\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 867 Tonghua Dongbao Pharmaceutical Co.Ltd(600867) )
Event:
The company released its 2021 annual report, realizing an operating revenue of 3.268 billion yuan, a year-on-year increase of + 12.99%; The net profit attributable to the parent company was 1.308 billion yuan, a year-on-year increase of + 40.69%; Deduct the net profit not attributable to the parent company of RMB 1.105 billion, a year-on-year increase of + 15.68%; Net operating cash flow was 1.135 billion yuan, a year-on-year increase of – 4.84%; EPS 0.64 yuan. The performance slightly exceeded market expectations.
Comments:
Focus on the improvement of the profitability of the main industry of insulin, and the strong growth of insulin analogues: from 2021q1 to Q4, the company’s single quarter operating revenue was 8.23/8.39/7.93/813 million yuan respectively, with a year-on-year increase of + 14.52% / 11.00% / 11.52% / 15.05%; The net profit attributable to the parent company was RMB 337 / 3.37 / 3.94 / 241 million, a year-on-year increase of + 21.33% / 27.78% / 83.72% / 38.12%; Deduct the net profit not attributable to the parent company of RMB 337 / 3.19 / 2.46 / 204 million, a year-on-year increase of + 20.46% / 21.42% / 17.17% / 0.18%. In 2021, the company’s non recurring profit and loss was 204 million yuan, of which the investment income from the disposal of long-term equity investment was 236 million yuan, which is estimated to be mainly the income from the reduction of Tebao Jinyu Bio-Technology Co.Ltd(600201) . In 2021, the comprehensive gross profit margin reached 82.38%, with a year-on-year increase of 2.73pp, mainly because the company continued to focus on the main business of insulin, and the proportion of people with high gross profit in the income of insulin and insulin analogues increased. By business:
Human insulin API and injection products: the operating revenue was 2.419 billion yuan, with a year-on-year increase of + 6.83%, and the gross profit margin was 87.89%, with a year-on-year increase of 0.69pp. The increase in gross profit margin is mainly due to the increase in output, economies of scale and operational leverage. Human insulin series products maintained steady growth, providing strong cash flow support for the company’s development.
Insulin analogue API and injection products: the operating revenue was 401 million yuan, with a year-on-year increase of + 204.79%, and the gross profit margin was 91.21%, with a year-on-year increase of 0.90pp. The increase in gross profit margin is mainly due to the increase in output, economies of scale and operational leverage. In 2021, the sales volume of insulin glargine increased by more than 200% year-on-year. By the end of March 2022, the bidding and filing work of 29 provinces and cities had been completed, and more than 3800 hospitals at and above level II had been entered, laying a solid foundation for continuous and large-scale sales in the future. Insulin aspart was approved to go on the market in October 2021. It forms an intensive scheme combined with insulin glargine basic + meal insulin treatment. By the end of March 2022, it has successfully entered hundreds of hospitals.
Medical devices such as pen for injection and blood glucose test paper: the operating revenue was 303 million yuan, with a year-on-year increase of – 9.20%, and the gross profit margin was 38.90%, with a year-on-year increase of 0.90pp;
Chinese patent medicine and chemical medicine: the operating revenue was 64 million yuan, with a year-on-year increase of + 30.17%, and the gross profit margin was 62.09%, with a year-on-year increase of 2.38pp;
Commercial housing in Lijing Garden community: the operating income was 29 million yuan, with a year-on-year increase of – 57.47%, and the gross profit margin was 37.46%, with a year-on-year increase of 5.35pp;
Plastic steel windows and profiles: the operating revenue was RMB 02 million, with a year-on-year increase of – 67.85%, and the gross profit margin was 92.47%, with a year-on-year increase of 70.29pp.
Vigorously promote innovation and transformation, expand the field of treatment, and layout multi indication products: in 2021, the company invested 380 million yuan in R & D, accounting for 11.63% of the operating revenue, including 167 million yuan in expense, and the R & D expense rate is 5.11%. The research project includes 3 new diabetes drugs, 2 new gout / hyperuricemia treatment areas, and a new oral chemical drug for gout treatment.
Asparagus insulin 30 and 50 injection: the on-site verification of pharmaceutical production of the declared varieties was completed in January 2022, and it is currently in the stage of sorting out the supplementary materials;
Insulin Lispro Injection 25R: phase I trial has been completed and all subjects have been enrolled. At present, it is in the stage of data cleaning and summary; The phase III trial has now completed the enrollment of 50% of cases
The database of insulin Lispro Injection 50R: phase I pre-test has been locked and is currently in the stage of statistical analysis and summary report writing;
Hypereffective lispro insulin (thdb0206): phase I clinical trial is being carried out, and an application for parallel phase III clinical trial communication meeting was submitted to CDE in March 2021. It was reviewed and approved by CDE in October 2021 to start the preparation of phase III clinical trial.
Soluble glargine lispro double insulin injection (thdb0207): received the notice of approval for clinical trial approved and issued by the State Drug Administration in March 2022. In addition, three phase I clinical trials of the product were approved by the German Federal Drug and medical device administration (bfarm) in April 2022;
Liraglutide injection: the clinical trial summary report was completed in December 2021 and is in the pre NDA stage;
SGLT1 / SGLT2 / DPP4 three target inhibitor: the first subject in clinical phase I was enrolled in February 2022;
Profit forecast, valuation and rating: considering the rapid growth of the company’s sales of insulin analogues and the moderate price of centralized purchase of insulin, the forecast of net profit attributable to the parent company from 2022 to 2023 was raised to RMB 1479 / 1676 million (the original forecast was RMB 1285 / 1477 million, with an increase of 15% / 13% respectively). The new forecast of net profit attributable to the parent company in 2024 was RMB 1.897 billion, with a year-on-year increase of 13.03% / 13.33% / 13.21%. According to the latest equity calculation, EPS was RMB 0.74/0.83/0.94, The current price corresponding to PE is 14 / 13 / 11 times respectively, maintaining the “overweight” rating.
Risk warning: the increase of insulin manufacturers leads to the risk of intensified competition; The risk that the progress of R & D and application of new products does not meet the expectations; The successful development of oral insulin poses a risk of competition for injections.
