\u3000\u3 China Vanke Co.Ltd(000002) 873 Guiyang Xintian Pharmaceutical Co.Ltd(002873) )
Focus on the research, development and innovation of traditional Chinese medicine for more than 30 years, focus on gynecological and urological diseases, and give a "buy" rating
The company is mainly engaged in the R & D, production and sales of Chinese patent medicine products for gynecology, urinary system diseases and other diseases with complex etiology. Relying on the rich resources of Chinese herbal medicine in Guizhou Province, the company focuses on the R & D and innovation of Chinese medicine. Now it has basically formed an industrial pattern of "Chinese patent medicine - traditional Chinese medicine granules - ancient classic famous prescriptions - small molecular drugs". The company set up equity incentive in 2021, with the goal of doubling revenue for three years, firm development determination and strong growth certainty. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 100 / 127 / 163 million yuan respectively, with EPS of 0.61, 0.77 and 0.99 yuan / share respectively, and the current share price corresponding to PE of 38.0 / 30.1 / 23.4 times respectively. The company takes the lead in the subdivided field of traditional Chinese medicine. The expansion of OTC channels helps speed up the performance, has great growth potential, and is given a "buy" rating for the first time.
The product line is rich, and the four exclusive patent varieties in China have been clinically verified for many years and have a good competition pattern
The company has 32 pharmaceutical production approval products, the leading product Kun Tai capsule, Ningmei Tai capsule, Kushen gel and Prunella vulgaris oral liquid are exclusive patent varieties in China. According to our calculations, the potential market space of Kun Tai capsule, Sophora flavescens gel and Ningmai capsule is about 30, 11 and 2 billion 300 million yuan respectively. According to the annual report of the company, the sales of the three major products in 2019 are 3.15, 1.83, and 183 million yuan respectively. They still have broad room for growth. The company's leading products are all medical insurance catalogues with remarkable efficacy and high safety. The company actively carries out the secondary development of key varieties and the expansion of superimposed channels, and the key varieties are expected to be further expanded.
Sufficient pipeline under research, vigorously expand OTC channels and open up future growth space
The company actively develops new indications with varieties, re evaluates the listed varieties, and selects the drugs with the best clinical efficacy for comparative test, so as to continuously improve the competitiveness of products. In terms of R & D reserves, the company has 3 traditional Chinese medicine products, including long Cen Shu Shu Shu granule, Ku Er Jie Yin gel and Shu Yu Tong granule, and has completed the phase three clinical trial. There are 445 varieties of traditional Chinese medicine formula granules in clinical research; Several classic famous varieties are under research, which is expected to become a new revenue and profit growth point of the company. By increasing capital, huilun bio has gradually arranged the field of small molecular chemical drugs. Huilun bio is committed to the research and development of generic drugs and innovative drugs with clear clinical demand, great market potential and good competition pattern. The large-scale production line has advantages and great growth potential. The company's advantages in the whole industrial chain of R & D, production and channels are prominent. Since 2018, the company has vigorously expanded OTC channels, with the goal of increasing the sales proportion of OTC channels to 50% or more. It is expected to further promote product sales, improve profitability and avoid the risk of centralized purchase.
Risk tip: drug research and development failed, channel promotion was not as expected, etc.
