Half-year performance has declined, the company carried out buybacks, management increased holdings to show confidence in performance growth the company issued a semi-annual report in 2021, achieving operating income of 775 million yuan (- 4.97%), return to the mother net profit of 152 million yuan (- 30.51%), deducted non-return mother net profit of 136 million yuan (- 34.13%). Due to the rising price of raw materials and the decline in demand for common antibiotics caused by the epidemic, we downgrade the profit forecast for 2021-2022 and add the profit forecast for 2023. it is estimated that the net profit of the company from 2021 to 2023 is 341,398 (- 1.81) billion yuan and 489 million yuan, respectively, and the EPS is 0.62 (- 0.42) yuan, 0.72 (- 0.53) yuan and 0.89 yuan, respectively. The current share price corresponds to PE 19.6x / 16.8x / 13.7x. However, considering that: (1) the company's Peinan series of production capacity is about to be gradually released, (2) the company has recently announced that it will carry out buybacks and management holdings, indicating confidence in future performance growth and maintaining the "buy" rating.
The company's performance in 2021 is expected to improve quarter by quarter.
From a quarterly point of view, the company's profit in the second quarter of 2021 was 78.06 million yuan, down 42.37% from the same period last year, mainly due to a high performance base in the same period in 2020, but still increased from a month-on-month basis, indicating that the company's performance is in marginal improvement. The company's gross profit margin has been in a downward trend in recent quarters due to the rising prices of raw materials such as 6-APA and the decline in the price of sulbactam. We believe that the price of 6-APA is already high, and there is little probability that the cost pressure will continue to rise in the future. The improvement of the marginal demand of sulbactam will also lead to a rebound in prices, the prices of Peinan series products will remain high, and sales volume will grow steadily. Due to the low performance base due to rising costs and declining demand for antibiotics caused by the epidemic in the third and fourth quarters of 2020, we believe that the company's performance is expected to improve quarter by quarter in 2021.
New production capacity is gradually falling to the ground, paying attention to potential performance growth points.
At present, the company's 600t 4-AA and 200t meropenem projects are under construction. After the completion of the project, the company will become the leader in the field of 4-AA and realize the layout of the whole industry chain from starting raw materials to downstream raw materials in the field of carbapenem. As 4-AA prices are currently high and demand continues to grow, we believe that the project is expected to contribute significant performance increments when completed. Weifang Altong, a subsidiary, has an annual output of 616 tons of Nawei intermediate project (mainly including ketone, chlorohydrin and 2R epoxide) has been completed, and completed the acceptance work, has now entered the stage of trial production, antiviral drugs / intermediates are expected to become a new growth point.
Risk hint: the increase in raw material costs leads to a decline in gross profit margin, and the performance is lower than expected after the release of new production capacity.