\u3000\u Guangzhou Improve Medical Instruments Co.Ltd(300030) Cofco Biotechnology Co.Ltd(000930) 0009)
Events
On March 30, the company released its annual report for 2021. In 2021, the company realized an operating revenue of 2.169 billion yuan (+ 27.47%), a net profit attributable to the parent company of 207 million yuan (- 42.44%), and a net profit deducting non attributable to the parent company of 158 million yuan (- 50.08%). The performance is lower than expected.
Comments
The sales of biological products of the parent company maintained rapid growth, and the provision for goodwill impairment of subsidiaries affected the apparent performance. Due to the impact of the parent company's impairment provision of RMB 1.23 billion and the net profit of Sumitomo Jihao (+ 1.25 billion), excluding the impact of the parent company's impairment provision of RMB 1.23 billion), the net profit of Sumitomo Jihao was increased by RMB 1.25 billion in 2023.
The gross profit margin increased steadily, the expense rate was optimized, and the turnover rate of accounts receivable was improved. In the past 21 years, the company achieved a gross profit margin of 80%, an increase of 1.28% over the same period last year, a sales expense rate of 30.63%, a decrease of 4.03% over the same period last year, and a management expense rate of 4.78%, a decrease of 1.03% over the same period last year. In addition, the company's accounts receivable turnover days decreased compared with last year, and the collection was good.
Many important progress has been made in the optimization and upgrading of growth hormone, and the industrialization ability of powder injection dosage forms has been further enhanced. In the past 21 years, the company's core product human growth hormone has made many breakthroughs: 1) two new approved indications, idiopathic short stature (ISS) and Turner syndrome, of which ISS indication is the first approved in China and has become the enterprise with the most approved indications of growth hormone in China. 2) The specifications of human growth hormone injection have also been continuously improved, and the new specifications of 6iu and 8iu have been approved for listing. 3) The company's new production capacity of 20 million injections of human growth hormone in the North District has been approved and has been officially approved for production, which will effectively solve the bottleneck problem of existing production capacity and continue to consolidate the company's leading position in powder injection.
Profit adjustment and investment suggestions
We maintain the profit expectation from 2022 to 2023. It is expected that the company will realize the net profit attributable to the parent company of RMB 669 (+ 224%) and RMB 862 (+ 29%) respectively. Considering the broad market space of the growth hormone industry and the implementation of the company's new production capacity, it is expected to realize the net profit attributable to the parent company of RMB 1083 million (+ 26%) in 2024.
From 2022 to 2024, the company's corresponding EPS is 0.41, 0.53 and 0.66 yuan respectively, and the corresponding current PE is 24, 19 and 15 times respectively. Maintain the "buy" rating.
Risk tips
The expansion and market promotion of new growth hormone patients did not meet expectations; Intensified market competition; R & D progress is less than expected; Policy risk; Goodwill impairment risk, etc.
