\u3000\u30 Shenzhen Fountain Corporation(000005) 13 Livzon Pharmaceutical Group Inc(000513) )
Livzon Pharmaceutical Group Inc(000513) issue the 2021 annual report. In 2021, the annual operating revenue was 12.064 billion yuan, with a year-on-year increase of 14.67%, the net profit attributable to the parent company was 1.776 billion yuan, with a year-on-year increase of 3.54%, and the non net profit attributable to the parent company was 1.627 billion yuan, with a growth rate of 13.66%, realizing eps1.5% 90 yuan. In Q4, the operating revenue in a single quarter was 2.695 billion yuan, a year-on-year increase of 3.84%, the net profit attributable to the parent was 323 million yuan, a year-on-year increase of 10.09%, and the non net profit attributable to the parent was 283 million yuan, a growth rate of 11.94%.
The growth rate of chemical agents sector is obvious, and the key advantageous fields such as digestive tract, sex promoting hormone and spirit continue to grow. The company’s revenue and profit are in line with expectations. The growth of revenue is close to 15%, and the growth rate of non profit is slightly slower than that of revenue. The main reason is the strong investment in R & D. The difference between the growth rate of return to parent profit and the growth rate of deduction from non parent profit mainly lies in the confirmation of equity income of Jiangsu Nico last year.
In terms of sections, the high growth rate of chemical agents (+ 33.71%) exceeded expectations. Among them, the sales of key advantageous areas such as digestive tract (+ 50.40%), sex hormone (+ 28.34%), psychotropic drugs (+ 48.55%) achieved sustained and rapid growth year-on-year. The revenue of traditional Chinese medicine decreased. The profitability of API (+ 19.20%) increased steadily, the overseas market of vancomycin, teicoplanin and other high-end antibiotic products grew strongly, and the diagnostic reagent section declined significantly due to the high base last year.
The company’s R & D accelerated. In the past 21 years, the company invested 1.523 billion in overall R & D, with a year-on-year increase of 53.93%, accounting for 12.63% of revenue. Among them, recombinant human chorionic gonadotropin was approved to be listed in China; The production of tozumab injection has been officially reported and accepted, and a number of other research and development have been continuously promoted. There are 7 projects under research for microspheres and other high barrier complex preparations (1 production report; 1 phase I; 2 be (pre) tests); Approved clinical (2 items). According to the progress, we expect that the products expected to be on the market from 2022 to 2023 include covid-19 recombinant protein vaccine V01, lzm008 (ir-6r), triptorelin microspheres, ruracidone tablets, bunanserin tablets, leuprorelin microspheres (3m), lzm009 (PD-1), aripiprazole microspheres (1m), octreotide microspheres (1m), etc. the continuous approval of products is expected to drive the continuous growth of the company’s revenue.
V-01 sequential enhanced phase III clinical interim data were positive. The recombinant New Coronavirus fusion protein vaccine V-01 has completed the interim main data analysis of the sequential enhanced III phase trial: the sequential enhanced absolute protection rate reached 61.35%, which was significantly superior to the WHO standard and had good protection against Omicron mutation infection. The protective power of high-risk population with basic diseases was 71.83%.
Profit forecast and valuation. Based on the company’s excellent management, sales team, monoclonal antibody platform, microsphere platform, etc., the company’s long-term investment value is prominent. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 2.053 billion yuan, 2.395 billion yuan and 2.777 billion yuan respectively, with an increase of 15.6%, 16.6% and 16.0% respectively. EPS is 2.19 yuan, 2.55 yuan and 2.96 yuan respectively, and the corresponding PE is 18x, 16x and 13X respectively. After deducting incentive fees, the actual performance growth rate is higher. We believe that the company has high certainty of performance growth, low valuation, innovative long-term layout of biological drugs + high-end complex preparations, and the internationalization strategy is expected to continue in the future. We are optimistic about the long-term development of the company and maintain the “buy” rating.
Risk tips: risk of industrial policy change, product price reduction and new drug R & D.
