Event: the company released the three-quarter report of 2018, with revenue of 905 million yuan (+ 26.67%), net profit of 294 million yuan (+ 25.27%), and net profit of 274 million yuan (+ 21.15%) in the first three quarters of 2018.
Main points of investment
1. The performance fell to the median of the forecast, and the accounts receivable decreased.
The results of the three quarterly reports in 2018 fell within the median forecast. The revenue in the third quarter was 258 million yuan, an increase of 9.63% over the same period last year. The net profit returned to the mother was 84 million yuan, an increase of 13.03% over the same period last year. The company controlled the scale of receivables. Bills and accounts receivable in the first three quarters were 1.104 billion yuan, down 135 million yuan from the first half of the year, thus affecting the growth of revenue in the third quarter.
The company's gross profit margin was 86.13%, an increase of 4.93pp over last year, mainly due to the rapid growth of API export business with high gross margin; in terms of expenses during the period, sales expenses increased by 86.45% compared with the same period last year, and the sales expense rate increased by 12.61pp to 39.33%, mainly due to increased marketing promotion; the management expense rate was 13.21%, which decreased 2.28pp compared with the same period last year. The interest income of the current period increased, the financial expense rate decreased by 1.61pp to-0.34% compared with the same period last year, and the three expense rate increased by 52.2%, with an overall increase of 8.72pp.
two。 The domestic preparation growth is steady, and the export business maintains high growth.
From the perspective of sub-business: 1) the company strengthens academic promotion and bidding, expands the scope of product application, and optimizes the product layout. The income of domestic preparation products is 464 million yuan, an increase of 50.88% over the same period last year. 2) the patent for blockbuster polypeptide drugs expires, the company cooperates with a number of generic drug enterprises, the orders for raw materials are sufficient, and exports achieve high growth. The income from raw materials and customer peptides is 272 million yuan, an increase of 70.28% over the same period last year. 3) the income of equipment products of Chengji Pharmaceutical Co., Ltd. was 98.7442 million yuan, down 42.86% from the same period last year, and the income of drug combination packaging products was 63.8803 million yuan, down 7.95% from the same period last year.
3. The structure of the preparation is continuously optimized, and the raw material of Lilaru peptide will be produced in large quantities soon.
The company's preparations benefit from the adjustment of medical insurance, strengthen academic promotion, actively expand the market, and are expected to maintain stable growth in the future; there are many varieties in the field of diabetes and reproduction. Sitrac is included in the national priority review and is expected to be approved soon, the preparation structure is continuously optimized, and the consistent evaluation of the layout in advance will seize the market by virtue of technical and quality advantages.
The company plans to start the on-site inspection of the European Union and FDA of the Pingshan preparation plant, and steadily advance the declaration of ANDA in the United States of Etiaptide and Greytiere; the company acquires AMW from Germany through the fund, relies on its slow and controlled release technology platform, increases the drug delivery mode of listed preparation products, prolongs the drug life cycle, and improves market competitiveness.
The core patent of the blockbuster diabetes drug Lilaluptide injection expires, the company has established stable cooperation with overseas customers, Wuhan Raw Drug Factory has entered the trial operation stage, and the generic drugs are expected to be commercialized and sold on a large scale after listing; domestic Lilaluptide has been included in the national health insurance, the market is rapidly growing period, the company has obtained clinical approval according to chemical drugs, which will bring performance increment after listing.
Investment suggestion: the company increases the marketing reform, benefits from the adjustment of the health insurance catalogue, and the domestic preparation is expected to maintain stable growth; around the fields of diabetes and reproduction, the company focuses on the research and development of rich product lines, steadily advances the application of etiaptide and ANDA, and at the same time acquires the German company AMW to introduce a sustained and controlled release technology platform to promote the preparation internationalization process. The Wuhan workshop of the company has entered the stage of trial operation, the mass production of raw materials is imminent, and large-scale sales can be expected. Lilaluptide injection has obtained clinical approval according to chemical drugs, which will bring incremental performance after listing. We expect the company to maintain a "highly recommended" rating of EPS0.49, 0.73 and 0.98 yuan from 2018 to 2020, corresponding to PE of 21X, 14x and 11x, respectively.
Risk hints: research and development risk; drug price reduction risk; API export is not up to expectations.
