\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 23 Yipinhong Pharmaceutical Co.Ltd(300723) )
Event:
1) the company released its 2021 annual report, realizing an operating revenue of 2.199 billion yuan, a year-on-year increase of + 31.26%; The net profit attributable to the parent company was 307 million yuan, a year-on-year increase of + 36.04%; Deduct 182 million yuan of net profit not attributable to the parent company, a year-on-year increase of + 24.95%; Net operating cash flow was 438 million yuan, a year-on-year increase of + 59.18%. The performance is in line with market expectations.
2) the company released the first quarterly report of 2022, realizing an operating revenue of 516 million yuan, a year-on-year increase of + 0.18%; The net profit attributable to the parent company was 80 million yuan, a year-on-year increase of + 17.27%; Deduct the net profit not attributable to the parent company of 71 million yuan, a year-on-year increase of + 10.20%; Net operating cash flow was 28 million yuan, a year-on-year increase of + 144.77%. The performance is in line with market expectations.
Comments:
The pharmaceutical manufacturing business is growing rapidly, and all regions in the country are more balanced: from 2021q1 to Q4, the company’s single quarter operating revenue is 5.15/4.38/7.00/546 million yuan respectively, with a year-on-year increase of + 51.70% / 40.80% / 28.83% / 13.44%; The net profit attributable to the parent company was 68 / 0.50 / 170 / 19 million yuan, a year-on-year increase of + 57.31% / + 34.18% / + 46.66% / – 35.83%; Net profit deducted from non parent company was 65 / 0.43 / 1.00 / – 25 million yuan, with a year-on-year increase of + 40.17% / + 58.59% / + 33.97% / loss. The negative growth of Q4 profit was mainly due to the impact of equity payment fees and interest accrued on convertible bonds calculated in the second phase of employee equity incentive plan in 2021 on the company’s net profit after deduction of non return of RMB 35 million. After deducting the impact, the annual net profit attributable to the parent company was RMB 342 million, a year-on-year increase of + 51.62%, and the net profit not attributable to the parent company was RMB 217 million, a year-on-year increase of + 49.09%. The substantial increase in net operating cash flow was mainly due to the substantial increase in the company’s pharmaceutical manufacturing business income, the strengthening of accounts receivable management, the strengthening of loan collection, and the increase in the amount of government subsidies and tax returns. By business category:
Pharmaceutical manufacturing of children’s drugs: the revenue was 1.13 billion yuan, a year-on-year increase of + 59.68%. “Montelukast sodium granules”, “ambroxol hydrochloride drops” and “levocetirizine hydrochloride oral drops” were approved for marketing; Nine products, including clindamycin hydrochloride palmitate dispersible tablets and Qinxiang Qingjie oral liquid, were recommended in the clinical application guide of Chinese children’s drugs. The sales volume of Yipi Qinglin hydrochloride dispersible tablets and palmitate hydrochloride dispersible tablets increased by about 8.9% year-on-year, of which the sales volume of Yipi Qinglin hydrochloride and palmitate hydrochloride dispersible tablets increased by about 8.9% year-on-year;
Pharmaceutical manufacturing of chronic disease drugs: the revenue was 823 million yuan, a year-on-year increase of + 23.03%. The revenue scale of chronic disease drugs such as Acetylglutamide for injection, bromohexin hydrochloride for injection and adenosine cyclophosphate for injection increased rapidly, of which the revenue of Acetylglutamide for injection was about 595 million yuan, a year-on-year increase of 29.39%;
Pharmaceutical manufacturing of other drugs: the revenue was 62 million yuan, a year-on-year increase of + 170.31%.
Pharmaceutical agents and others: the revenue was 185 million yuan, a year-on-year increase of – 33.14%.
The company continued to strengthen the development of the national market, and the market income of each region was more balanced. In 2021, the central China region accounted for + 13.36% year-on-year, and the revenue accounted for 7.79%; South China + 22.42% year-on-year, accounting for 30.05% of revenue; East China + 22.67% year-on-year, accounting for 35.52% of revenue; North China + 60.58% year-on-year, accounting for 8.46% of revenue; Northeast China + 141.87% year-on-year, accounting for 5.58%; Southwest China + 50.20% year-on-year, accounting for 10.11% of revenue; Northwest China + 65.77% year-on-year, accounting for 2.50%. 8673 new hospital terminals of various types were developed throughout the year; Including 1885 grade hospitals, and many products have won the bid in 28 provinces. With the gradual increase of the company’s market coverage and the number of products sold, it will be conducive to the sustainable growth of income scale.
R & D investment continued to increase, and the pace of innovation and transformation was firm: in 2021, the company invested 659 million yuan in independent R & D investment and capital increase R & D investment, accounting for about 30% of the operating revenue, including 142 million yuan in independent R & D investment (all expenses) and 517 million yuan in capital increase R & D investment. As of the disclosure date of the annual report, the company has obtained 13 drug (RE) registration approvals and 2 clinical trial approvals. The main R & D projects of capital increase include:
1) invest about RMB 382.5 million in stages to participate in the C2 round of preferred stock financing of Arthrosi, and cooperate with Arthrosi to establish ruianbo to develop the global uric acid reducing innovative drug ar882 and small molecule innovative drug ar035. In the clinical phase I and phase IIa trials, ar882 did not have any adverse events of hepatotoxicity or nephrotoxicity, which overcomes the disadvantage of high hepatorenal toxicity of uric acid excretion promoting drugs recinade and benzbromarone; It can bind to uric acid transporter for a long time in human body and inhibit uric acid reabsorption for 24 hours. The effect of ar882 on reducing uric acid is better than that of clinical first-line drugs. It has great potential to reduce the attack of gout, accelerate the dissolution of gout stone and treat chronic kidney disease; For gout patients with CKD, ar882 has obvious safety advantages over other gout drugs.
2) invested 12million yuan to participate in alpha molecular technology of AI new drug R & D company;
3) invested 35 million yuan to participate in di pharmaceutical, a branch of innovative drug R & D company, and laid out proded targeted protein degradation drug development technology platform;
4) invested about 21 million yuan to cooperate with Shenzhen Ruihua Pharmaceutical Technology Co., Ltd. to develop tofatib citrate sustained-release tablets;
5) invest US $5 million to participate in lyndra therapeutics, the world’s leading innovative drug research and development company, and cooperate in the research and development of ultra long-acting sustained-release oral preparations;
6) successively invested 15 million yuan and 28 million yuan to obtain the production approval documents of epistine hydrochloride granule preparation and API developed by Chongqing Angel Longxiang Pharmaceutical Co., Ltd. and Chongqing ruipolai Pharmaceutical Co., Ltd. respectively through technology transfer, and the product ownership of fenofibrate choline sustained-release capsule and API in China under the development of the transferor;
7) invested 134804 million yuan to hold the South China vaccine, an innovative R & D enterprise of recombinant protein vaccine. In March 2022, in order to support the early research and development of vaccines in South China and the continuous promotion of follow-up business, the capital was increased by 498807 million yuan again;
8) increase the capital of the holding subsidiary Pinsheng Pharmaceutical by 30 million yuan to carry out drug clinical research. Covid-19 epidemic affected Q1 performance, and the business structure continued to develop well: the revenue of 2022q1 company was the same as that of the same period of last year, mainly because the sales work in some regions was affected by the spread of covid-19 epidemic, but the overall business structure of the company still maintained a good development, including 499 million yuan of revenue from medical products, a year-on-year increase of + 12.48%, children’s drugs + 15.25%, of which clindamycin palmitate dispersible tablets + 16.84%, The income of Qinxiang Qingjie oral liquid, Fuganlin oral liquid, Yiqi Jianpi oral liquid and other children’s drugs increased rapidly compared with the same period, and the income of chronic disease drug products increased by + 1.71% year-on-year.
Profit forecast, valuation and rating: maintain the forecast that the net profit attributable to the parent company from 2022 to 2023 will be 418 / 523 million yuan, and the new forecast that the net profit attributable to the parent company in 2024 will be 658 million yuan, with a year-on-year increase of 36.30% / 25.04% / 25.80%. According to the latest equity calculation, the corresponding EPS is 1.45/1.82/2.28 yuan, and the current price corresponding PE is 19 / 15 / 12 times respectively, maintaining the “buy” rating.
Risk warning: the risk that sales are lower than expected; The risk that the R & D of innovative drugs is lower than expected; The risk of M & A integration is lower than expected.
