Event
On August 24, 2022, the company released a semi-annual report that revenue in the first half of 2022 was about 15.61 billion yuan, an increase of 12.9 percent over the same period last year, while the adjusted basic profit attributable to shareholders was 3.069 billion yuan, an increase of 14.9 percent over the same period last year. The performance is in line with expectations.
Comment
In the first half of the year, proprietary medicine business grew across the board, the performance of core products was sound, and the degree of recognition increased. (1) the revenue growth of the company in the first half of 22 years mainly came from proprietary medicine, raw material products, functional food and other businesses, with revenues of 122.92 (+ 9.4%), 23.52 (+ 22.7%) and 9.65 (+ 43.5%) million yuan, respectively. Due to the impact of the epidemic, the revenue of the proprietary medicine business in the second quarter of 22 was about 5.991 billion yuan, down 5% from the previous quarter, of which the revenue from the anti-tumor field was about 1.898 billion yuan, down 12% from the previous month. Keli (paclitaxel albumin binding for injection) reduced the price greatly in the contract renewal of the 13 provincial alliance set led by Henan. However, revenue in the field of nervous system and anti-infection increased rapidly in the first half of 22 years, reaching 38.74 (+ 7.3%) and 17.53 (+ 23.9) billion yuan, respectively. (2) the revenue growth of the raw materials business benefited from the increase in production capacity, the simultaneous increase in the production and sales of vitamin C products, and the increase in revenue in functional foods and other businesses benefited from the increase in sales and prices of caffeine products. (3) according to the notice The core product Enbipu (butylphthalide) continues to promote the market sinking at the county level and township areas, and the market share of Domex (doxorubicin hydrochloride liposomes) in similar products has exceeded 75%. Dornda (mitoxantrone hydrochloride liposomes) has successfully developed more than 200 hospitals since it was put on the market in February. Avalic (amphotericin B cholesterol sulfate complex for injection) covered more than 420 hospitals after it was included in the health insurance catalogue in December 2021.
Research and development expenses continue to be invested, and the pipeline reserve is adequate. (1) the cost of H1 R & D in 22 years was about 1.884 billion yuan, an increase of 16.8% over the same period last year. At present, there are about 300 projects under research, of which there are more than 40, 40 and 30 innovative drugs and new preparations of small molecules and macromolecules. (2) Recombinant all-human anti-RANKL monoclonal antibodies for giant cell tumor of bone, irinotecan liposome injection for pancreatic cancer, norlafaxine succinate sustained-release tablets for depression and rezetinib mesylate capsules for non-small cell lung cancer have been submitted for marketing. In addition, Mingfule, which treats hyperacute ischemic stroke, is preparing to submit an application for listing.
(3) the candidate COVID-19 mRNA vaccine is undergoing 6 clinical trials, and the results show that it meets the expectations of safety and immunogenicity. MRNA vaccine platform has been verified, and rabies, herpes zoster and other vaccines have been distributed.
Profit forecast and investment suggestion
We maintain the profit forecast and expect the company to achieve 321 billion yuan in revenue in 2022-23-24 and 370 million yuan in net profit in 61-69-80. The company's current share price is trading at 13-13-11 times the PE for 2022-23-24, maintaining a "buy" rating.
Risk hint
The risk that new drug research and development and new product sales fall short of expectations and collection policies affect profitability.