Incidents:
Today, Osecon issued an announcement stating:
(1) The company expects the net profit range for Q1 2021 to be 176 million to 183 million yuan, an increase of 65.76%-72.09% over the previous year.
(2) The company recently received the “Drug Clinical Trial Approval Notice” for maltol iron capsules issued by the China Drug Administration. The maltol iron capsules declared by the subsidiary have been approved for clinical trials.
Key points of investment:
The Q1 performance was excellent, basically reaching the same period in 2019, and the business situation recovered well year over year. The company expects the net profit range for Q1 2021 to be 176-183 million yuan, with a median value of 180 million yuan, which basically reached the same period in 2019 (2019 Q1 net profit was 188 million yuan), indicating that the company's Q1 business situation has recovered well. When prices have been reduced for some products, the company has strongly guaranteed profit stability through category expansion and cost structure adjustments, laying the foundation for this year's main business performance to bottomed out and smooth transformation and innovation.
Maltol iron capsules have been successfully approved clinically and are expected to quickly become the company's first innovative drug to be marketed through bridging experiments. Iron maltol capsules were developed by Shield TX in the UK for the treatment of iron deficiency in adults. They were approved and marketed by the EMA and FDA in 2016 and 2019. Iron maltol is a novel non-salt complex formed of iron and maltol. It has a unique absorption mechanism and is effective for patients who are intolerant to existing oral iron preparations or have poor treatment results. Furthermore, it has good adaptability and compliance, and can replace intravenous iron therapy. Iron maltol capsules were introduced by the company in early 2020 and obtained their exclusive benefits in China. After completing the bridging test, they can be listed. We expect them to be listed by the end of the year. Currently, China's iron preparations market has exceeded 3 billion yuan. The potential patient base and market size are large. Maltol iron capsules have unique advantages, and the market performance is expected to be impressive after listing.
PPI leaders continue to expand multiple product lines and enter a period of accelerated growth. As a leading PPI inhibitor, the company continues to consolidate its PPI product line. Injectable dexabeprazole sodium (first in China) and injectable levapantoprazole sodium (second in China) are expected to be approved for listing this year. Injectable dexlansoprazole sodium has been notified of acceptance. Furthermore, the company is gradually expanding treatment fields such as digestion, infections, tumors, chronic diseases, etc., and injectable temozolomide has recently been approved. Posaconazole enteric tablets are expected to be approved in the near future, and injectable posaconazole sodium and polymyxin E for injection are also expected to be approved in the first half of the year Listed, anti-tumor cabotinib has been accepted. Additionally, Pemex, which has been on the market for the past two years Trexdisodium (tumors), saglitatin tablets (diabetes), injectable tigacycline (anti-infection), and injectable parecicib sodium (anesthetic analgesia) have already begun to contribute to sales. We expect the company's revenue share for new product lines such as infections, tumors, and chronic diseases to rise to around 30% in 2020;
Combining innovation at the beginning and end, improving the research system drives us into a full harvest period of transformation and upgrading. In recent years, the company's research institutes have, on the one hand, improved the leading innovation system, and on the other hand, strengthened the integration of API formulations and the consistent evaluation of generic drug quality. Osecon's innovative drug pipeline continues to be expanded. The company's introduction of the third-generation EGFR-TKI drug, ASK120067, is in clinical IIb stage. It is expected to be marketed in the first half of next year. It is expected to be marketed in the first half of next year. In addition, phase 1 clinical trials of Claudin 18.2's anti-tumor drug ASKB589 are being developed in an orderly manner; in terms of external cooperation, the company's introduction of the next-generation oral ferroferric drug, the maltol capsule for the treatment of iron deficiency in adults, has been approved for IND, and subsequent clinical bridging has been completed. The experiment can then be declared for listing. In the future, we expect an average of 3-4 innovative drugs to enter clinical trials every year. This year will be the first year in which the results of the innovative drug pipeline of the company's research institutes are realized.
Profit forecast and investment rating: In the short term, as a leading domestic proton pump inhibitor company, the company's new product line expands into a release period, and revenue and profit growth are expected to enter a period of continuous improvement. In the medium to long term, we are firmly optimistic about the comprehensive innovation and upgrading driven by the company's perfect research system. This year is expected to be the first year of high growth in the company's performance and fulfillment of innovative drug results. Therefore, we expect the company's EPS in 2020-2022 to be 0.78, 0.86, 1.00 yuan respectively. The corresponding stock price PE is 18.60, 16.89, 14.52 times, maintained, respectively. Buy ratings.
Risk warning: Innovative drugs fell short of expectations, collection pressure was greater than expected, other risks.
