\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 91 Sirio Pharma Co.Ltd(300791) )
Key investment points
Event: Sirio Pharma Co.Ltd(300791) released the annual report of 2021 and the first quarterly report of 22 years. In 21 years, it realized revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company of 2.369 billion yuan / 232 million yuan / 210 million yuan, with a year-on-year increase of 14.62% / – 9.92% / – 5.61%. 21q4 realized revenue / net profit attributable to parent company / deduction of net profit not attributable to parent company 621 million yuan / 315 million yuan / 246 million yuan, with a year-on-year increase of 1.22% / – 55.90% / – 59.71%; 22q1 realized revenue / net profit attributable to parent company / deduction of net profit not attributable to parent company 421 million yuan / 232 million yuan / 210 million yuan, with a year-on-year increase of – 17.01% / – 74.48% / – 91.80%.
The implementation of medical insurance policy and the impact of the epidemic on offline channels are expected to improve month on month: the income of 21q4 and 22q1 is mainly due to the implementation of the health food ban medical insurance policy in some regions since the second half of last year, superimposing the impact of the epidemic, resulting in the weak purchase intention of drugstore channels. Therefore, the growth rate of China’s business declined in the second half of 21 years and January February of 22 years, of which the traditional dosage forms were more affected. At present, channel tracking shows that most of the country has implemented the new medical insurance policy, and the purchase intention of pharmacies and other channels has been picking up after destocking. In terms of overseas business, the decline in Europe has narrowed quarter by quarter, and a team for key customers in Europe is being established; The United States still maintains high-speed growth and is expected to promote product upgrading through new soft capsule technology; Other new markets are also expected to achieve rapid development through the agent model. From the base point of view, the epidemic situation in China in 21 years has gradually affected xianle drugstores and direct sales channels since the third quarter, and the base is relatively low in the second half of the year. The unlocking goal of equity incentive companies is to increase revenue by 70% in 22 years compared with 19 years, that is, by about 13% compared with 21 years. According to the current situation in the first quarter, it is necessary to achieve revenue of 2.264 billion in the next three quarters, corresponding to a year-on-year growth rate of about 22%. To sum up, we believe that the revenue in the last three quarters of this year is expected to improve quarter on quarter.
The growth was driven by new dosage forms, and the new production capacity of soft candy began trial production in the second quarter. In addition to the 20-digit growth rate of each dosage form, we believe that the growth rate of each dosage form in the whole year is more balanced, and the growth rate of the other dosage forms is more significant after the decline of the two-digit growth rate of 21h2 dosage forms. In the 21st year, the revenue of traditional dosage form soft capsules / tablets increased by 2% / 10% and that of new dosage form soft candy / functional drinks increased by 44% / 37%. We expect that the main driving force of future growth will still be the new dosage form. At the same time, the traditional dosage form will achieve single digit growth with the expansion of the industry and the increase of the leading market share. According to the company’s annual report, the trial production of the new 1.8 billion soft candy production line is planned to start in the second quarter. We expect to officially generate revenue contribution in the third quarter, which will also help the company accelerate the growth of revenue month on month.
The gross profit margin is expected to warm up, and the impact of financial expenses may continue. The company’s 22q1 net profit margin decreased by 7.82pct to 3.48% year-on-year. Among them, the gross profit margin decreased by 7.4pct to 28.1% year-on-year, mainly due to the increase in the amortization cost of fixed expenses due to insufficient orders. At present, the channel tracking shows that the willingness of offline channels to purchase goods has been strengthened, and we expect the gross profit margin to return to the average level of normal years in the future; The sales expense rate decreased slightly; Management expenses increased by 8.9% year on year; The financial expense ratio increased by 1.11pct to 2.50%, mainly due to the increase in interest caused by convertible bonds. We expect that if convertible bonds are not converted into shares this year, with the production of the new fudge production line in the second quarter, the capitalization of loans may be reduced, resulting in higher financial costs than in 2021. Overall, the net profit margin is expected to recover with the improvement of gross profit margin.
Profit forecast and investment suggestions: Based on the 21st Annual Report and the first quarterly report of 22 years, we adjusted the profit forecast. In terms of income, the first quarter dragged down the annual income to a certain extent, but it is expected that the impact of China’s business epidemic and medical insurance policy is expected to improve marginally; The gross profit margin declined year-on-year in the first quarter, and it is expected that it will return to the normal level with the recovery of downstream demand in the second three quarters; At the same time, taking into account the impact of convertible bonds, the expectation of financial expenses has been raised accordingly. It is estimated that the company’s revenue from 2022 to 2024 will be 2.702 billion yuan, 3.125 billion yuan and 3.584 billion yuan respectively, with a year-on-year increase of 14.06%, 15.67% and 14.67%. It is estimated that the net profit attributable to the parent company will be 241 million yuan, 295 million yuan and 346 million yuan, with a year-on-year increase of 3.93%, 22.35% and 17.39%, EPS will be 1.34, 1.64 and 1.92 yuan respectively (the previous 20222023 was 2.20 and 2.76 yuan), and the corresponding PE will be 20x, 17x and 14x respectively. Maintain the “buy” rating.
Risk tips: industry policy risk, risk that the new production capacity is less than expected, risk of intensified competition, risk of raw material price fluctuation, risk that the public data used in the research report may have information lag or untimely update, and risk of industry measurement deviation.
