Main points of investment
Items:
The company released a report for the first quarter of 2020, with revenue of 126 million yuan, down 27.08% from the same period last year; net profit of 26.78 million yuan, down 33.97% from the same period last year; and net profit of 27.82 million yuan, down 29.34% from the same period last year. The company's performance is in line with expectations.
Peace viewpoint:
2020Q1 is temporarily affected by COVID-19 's epidemic, and it is expected that Q2 will begin to recover gradually: 2020Q1's income is 126 million yuan (- 27.08%) and its mother's net profit is 26.78 million yuan (- 33.97%). The company's performance is in line with previous expectations. The decline in growth rate is mainly affected by the epidemic situation of COVID-19. On the one hand, various localities actively respond to the epidemic, which has a significant impact on normal diagnosis and treatment; on the other hand, due to the need for isolation, logistics and transportation is also subject to a certain degree of control. Since March, as the domestic epidemic has stabilized, the demand for medical treatment has gradually recovered, and the company's performance is expected to return to normal at the beginning of Q2. The management expense rate of 2020Q1 increased significantly, to 11.75% from 6.29% in the same period last year, mainly due to the provision of equity incentive fees.
Holding Haichang Pharmaceutical, API + preparation integration has taken a substantial step: on December 9, 2019, the company announced the transfer of part of the shares of Haichang Pharmaceutical Co., Ltd. at present, the industrial and commercial registration has been completed, and the company now holds 37.91% of Haichang Pharmaceutical Co., Ltd. to become the controlling shareholder. Haichang Pharmaceutical is one of the company's main API suppliers, this actual holding will accelerate the company's API + preparation integration strategy, ensure API supply, in order to better meet the future volume procurement challenges. According to the EIA data, Haichang Pharmaceutical is currently building 850 tons of iodine contrast agent production capacity project, the first phase of the project includes iohexol (250 tons), iodoxalol (100 tons), iodopropylamine (150 tons); the second phase of the project includes iodiferol (150 tons), iodopamol (150 tons) and ioparol (50 tons). The first phase of the project is expected to be put into production by the end of 2020.
Profit forecast and investment rating: the performance evaluation requirements of the restricted stock incentive plan in 2019 are that the income growth rate will not be less than 30%, 63% and 92% respectively from 2019 to 2021 and the income growth rate will not be less than 21% in 2018. provide a margin of safety. We maintain the company's profit forecast and estimate that the company's EPS from 2020 to 2022 will be 0.43 yuan, 0.52 yuan and 0.63 yuan respectively, and the current share price will be 21 times PE in 2020.
Risk tips: 1) the volume of products is lower than expected: at present, the company's main source of income is contrast agents, of which iohexol and gadolinium meglumine are relatively high, these two varieties are mature varieties, the growth rate is relatively slow. At present, the main increment of contrast medium comes from iodoxalol and iopamol. Once the release of iodoxalol and iodoparafenol is less than expected or the growth rate of the old varieties decreases, it will have a great impact on the company's performance; 2) the production capacity of Haichang Pharmaceutical is not as expected: at present, Haichang Pharmaceutical is building a project of 850 tons of contrast agent raw material drug production capacity, which is divided into three phases. After the completion of production capacity construction, it is also necessary to pass the certification of the target sales market, which is not as likely as expected. 3) the impact of COVID-19 epidemic situation: at present, the domestic COVID-19 epidemic situation has been basically controlled, if the subsequent epidemic situation occurs repeatedly, it will have a negative impact on the company's performance.
