\u3000\u30 Shenzhen Fountain Corporation(000005) 13 Livzon Pharmaceutical Group Inc(000513) )
Livzon Pharmaceutical Group Inc(000513) released the first quarter report of 2022. In the first quarter of 2022, the company realized an operating revenue of 3.479 billion yuan, with a year-on-year increase of 3.86%, a net profit attributable to the parent of 553 million yuan, with a year-on-year increase of 6.47%, and a non net profit attributable to the parent of 561 million yuan, with a growth rate of 15.61%, realizing eps0 59 yuan.
The chemical preparation sector is growing at a high speed and steadily, and many key advantageous fields such as digestive tract, sex promoting hormone and spirit provide performance driving force. The overall operation of the company was stable in the first quarter, the revenue met the expectation, and the deduction of non profit slightly exceeded the expectation. From the revenue side, considering the relatively high base last year and the price reduction after Q4 EP negotiation, the positive growth of Q1 is in line with expectations, especially the positive growth of gastrointestinal products, reflecting the company's ability to operate steadily. In addition, the performance of the company's API sector is relatively bright, and other sectors are normal. We speculate that the decline of traditional Chinese medicine is mainly due to the influence of antiviral particles, and the diagnostic reagent is mainly due to the high base last year. In terms of sections, the revenue of chemical products is 2.11 billion yuan (+ 10.90%): the revenue of digestive products is 1.07 billion yuan (+ 5.90%); The revenue of sex hormone products was 737 million yuan (+ 22.84%); The income of spiritual products reached 133 million yuan (+ 30.87%); The revenue of anti infection products was 115 million yuan (+ 8.02%). The revenue of API and intermediate products was 900 million yuan (+ 16.13%). The revenue of traditional Chinese medicine preparation products was 272 million yuan (- 36.14%). The revenue of diagnostic reagents and equipment products was 163 million yuan (- 30.77%).
The company's operating cash flow is bright, and the growth rate of non profit deduction is faster than that of revenue, mainly due to the control of cost side and the continuous decline of sales expense rate. The company still invested heavily in R & D, with the R & D expense rate of 8.29%, a significant increase over the same period last year (6.91%). The growth rate of return to parent profit is slower than that of deduction, which is mainly due to the negative impact of asset disposal in non recurring.
The R & D of the company accelerated. The R & D cost of the company in the first quarter of 2022 was 288 million yuan, with a year-on-year increase of 24.56%. According to the R & D Progress of the company, we expect that the products expected to be on the market from 2022 to 2023 include covid-19 recombinant protein vaccine V01, lzm008 (ir-6r), triprelin microspheres, ruracidone tablets, bunaselin tablets, leuprorelin microspheres (3m), lzm009 (PD-1), aripiprazole microspheres (1m) Octreotide microspheres (1m) and other products continue to be approved, which is expected to drive the continuous growth of the company's revenue.
V-01 sequential enhanced phase III clinical interim data were positive. The recombinant New Coronavirus fusion protein vaccine V-01 has completed the interim main data analysis of the sequential enhanced III phase trial: the sequential enhanced absolute protection rate reached 61.35%, which was significantly superior to the WHO standard and had good protection against Omicron mutation infection. The protective power of high-risk population with basic diseases was 71.83%. In addition, the New Coronavirus (2019-nCoV) antigen detection kit (latex method), which was independently developed by Li Zhu reagent, was approved in April 13th.
Profit forecast and valuation. Based on the company's excellent management, sales team, monoclonal antibody platform, microsphere platform, etc., the company's long-term investment value is prominent. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 2.053 billion yuan, 2.395 billion yuan and 2.777 billion yuan respectively, with an increase of 15.6%, 16.6% and 16.0% respectively. EPS is 2.19 yuan, 2.55 yuan and 2.96 yuan respectively, and the corresponding PE is 15x, 13X and 11x respectively. After deducting incentive fees, the actual performance growth rate is higher.
We believe that the company has high certainty of performance growth, low valuation, innovative long-term layout of biological drugs + high-end complex preparations, and the internationalization strategy is expected to continue in the future. We are optimistic about the long-term development of the company and maintain the "buy" rating.
Risk tips: risk of industrial policy change, risk of product price reduction, risk of new drug research and development, impact of covid-19 epidemic normalization, risk of raw material supply and price fluctuation.
