\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 422 Kpc Pharmaceuticals Inc(600422) )
Matters:
The company released its report for the first quarter of 2022, realizing a revenue of 2.364 billion yuan, a year-on-year increase of 24.71%; The net profit attributable to the parent company was 114 million yuan, a year-on-year decrease of 41.27%; The net profit attributable to the parent company after deduction was 106 million yuan, with a year-on-year increase of 21.37%. The company’s performance is in line with expectations.
Ping An View:
The performance of 2022q1 is stable, laying a good foundation for the performance of the whole year. In 2022q1, the revenue was 2.364 billion yuan (+ 24.71%), and the net profit attributable to the parent was 114 million yuan (- 41.27%). The year-on-year decrease in the net profit attributable to the parent was mainly due to the large investment income obtained from the transfer of 51% equity of Kunming yinnuo pharmaceutical in the same period of last year, deducting 106 million yuan (+ 21.37%), which maintained the same level of growth as the income end. In the second half of 2021, dragged down by the injection, the net profit deducted by the company from non parent company was less than expected. However, the performance of 2022q1 indicates that the probability of all businesses of the company has returned to the growth track, and the company is optimistic about the non high growth of the whole year of 2022.
Xuesaitong oral and Kun traditional Chinese medicine continue to be in high volume. We believe that 2022q1 Xuesaitong oral series is expected to continue its high growth of about 20%, in which the market outside the hospital is outstanding, and the retail channel of Xuesaitong Soft capsule increased by 75% year-on-year. Driven by the gold single product, Kunming traditional Chinese medicine continued to build its brand and achieved an income of 386 million yuan (+ 12%) in 2022q1. Among them, core products such as Shenling jianpiwei granule, Shugan granule, xiangshapingwei granule, Kouyanqing pill, Jinhua Xiaocuo pill and Qingfei Huatan pill increased by 10.37%, 9.63%, 23.03%, 43.93%, 280.31% and 45.29% respectively year-on-year.
Grasp the opportunity of centralized purchase of Chinese patent medicine and be optimistic about the rebound of the injection at the bottom. The company’s Xuesaitong (freeze-dried) for injection won the bid in the centralized collection of Chinese patent medicines of 19 provincial alliances in Hubei and 6 provincial alliances in Guangdong, and the sales volume is expected to continue to increase. With the implementation of medical insurance payment pilot policies in various provinces, the injection ushered in the deregulation of medical insurance, and the company’s Xuesaitong for injection (freeze-dried) and gastrodin injection are expected to hit the bottom and rebound. In 2021, the company’s injection revenue was 850 million yuan, which was as high as 2.13 billion yuan in 2019, so there is a lot of room for injection rebound.
The oral series grew rapidly, and the injection rebounded at the bottom, maintaining the “recommended” rating. We maintain the company’s forecast of net profit of 579 million yuan, 662 million yuan and 792 million yuan from 2022 to 2024 respectively. The current share price corresponds to only 15.4 times of PE in 2022, with large room for valuation improvement, and maintain the “recommended” rating.
Risk warning. 1) Market and policy risks: medical insurance fee control is still the main theme of the pharmaceutical industry. There is the possibility of centralized purchase of the company’s core products, and there may be some uncertainty about the rebound of injections; 2) Drug R & D is less than expected: at present, the company has many varieties under research, and the R & D progress may be less than expected; 3) Impact of the epidemic on the company’s operation: the recurrence of the national epidemic in early 2022 may have an adverse impact on the company’s annual performance.
