Heilongjiang Zbd Pharmaceutical Co.Ltd(603567) (603567)
Event (1) the company released the third quarterly report of 2021, realizing a revenue of 2.705 billion yuan (+ 51.89%), a net profit attributable to the parent company of 242 million yuan (+ 0.66%), deducting a net profit not attributable to the parent company of 126 million yuan (+ 349.03%), and an EPS of 0.29 yuan per share; (2) a new 10ml specification of Shuxuening injection was approved; (3) The non-public offering was launched, with a total of 92.8036 million ordinary shares issued at an issue price of 13.34 yuan per share, raising a total of 1.238 billion yuan.
The income increased rapidly and the expenses were well controlled during the period. The company's revenue in the first three quarters of 2021 was 2.705 billion yuan, with a year-on-year increase of 51.89%. In the first three quarters, the single quarter revenue was RMB 727 million, RMB 903 million and RMB 1073 million respectively, with a year-on-year increase of 16.89%, 21.85% and 160.39% respectively. The Q3 revenue increased significantly. The gross profit margin of the company's sales in the first three quarters was 40.84% and 62.05% in the same period last year, mainly due to the rapid growth of Chinese herbal medicine business. During the reporting period, the company's sales expense rate decreased by 8.45pct to 18.72%, the management expense rate decreased by 5.55pcts to 9.19%, and the financial expense rate decreased by 1.11pcts to 3.90%.
The main business of traditional Chinese medicine grew steadily, and Shuxuening injection was approved with new specifications. The company's proprietary Chinese medicine products are mainly used for the treatment of cardiovascular and cerebrovascular diseases, including Xuesaitong for injection, Shuxuening injection and xueshutong capsule. Under the background of population aging, the market space of Chinese patent medicine for cardiovascular and cerebrovascular diseases is broad. According to the data of Intranet, in 2020, the market scale of Chinese patent medicine for cardiovascular and cerebrovascular diseases in China reached 84.732 billion yuan, of which the market scale of Shuxuening injection was 1.673 billion yuan, and the single variety market accounted for 1.97%. At present, there are 8 manufacturers of Shuxuening injection, with CR3 market share accounting for 76.16%, and the industry competition pattern is good. In 2020, the market share of Heilongjiang Zbd Pharmaceutical Co.Ltd(603567) Shuxuening Injection reached 19.19%, ranking in the forefront of the industry with leading advantages. Based on the original 2ml and 5ml of Shuxuening injection, the company was approved with a new specification of 10ml. On the one hand, it can reduce the harm caused by the use of ampoules, on the other hand, it increases the convenience and compliance of clinical use of products and promotes rational drug use. The abundance of drug specifications helps the company expand its revenue space.
Bozhou traditional Chinese medicine trading center "Shennong warehouse" has been comprehensively upgraded to create the integration of traditional Chinese medicine industry chain. Adhering to the concept of integration of traditional Chinese medicine industry chain, the company adheres to extending its main business to the trade of genuine traditional Chinese medicine and traditional Chinese medicine. In 2021, the company completed the comprehensive upgrading of "Shennong warehouse", a warehouse type Chinese herbal medicine hypermarket, in the Chinese herbal medicine commodity trading center in Bozhou, Anhui Province. As the first of the four major drug capitals, Bozhou is the largest distribution market and price forming market of traditional Chinese medicine in the world, which can give full play to the advantages of origin and supply of traditional Chinese medicine. At the same time, Bozhou traditional Chinese medicine trading center of the company will also rely on the third-party e-commerce platform "shennongcai" for online sales, adopt the trading mode of online hanging, offline display and remote video viewing, and innovate to realize the integration of traditional Chinese medicine Wuxi Online Offline Communication Information Technology Co.Ltd(300959) . Relying on the advantages of integration of traditional Chinese medicine industry chain and the rapid growth of trading center business, the company's traditional Chinese medicine business is expected to rise steadily. We expect the revenue CAGR of the company's traditional Chinese medicine sector to be 30 ~ 40% in 21-23 years.
Raised funds were invested and the layout of biological drugs was accelerated. As of October 22, 2021, the issuer has actually issued 92.8036 million RMB ordinary shares in this non-public offering of a shares, with an issue price of 13.34 yuan per share, raising a total of 1.238 billion yuan. According to the company's previous announcement, the raised funds will be used for the R & D platform of innovative drugs and generic drugs, Jixi phase III project of chemical drug API, origin processing of traditional Chinese medicine, etc. The landing of raised investment funds provides financial guarantee for the company's comprehensive business strategic transformation. In terms of chemical medicine, on November 9, the company's chemical generic ambroxol hydrochloride injection was approved for registration and production, which enriched the company's respiratory product pipeline. In recent years, the company has also actively invested in research and development in the field of anti-virus and anti-tumor by introducing cooperation + independent research and development, looking for breakthroughs in high-end preparations and innovative drugs of chemical drugs. In the field of biological drugs, the company plans to set up a wholly-owned subsidiary in Qiantang new area of Hangzhou to invest in the construction of Hangzhou biological drug project and engage in the R & D of antitumor ADC drugs. It is expected to complete the layout of 8 product pipelines in 2022, with rich pipeline target layout and broad market space. Through cooperative R & D + independent R & D, the company accelerates the entry speed of biological drugs and chemical drugs and improves the company's comprehensive competitiveness.
The investment suggestion company is a leading Chinese traditional medicine enterprise. In recent years, it has rapidly expanded the upstream of traditional Chinese medicine and established Bozhou traditional Chinese medicine trading center to expand and strengthen the main business of traditional Chinese medicine. At the same time, the company has accelerated the investment layout in the field of biological medicine, formed a good investment cooperation relationship with tress and other famous Chinese biological medicine companies, and is optimistic about the future development prospects. We expect that the net profit attributable to the parent company from 2021 to 2023 will be RMB 550 / 650 / 750 million respectively, the corresponding EPS will be RMB 0.6 / 0.7 / 0.8 respectively, and the corresponding PE of the current stock price will be 26 / 22 / 19x, maintaining the "recommended" rating.
The risk indicates that the intensive purchase of traditional Chinese medicine is more than expected; Risk that R & D progress is less than expected.
