Investment logic: 1) domestic leading enterprises of iodine contrast agent raw materials, co-casting the industrial chain layout of "intermediate-API-preparation": the acquisition of Poseidon Pharmaceuticals in 2018 is like a tiger, IMAX Ireland helps to speed up the internationalization process, and Shanghai Sili preparation business has made a breakthrough. 2) the quality of the company's API products is first-class and the production capacity continues to expand: the quality of the company's API products is excellent and has obtained several national certifications. at present, the total production capacity of iodine contrast agent API is 2650 tons / year, and the production capacity under construction is 605t / year. 3) the fifth round of collection won the bid, Shanghai Si Tai Li preparation business achieved a breakthrough: the company's two varieties, three specifications selected the fifth round of collection, and began to implement in October 2021, it is estimated that it will bring nearly 400 million sales.
Domestic iodine contrast agent raw material drug leading enterprises, co-casting "intermediate-API-preparation" industry chain layout: 1) acquisition of Poseidon Pharmaceuticals, a leading API company, as if to add wings: the company acquired Poseidon Pharmaceuticals in 2018, completed the integration of resources, IMAX Ireland brought overseas preparation products and customer resources, achieved industry leading enterprises, and helped the process of internationalization. 2) the growth rate of the company's profit end is higher than that of the revenue side, and the operating efficiency continues to improve: the CAGR of the company's profit from 2018 to 2021 is 51.2%, which is 31% higher than the income growth rate of the same period.
The company's first-class raw material drug quality, continuous expansion of production capacity, iodine contrast agent business gross profit declined in 2021: 1) the company's excellent product quality, certified by a number of developed countries: the company has a number of products certified in developed countries: EU CEP certificate, Indian registration approval, Japanese registration certificate, among which the company is the only manufacturer of iohexol raw material drugs certified by the European Union and Japan. 2) the production capacity continues to expand to meet the rising market demand: at present, the total production capacity of iodine contrast agent raw materials is 2650 tons / year, and the production capacity under construction is 605tons / year. 3) the gross profit margin of the iodine contrast agent business has been stable at more than 40% in recent years and decreased in 2021: from 2015 to 2020, the gross profit margin of the company's contrast agent business was more than 40%, and the gross profit margin in 2021 was 38.9%, down 6.6% from the same period last year. We speculate that part of the reason is due to the fluctuation of iodine prices last year.
Two varieties and three specifications won the fifth round of collection, Shanghai Si Tai Li preparation business has made a breakthrough: 1) at present, the company has 8 drug registration documents: among them, in 2020, the products such as iohexol injection, iohexol injection and iodoxanol injection first passed the national new category 4 registration (regarded as passing the Drug consistency Evaluation) 2) the fifth round of bid collection to complete the industrial transformation and upgrading of preparation business expansion: in 2021, Shanghai Sili Iohexol injection two standards and Iodosanol injection won the fifth batch of bid collection, and it will be implemented nationwide in October 2021. 3) the winning variety is expected to bring nearly 400 million sales to the company: according to the company announcement, the winning quantity and the winning price, the sales of the two varieties are about 190 million yuan, and according to the actual supply collected in the past, the actual supply is more than twice the amount. We estimate that the winning variety will bring nearly 400 million in sales to the company, which is expected to help Shanghai Si Taili turn losses into profits.
Profit forecast: we expect the company's revenue from 2022 to 2023 to be 2.723.58 billion yuan and the net profit to return to its mother to be 4.960 million yuan respectively. As a leading domestic iodine contrast agent raw material medicine enterprise, with the business model of "API + preparation" two-wheel drive, the company's performance growth is eye-catching, while the company has laid out CMO business, which is expected to contribute outstanding performance in the future to ensure the company's long-term sustainable development. Cover for the first time, giving a "buy" rating.
Risk tips: preparation sales risk, R & D risk, raw material price rise risk