\u3000\u3 Guocheng Mining Co.Ltd(000688) 658 Youcare Pharmaceutical Group Co.Ltd(688658) )
Main points:
Layout of the whole industrial chain, steady improvement of business conditions and continuous enhancement of profitability
Based on the R & D, production and sales of high-end pharmaceuticals, the company has biotech growth factor and keeps pace with profitability and innovation. Its main business covers the whole industrial chain of drug R & D, manufacturing, circulation and sales, as well as raw materials, excipients and preparations. It can produce products including injection, freeze-dried powder, injection, tablet Various dosage forms such as capsules and some raw materials, covering 12 drug fields such as cardio cerebrovascular, digestive system, anti infection, endocrine, anti-tumor and reproductive health. The 21 subsidiaries controlled by the company have a comprehensive layout of new drug R & D, pharmaceutical preparations, pharmaceutical raw materials, circulation and sales and international trade. The company’s operating income and net profit attributable to the parent company have continued to grow in recent five years, among which pharmaceutical manufacturing has become the main profit growth point; The gross profit margin and net profit margin maintained a sustained growth trend.
The listed products cover many fields, and the volume of the three main products is strong
At present, the company has 266 products approved for listing, covering 12 drug fields such as cardio cerebrovascular, digestive system, anti infection, endocrine, anti-tumor and reproductive health. (1) Ginkgo biloba extract injection is mainly used for the treatment of brain and peripheral blood circulation disorders. It is the only Ginkgo biloba extract injection approved by domestic chemicals. Its sales have continued to grow in recent five years and contributed to the growth of the company’s main sales. (2) In 2018, yuekang pill was listed as the exclusive national medicine for ischemic angina pectoris and stable angina pectoris; Compared with the products with similar indications approved for listing in China, Huoxin pill mainly comes from abroad. Huoxin pill has advantages in the Chinese patent medicine market. Its sales volume and sales revenue have increased continuously and rapidly in the past three years. (3) Aidinafei citrate tablet is the first domestic patented new drug in the field of class 1.1 anti ed in China, which is used to treat male erectile dysfunction. It has a new chemical structure and will provide patients with new treatment options. As a new drug on the market recently, it is expected to become a new profit growth point.
Strong R & D strength, rich pipelines, focusing on drug research, and broad market prospects
The company has a technology platform for slow-release and controlled-release preparations, a technology platform for drug crystal form research, a technology platform for high-end pharmaceutical excipients research and development, and a technology platform for fine preparation of cardio cerebrovascular injections, and concentrates resources to build a technology platform for nucleic acid drug research and development; The professional team promotes the further expansion of R & D pipeline. Focus on innovative drugs. At present, there are 14 key products, including 7 projects of category 1 chemical drugs (including anti covid-19 polypeptide drugs), category 1 Traditional Chinese medicine, and 7 small nucleic acid and mRNA R & D pipelines. Ct102 for antisense nucleic acid drug injection, anti covid-19 polypeptide and hydroxysafflower yellow A for traditional Chinese medicine injection, as key drugs under research, have begun to achieve research results in the fields of inhibiting tumor growth, prevention and treatment of covid-19 pneumonia and stroke, middle meridians and blood stasis syndrome. It targets a large number of Chinese patients with diseases and has a broad market prospect.
Equity incentive scheme to mobilize enthusiasm and enhance the company’s innovation
The company announced the draft restricted stock incentive plan for 2021, which plans to grant 13 million restricted shares to incentive objects, accounting for about 2.89% of the company’s total share capital of 450 million shares at the time of announcement of the draft incentive plan. Among them, 10519000 shares were granted for the first time, accounting for about 2.34% of the total share capital of the company when the draft incentive plan was announced. The grant price of restricted shares (including reserved grant) is 10.97 yuan / share. The assessment objectives include the performance assessment objectives of 2022, 2023 and 2024 and the assessment objectives of innovative drugs. The performance assessment objective is based on the net profit in 2021 (the “net profit” index of equity incentive is based on the audited net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses, and excluding the impact of share based payment expenses of this and other incentive plans, the same below). The growth rate of net profit in 2022 in the first vesting period granted for the first time shall not be less than 30%, The second vesting period shall not be less than 69% in 2023, and the third vesting period shall not be less than 119% in 2024. Among the assessment objectives of innovative drugs, there are no less than 2 ind applications newly declared and accepted in 2022, and no less than 1 drug registration certificate obtained; In 2023, at least 2 ind applications were newly declared and accepted, and at least 2 new drug NDA or extended indication (SNDA) were declared and accepted; In 2024, at least 3 ind applications were newly declared and accepted, and at least 2 new drug NDA or extended indication (SNDA) were declared and accepted. The existing commercial products and channels provide a strong guarantee for the realization of equity incentive.
Investment suggestions:
We estimate that the operating revenue of the company from 2021 to 2023 will be 4.965 billion yuan, 6.304 billion yuan and 8.229 billion yuan respectively, with a year-on-year increase of 14.42%, 26.98% and 30.54% respectively. The net profit attributable to the parent company will be 563 million yuan, 737 million yuan and 986 million yuan respectively, with a year-on-year increase of 27.36%, 30.81% and 33.87%, and the corresponding PE will be 19.76x/15.11x/11.29x. We are optimistic about the existing cardiovascular and cerebrovascular diseases of the company Products in digestive system, anti infection, endocrine, anti-tumor, reproductive health and other drug fields and channel strength accumulated by the company for many years. At the same time, it is also optimistic about the scalability of the company’s existing scientific research platform and subsequent nucleic acid drugs, tumor drugs and other pipelines. The gradual realization of the company’s innovative drugs will further improve the valuation. We covered for the first time and gave the company a “buy” rating.
Risk tips:
Industry policy risk; Product R & D risk; Uncertainty of drug sales, etc.
