial logical value".
Attach importance to the future development and layout of traditional Chinese medicine industry. In accordance with the R & D requirements of "production generation, reserve generation, development generation", the company continues to carry out product R & D reserves of new traditional Chinese medicine, traditional Chinese medicine formula granules and classical prescriptions. According to the semi-annual report, the company has three new traditional Chinese medicine products, including Longcen pelvic Shu granule, Kuererjiejieyin Gel, and Shuyutong granule, and has completed clinical III trials, and is expected to apply for listing license one after another in 2023; it has 445 varieties of traditional Chinese medicine formula granules, completing the GB record 133, and the research and development of classic prescription products has also achieved initial results, covering gynaecology, paediatrics, respiratory and chronic diseases and other fields.
Overall financial soundness the rate of financial expenses has declined. In the first three quarters of 2022, the company's sales, management and financial expense rates were 49.26%, 11.40% and 0.53% respectively, which were + 0.02pct,-0.61pct and-1.01pct respectively compared with the same period last year. The R & D expense rate was 1.45% (year-0.12pct). The company's gross profit margin and net profit margin were 77.73% (- 1.65pct) and 12.07% (+ 0.14pct) respectively.
[investment advice]
The company is located in Guizhou Province, together with Yunnan, Sichuan and Guangxi as the four avenues medicine base in China. Guizhou is humid and rainy, which is a three-dimensional climate in the mountain area, which is very suitable for the growth of traditional Chinese medicine. Guizhou is rich in traditional Chinese medicine resources to provide the company with a reliable guarantee of the original medicine. The company's proprietary Chinese medicine products are mostly exclusive varieties, covering gynaecology, urology and other fields, reasonable product layout, strong competitiveness and rich echelon products.
The performance is basically in line with our expectations. We slightly reduced the growth rate of gynaecological income, and slightly reduced the company's 2022Universe 2023Universe operating income to 12181,524,907 million yuan in 2024, respectively, and its mother net profit to 1.21pm 1.58xpx 2.02 million, EPS 0.52 PE 0.87 yuan respectively, corresponding to PE as times as 33-25-20. Maintain the "overweight" rating.
[risk Tip]
Policy risk of pharmaceutical industry
Product research and development risk
Risk of accounts receivable
