Enjingfu maintained a high growth rate, and the reported performance was in line with expectations: 551 million yuan in operating income and 152 million yuan in net profit in the first half of the year. Excluding the impact of the reverse merger in September 2015, revenue increased by 7.18% year-on-year, and net profit from home increased by 10.30% year-on-year. Among them, the business income of Shandong Weiming Intermediate was basically the same as the same period last year, and the gross profit margin increased by about 4.8%. In the case of a high base, the income and gross profit margin increased by 18.27% and 1.33%, respectively, in line with previous expectations.
The rapid increase of EV71 has accelerated the recovery of the vaccine industry: the participating company Beijing Hexing's main business is Class II vaccine. Affected by the vaccine incident in Shandong in March, the performance dropped sharply in the first half of the year, with a loss of 34.03 million yuan. At present, with the completion of industry rectification and the establishment of a new order, favorable policies continue to be introduced, the industry shows a trend of accelerating recovery, and the performance inflection point is expected to come in the fourth quarter. The production capacity of the new variety of EV71 vaccine was released rapidly. by the end of June, a total of 1.2218 million bottles were issued, valued at about 140 million yuan. considering the stock market for 50 million children, there is a high probability that all of them will be sold out throughout the year. In the past three years, the sales of this variety are expected to exceed 1 billion yuan.
It will take some time for Sinochem to return, and the results are expected to remain the same: the privatization process of Sinochem Holdings is progressing steadily. At present, the financial and legal advisers employed by the special committee of the board of directors of Kexing Holdings have made preliminary communication with the intermediaries employed by the buyer group. We maintain our previous judgment that the two groups of buyers will eventually move towards in-depth cooperation and promote the return of Sinopec will be a high probability event.
Investment advice: we expect income growth in 2016-18 to be 52.66%, 16.58% and 16.03% respectively. EPS is 0.64,0.77 and 0.96 yuan respectively, and relative to the current stock price PE is 42X, 35X and 28X respectively. Maintain the buy-An investment rating, with a target price of 34 yuan for the next 12 months.
Risk tips: EV71 vaccine sales are not as expected; Beijing Kexing traditional vaccine performance is uncertain; Sinovac Biotech privatization process is slower than expected; Enjingfu income growth is not as expected.