The prosperity of the urea industry has rebounded, and the company's urea business is expected to stabilize and improve.
In recent years, the urea industry has been in a state of serious overcapacity and prices continue to decline. The company has taken positive and effective measures, urea business can still maintain a certain profitability. Since the beginning of this year, the supply-side reform has been intensified, the new production capacity of the industry has been curbed, and the prices of raw materials and freight have all risen, which has supported the recent rebound in urea prices, which has risen by nearly 30% since August. The prosperity of the industry has gradually rebounded, and the company's urea business is expected to stabilize and improve.
Metformin is a new generation of multi-indication longevity drug.
The company is one of the top ten leading enterprises producing metformin in China. Metformin has been widely recognized by the medical community for its excellent hypoglycemic effect and relative safety, and has become one of the most commonly used oral hypoglycemic drugs. the latest research shows that metformin has pharmacological effects in cardiovascular and tumor treatment, and has a wide range of indications. its excellent cross-departmental ability, known as the new generation of "longevity medicine". The dosage form of company metformin enteric-coated tablets can avoid stomach irritation and greatly improve its safety, so it will gradually replace ordinary metformin tablets. Q with DPP-4 inhibitors as the core to build a series of diabetes drug platform research and development, the generic drug DPP-4 inhibitor being developed by the company is one of the three new star varieties in the field of diabetes treatment. At present, the sales of several major varieties of original research drugs have almost exploded in China, with a compound growth rate of 50% and 1000% in 4 years. In addition, the company's main R & D reserve mainly has 10 drugs for the treatment of type 2 diabetes, with the successful precedent of metformin, the company is expected to build a full range of type 2 diabetes drug platform.
Establishing Diabetes and Cancer Hospital and perfecting the layout of Industrial chain
The company plans to use the fixed increase funds to establish Guiyang Guanshan Lake Cancer Hospital and Guiyang Sheng Jitang Diabetes Hospital. The two specialized hospitals will increase the terminal market coverage of Sheng Jitang and become the terminal support of the company's pharmaceutical and pharmaceutical circulation business. for the company's pharmaceutical and pharmaceutical circulation business to provide a stable source of business, at the same time will greatly enhance the company's pharmaceutical circulation business and upstream pharmaceutical companies' bargaining power. And will also provide you with more efficient clinical resources for the company's new drug research and development, and become an important part of the company's core competitiveness for sustainable development.
Profit forecast and valuation
The company's original chemical business will gradually stabilize and improve due to the rebound of the industry boom, and the acquisition of Sheng Jitang will begin to enter the pharmaceutical industry. the existing core varieties of diabetes drugs market has a huge market space, which will become a new profit growth point of the company in the future. We expect the operating income from 2016 to 2018 to be 3.011 billion, 3.552 billion and 4.256 billion respectively, and the return net profit to be 150 million, 227 million and 285 million respectively, an increase of 638.73%, 51.62% and 25.65% over the same period last year, and the corresponding EPS is 0.09,0.13,0.16 yuan respectively, and the current PE is 80 times, 53 times and 42 times respectively. Give a rating of "overweight".