Hongri Pharmaceutical issued an announcement: the company realized operating income of 6.65 billion yuan, down 13.30% from the same period last year; realized operating profit of 713 million yuan, down 18.59% from the same period last year; and net profit belonging to shareholders of listed companies was 624 million yuan, down 9.19% from the same period last year.
Main points of investment
The formula granule business is in the standard switching stage, and the performance is under short-term pressure. The company's revenue in 2022 was 6.65 billion yuan, down 13.3% compared with the same period last year. In 2022, the contribution of traditional Chinese medicine formula granules and prepared slices was 3.36 billion yuan, down 20.66% from the same period last year. The business of traditional Chinese medicine formula granules and prepared slices contributed more than half of the company's revenue, and performance fluctuations had a greater impact on the company's revenue. Since the end of the pilot project on November 1, 2021, enterprise standards have gradually switched to national and provincial standards, and 2022 is in the national standard switching stage, due to factors such as hospital channel inventory, incomplete number of varieties, provincial standard filing and other factors, the company's formula granule business has declined. In the fourth quarter of 2022, the company achieved revenue of 1.75 billion yuan, down 19.88% from the same period last year, with a significant increase over the previous three quarters; the net profit of returning to the mother was 154 million yuan, an increase of 208% over the same period last year. Mainly affected by the epidemic situation of COVID-19, the sales of medical devices and traditional Chinese medicine injections have increased. At the same time, the formula granule channel inventory has been basically digested, with the increase in the number of varieties on record, sales are gradually repaired.
The standard of formula granules continues to expand, and the performance is about to be repaired.
On March 14, 2023, 24 new standards for traditional Chinese medicine formula granules were announced. As of March 30, there are 248 varieties in the national standard and 43 varieties in the publicity period. with the provincial standards for the record, the number of varieties sold by formula granules continues to increase. The use terminal of formula granules has been expanded from secondary and above traditional Chinese medicine hospitals to all levels of medical institutions qualified for traditional Chinese medicine. With the release of the impact of the epidemic, the number of outpatients has steadily recovered, and the prescription quantity of formula granules will be further increased.
Various product lines and the layout of the whole industry chain
Raw materials business, the company through independent innovation and industry-university-research cooperation research and development model, to build a research, production and marketing integration team, 2022 CDE filing, DMF and other domestic and foreign applications are fully promoted according to the plan. In terms of medical devices, in 2022, the company completed 10 product certifications (including 4 domestic and 6 overseas), realized 8 new products on the market and 1 trial production, the new product-driven medical device business continued to grow, and the listed products focused on improving the efficiency of the supply chain, promoting technology cost reduction, and further improving the profitability of listed products. Medical and health service business, through digital operation means, quickly create offline channels and online flow scale, and deeply create a closed-loop ecology of "self-owned medicinal material supply chain + self-wired online platform + own offline medical center". Improve the accessibility of high-quality traditional Chinese medicine resources. With the in-depth development of various fields, the company has made rapid progress from an excellent domestic traditional Chinese medicine manufacturer to a large health industry service provider.
Profit forecast
We forecast that the annual 2023E-2025E income of the company is 75.97,89.82,10.628 billion yuan respectively, the net profit is 6.54,8.35,1.113 billion yuan respectively, and the EPS is 0.22,0.28,0.37 yuan respectively. The current stock price corresponding to PE is 26.6,20.9,15.7 times, downgraded to "overweight" investment rating.
Risk hint
Market development speed is not as fast as expected, raw material cost change, collection or bid price change and other risks.