Events:
The company publishes its annual report for 2020 and quarterly report for 2021. In 2020, the company achieved operating income of 1.493 billion yuan, an increase of 10.26% over the same period last year, while the net profit belonging to shareholders of listed companies was 319 million yuan, an increase of 4.4% over the same period last year. In the first quarter of 2021, the company achieved operating income of 395 million yuan, an increase of 7.60% over the same period last year. Net profit belonging to shareholders of listed companies was 74.31 million yuan, down 11.34% from the same period last year.
Event comments:
To overcome the impact of the epidemic, performance maintained a steady growth trend. Affected by the epidemic, the number of hospital visits decreased significantly, and drug terminal market sales showed a negative growth. In this context, the company scientific epidemic prevention, overcome personnel, logistics and other unfavorable factors, maintain a stable growth trend.
From a quarterly point of view, due to the initial stage of the epidemic, downstream preparations strengthened the stock of raw materials in the first half of the year, and the company's revenue in the second quarter reached a record high of 449 million yuan in a single quarter. In the third quarter, downstream preparation manufacturers began to remove inventory due to lower-than-expected demand. The company's revenue dropped 35% month-on-month and gradually recovered in the fourth quarter, but the net profit in the fourth quarter was the lowest in the year because the price of raw materials lagged behind sales. Judging from the results in the first quarter of 2021, the company's revenue is growing again.
The expansion of production capacity has advanced steadily, and the operation of subsidiaries has continued to improve. 1) in 2020, Fuxiang (Dalian) obtained the "Drug Registration document" of Agatroban injection approved and issued by the State Drug Administration, and has been officially put into production. The drug has been included in the 2019 edition of the national health insurance catalogue. According to Mine.com, Agatoban has maintained a rapid growth trend in recent years, with domestic sales of 370 million, 460 million and 540 million respectively in 2017, 2018 and 2019, with an annual growth rate of more than 17% in the past three years. 2) in 2020, the 900-ton Batan Intermediate Project of Aotong Pharmaceutical Co., Ltd. has been completed and trial production has begun. At that time, it will provide the starting materials for the production of Jiangxi Xiangtatazobactam project, and the trial production of antiviral drug intermediates of Altong Pharmaceutical Co., Ltd. has been a complete success. 3) in 2020, Jiangxi Xiangtai's first aseptic freeze-dried API production facility was completed, various equipment debugging and verification / confirmation were completed in 2020, and the first aseptic simulation verification of the production line was completed. Jiangxi Xiangtai 200 tons tazobactam project has been completed. 4) the construction work of the Fuxiang biomedical project is progressing smoothly. The production workshop and supporting warehouses of the first phase of the Fuxiang biomedical project are capped, with a total construction area of about 110,000 square meters.
At present, the process equipment has been entered one after another and is being installed, and the project is progressing smoothly.
And Lingkai Pharmaceutical strong combination, complementary advantages, layout of CDMO business. In 2020, the company and Lingkai Pharmaceutical jointly funded the establishment of Lingfu Pharmaceutical Research Institute (49% owned by the company).
Lingkai Pharmaceutical is a fast-growing pharmaceutical R & D and production service outsourcing manufacturer, committed to becoming a trusted CDMO supplier in the global pharmaceutical field. The strong combination of the company and Lingkai Pharmaceutical will give full play to Lingkai Pharmaceutical's R & D capabilities and the company's commercial capabilities, with complementary advantages, which will help the company to carry out CDMO business, enter the drug R & D service market faster, and will further enhance the company's overall competitiveness. CDMO business is expected to become the company's new profit contribution point. At present, Ling Fu Pharmaceutical Research Institute has 7 products under development, including docabamide, whose indications include pemphigus, idiopathic thrombocytopenic purpura, ascites, imaging diagnosis of Alzheimer's disease, chronic kidney disease and coronary artery disease. Lingfu Pharmaceutical Research Institute aims to achieve the development and production of more than 40 clinical phase I, 30 clinical II phase, 15 clinical III phase and 5 commercial phase projects within 2 years.
Investment advice:
We expect the company's net profit from 2021 to 2023 to be 3.64amp 3.93 / 441 million yuan respectively, the EPS is 0.66amp 0.71 pound 0.80 yuan respectively, and the current share price corresponding to Pamp E is 19-17-15 times. At present, the median Pamp E (TTM) of the chemical API industry is 35 times, the company's valuation has more room for repair, and considering the steady progress of the company's "pharmaceutical intermediates-API-preparation integration" development strategy, continuous extension and continuous investment along the antibiotic and antiviral industry chain, and Lingkai Pharmaceutical strong joint layout of CDMO business, development is expected, we maintain its "buy" investment rating.
Risk Tips:
The risk of price fluctuation of raw materials and intermediates; the release of production capacity of projects under construction is not as expected; the risk of environmental protection policy; the risk of exchange rate fluctuation.