\u3000\u3 China Vanke Co.Ltd(000002) 332 Zhejiang Xianju Pharmaceutical Co.Ltd(002332) )
Financial performance: steady growth and improved net profit margin
The company released its 2021 annual report, with a revenue of 4.34 billion yuan in 2021, a year-on-year increase of 7.9%; The net profit attributable to the parent company was 620 million yuan, a year-on-year increase of 22.1%; The net profit margin was 14.25%, with a year-on-year increase of 1.1pct; The net cash flow from operating activities was 680 million yuan, a year-on-year decrease of 14.3%. We believe that the company's revenue and profit growth in 2021 is in line with our expectations.
Growth ability: Respiratory Department & anaesthetic muscle pine preparation drives growth
In terms of business segments, we believe that the preparation business has significantly contributed to the revenue growth in 2021. In terms of treatment, the growth contribution of respiratory preparations (12% of the total revenue, with a year-on-year increase of 42%) and anesthetized muscle pine preparations (14.8% of the total revenue, with a year-on-year increase of 23%) is more obvious. In the field of preparation, looking forward to 20222024 years, we expect: (1) the sales growth of Department of respiration preparations comes from the increase of the sales market share (according to wind sample hospital statistics, in 2021, the market share of Zhejiang Xianju Pharmaceutical Co.Ltd(002332) tiotropium bromide inhalation powder increased to 13.1%, and the market share of Mometasone Furoate Nasal Spray increased to 43.5%). We believe that the variety of the company's Department of respiration varieties is still difficult to collect in the next 1-2 years, and the market share still has room for improvement. ② The structural adjustment of anesthetized muscle pine preparations and the impact of the centralized purchase of rocuronium injection on the profit side may be lower than expected (we believe that under the neutral expectation, the centralized purchase of rocuronium injection will affect the growth rate of net profit by about 4-6%. For the specific analysis, see our updated report issued on February 11, 2022). ③ The market share of incremental varieties won the bid in centralized procurement has increased (in June 2021, the stock income of ropivacaine hydrochloride injection and misoprostol tablets won the bid in centralized procurement is relatively low). On the whole, we do not consider the new products that may win the bid in centralized procurement for the time being. We expect that the preparation business is expected to achieve a compound growth rate of 10-15% on the revenue side from 2022 to 2024, and the net profit margin under centralized procurement will continue to improve.
In the field of API, according to the analysis of different revenue caliber disclosed in the statement, we found that the proportion of the revenue of narcotic muscle pine API in the company's API revenue in 2021 further increased. From the perspective of global demand and the increment of China's centralized procurement market, we expect this category to contribute to the increment of revenue. From the perspective of income type, Haisheng pharmaceutical dragged down the income and net profit of API business in 2021 (according to the 2021 annual report, Haisheng pharmaceutical had a net loss of 11.58 million yuan, and the impact on the net profit of consolidated statements may be 7-8 million yuan based on 61.2% equity estimation), We expect that after the equity transfer of Haisheng pharmaceutical in 2022 (according to the company's April 19, 2022, the company sold 61.2% equity of Haisheng pharmaceutical for 125 million yuan, which is expected to generate an equity transfer income of 28.02 million yuan in 2022), the net profit margin of the company's API sector is expected to increase year-on-year. Looking forward to 20222024, we expect the growth of the company's API sector to come from: ① the upgrading of steroid hormone categories and the increase of added value; ② New increment of Chinese api under centralized mining; ③ Cdmo project expansion after FDA inspection; ④ In 2022, the potential price elasticity of corticosteroid APIs and intermediates and the stripping of Haisheng pharmaceutical are expected to contribute to the short-term increment.
Profitability: we expect that there is still room for improvement in net profit margin
In 2021, the gross profit margin of the company increased by 2.6pct year-on-year and the net profit margin increased by 1.1pct year-on-year. The increase in the gross profit margin came from the increase in the gross profit margin of corticosteroids (the revenue of this category accounted for 39.8% and the gross profit margin increased by 12.9pct year-on-year in 2021). The increase in the net profit margin was less than the gross profit margin. We think it came from the increase in the sales expense rate by 2.2pct year-on-year. Looking forward to 20222024, we expect that with the promotion of centralized purchase of Chinese preparations, we expect the overall net profit margin of the company to increase.
Viewpoint: R & D & production capacity upgrading is marginal change
We believe that behind the plant relocation and GMP certification, R & D and production capacity upgrading are the most obvious marginal changes of the company from 2020 to 2021. From the results, This is reflected in the accelerated industrialization of new technology platform for API (in 2021, the process optimization of 6 new products such as hs-7 and 8 products under research such as rocuronium was completed, the customized business of products from other units was started, the enzymatic biotransformation research of 5 products was carried out, and the enzymatic selective transformation of testosterone and other enzymes entered the pilot test), And accelerate the research and approval of new products of preparations (according to the annual report, the preparation business "will complete the launch of pilot test or verification of 24 varieties and 110 batches of new products in 2021, and complete the launch of products of 3 entrusted processing projects"). We continue to be optimistic about the development space and performance growth sustainability of the company's continuous upgrading of steroidal APIs and preparations under the promotion of the R & D and application of new products of APIs and preparations and the certification of Yangfu factory.
Profit forecast and valuation
In the medium and long term, we are optimistic about the trend of upgrading the steroidal industry chain and the sustainability of performance growth under the production capacity investment and audit of Yangfu API. The technical process and production quality control capacity accumulated by the company in the field of steroidal API and intermediates lay the foundation for the upgrading of supply capacity; In the medium and short term, with the main varieties participating in the volume procurement, the profitability of the preparation is improved and the respiratory market continues to expand, the sustainability of profit growth may exceed expectations. In the profit forecast, we have considered the impact of centralized purchase of stock preparation varieties from 2022 to 2023, and do not consider the sales of new preparations for the time being. We expect EPS to be 0.76, 0.93 and 1.16 yuan / share respectively from 2022 to 2024. The closing price on April 22, 2022 corresponds to 12 times PE in 2022, which has a high valuation cost performance and maintains the "overweight" rating.
Risk tips
The risk of centralized purchase and price reduction of core preparation products, the risk of fluctuation of production capacity input cycle, the risk that the high-end market expansion of API business is less than expected, and the risk of sharp fluctuation of raw material cost
