Events:
The company released the 2020 annual report: the company achieved 1.493 billion yuan in revenue in 2020, an increase of 10.26% over the same period last year; the net profit returned to its mother was 319 million yuan, an increase of 4.4% over the same period last year, and decreased by 3.05% after deducting non-profit.
The company released its financial results for the first quarter of 2021: Q1 achieved 395 million yuan in revenue in 2021, an increase of 7.6% over the same period last year; the net profit returned to its mother was 74 million yuan, down 11.34% from the same period last year and 20.19% after deduction.
Main points of investment:
The decline in profits of 2020Q4 and 2021Q1 is mainly due to lower product prices and higher raw material prices. In 2020, the revenue of Q4 company was 384 million yuan, which was basically the same as that of the same period last year; the profit was 24.92 million, down 71.5% from the same period last year. The sharp decline in profits is mainly due to the decline in product prices and the rise in raw material prices. The price of the core product sulbactanic acid dropped from 700 yuan / kg in May 2020 to 500 yuan / kg, in January this year, while the price of 6-APA, the main raw material, was raised from 145yuan / kg at the beginning of the 20th to 230yuan / kg, at present, and the prices of other raw materials also increased to varying degrees, resulting in profits in Q4 last year and Q1 this year under pressure.
The price of sulbactam has warmed up and rebounded, and the price of Pei Nan's exuberant demand has risen to a new high, and the company has gradually stepped out of the trough of phased operation. In March this year, sulbactam began to recover, the price bottom rebounded to 550yuan / kg, performance market began to pick up gradually under the weakening impact of the epidemic, in addition, the performance of the Pernan market is good, meropenem main ring MAP price rose from 2800 yuan / kg at the beginning of the year to 3200 yuan / kg, crude export price of meropenem also rose from 800USD / kg to 1000 USD / kg, so the company gradually came out of the phased operating trough and continued to be optimistic about the company's development for a long time.
The new capacity in turn lays the foundation for the company's long-term growth, and cooperates with CDMO to add new growth momentum.
In recent years, the company has made full use of bond issuance and fixed increase through the capital market to raise funds to continue to invest in new projects. Piperacillin tazobactam 8:1 powder mixing project has begun trial production; efficient Penem antibiotic project is carrying out civil construction and is expected to be put into production in the second half of this year; subsidiary Nawei intermediates have been put into production, and the company's new capacity and new projects will be realized in turn, effectively supporting high performance growth in the future.
The company carries out in-depth cooperation with CDMO to add a new driving force for growth. The company and Lingkai Pharmaceutical jointly funded the establishment of Lingfu Pharmaceutical Research Institute with a shareholding of 49%. At present, there are 7 products under research, including docabamide, whose indications include pemphigus, idiopathic thrombocytopenic purpura, ascites, imaging diagnosis of Alzheimer's disease, chronic kidney disease and coronary artery disease. This cooperation not only helps the company successfully cut into the CDMO market. And it is beneficial for the company to practice the development strategy of "pharmaceutical intermediate-API-preparation integration".
Profit forecast and investment rating: affected by COVID-19 's epidemic situation, we downgrade our profit forecast. It is estimated that the EPS in 2021-2023 will be 0.81,1.02 and 1.23 yuan, respectively, and the corresponding PE will be 16.25,12.90 and 10.70 times, respectively. However, we believe that with the gradual elimination of the impact of the epidemic, the company's core products are expected to resume rapid growth, and new capacity and new projects will continue to be put into production, laying the foundation for rapid growth in the future. And the deep cooperation with CDMO adds new impetus to the company's growth, still maintaining its "buy" rating.
Risk hint: core product price reduction risk, industry competition aggravating risk, CDMO business lower than expected risk, other systemic risks.