\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 276 Jiangsu Hengrui Medicine Co.Ltd(600276) )
Event: Jiangsu Hengrui Medicine Co.Ltd(600276) released the annual report of 2021. In 2021, the company realized an operating revenue of 25.906 billion yuan, a year-on-year decrease of 6.59%; The net profit attributable to the parent company was 4.53 billion yuan, a year-on-year decrease of 28.41%; The non net profit attributable to the parent deduction was 4.201 billion yuan, a year-on-year decrease of 29.53%. The first quarterly report of 2022 was released. The operating revenue was 5.479 billion yuan, a year-on-year decrease of 20.93%, and the net profit attributable to the parent company was 1.237 billion yuan, a year-on-year decrease of 17.35%.
Analysis of expense ratio and cash flow: the gross profit margin in 2021 was 85.6%, a decrease of 2.4 percentage points compared with 2020. The sales expense in 21 years was 9.38 billion yuan (a year-on-year decrease of 4.3%), and the sales expense ratio was 36.2% (an increase of 0.9 percentage points); The management expense was 2.86 billion yuan (a year-on-year decrease of 6.7%), and the management expense rate was 11.04% (basically the same); The R & D cost was 5.943 billion yuan (a year-on-year increase of 19%), and the R & D cost rate was 22.94% (an increase of 4.95 percentage points). In 2021, the net operating cash flow was 4.219 billion, with a year-on-year increase of 22.9%.
Comments: the performance is under pressure in the short term. After the risk of centralized purchase of medical insurance is released, it can be loaded lightly. The decline in profit is greater than that in operating income. It is mainly due to the factors such as the company's accelerated R & D investment, centralized volume procurement and the decline in gross profit margin caused by the sharp price reduction of national medical insurance negotiation products during the reporting period. We expect that the risks of centralized procurement and medical insurance will be released in 22 years, and the follow-up will be strong and return to growth.
Innovation investment continued to increase, and innovative drugs achieved remarkable results. The company's annual R & D expenditure was 5.943 billion yuan, a year-on-year increase of 19.1%, and the R & D expenditure rate reached 23%. The continuous R & D investment supported the company's rich innovation pipeline. 1) Three indications of PD-1 monoclonal antibody carrelizhu were approved in 2021, and the application for listing was submitted in combination with apatinib in the treatment of first-line liver cancer. 2) HER-2 inhibitor pyrrolidone was declared to be listed as a new adjuvant therapy for HER2 positive breast cancer in September 2021 and was included in the priority review. 3) PARP inhibitor fluzoparil was approved in June 2021. The indications of maintenance treatment after platinum containing treatment for primary ovarian cancer; 4) Three new products were approved, including small molecule tpo-r haitripopa, CDK4 / 6 inhibitor darcilil, and SGLT2 inhibitor hengglijing; 5) the company has 5 innovative drug varieties at the stage of declaration: 3 DPP- diabetes mellitus, including repaglinide. Shr3680 (AR inhibitor) in the treatment of prostate cancer; Indications of shr8008 (CYP51 enzyme inhibitor) in the treatment of vulvovaginal candidiasis; Shr-1316 (PD-L1 monoclonal antibody) in the treatment of extensive small cell lung cancer; Linpril (PI3K) is used to treat recurrent or refractory follicular lymphoma.
Go global and promote the internationalization of innovative drugs in an orderly manner. Overseas R & D investment totaled 1.236 billion yuan, accounting for 19.93% of the total R & D investment. More than 170 clinical R & D teams have been established in the United States and Europe. Carrelizumab is ready to submit BLA for the treatment of advanced liver cancer to FDA. In addition, the treatment of advanced non-squamous non-small cell lung cancer with HER2 mutation by pyrrolotinib, the treatment of metastatic castration resistant prostate cancer by fluzaparide combined with abiraterone, and the treatment of thrombocytopenia caused by chemotherapy by haitripopa are all in the global phase III stage, which will be the overseas clinical projects promoted by the company.
According to the annual report of 2021, we adjusted the profit forecast. Affected by the price reduction of medical insurance and centralized purchase, we lowered the sales expectation of PD-1 and centralized purchase varieties. It is estimated that the operating revenue of the company in 20222024 will be 23.19 billion yuan (37 billion yuan before adjustment), 28.218 billion yuan (45.4 billion yuan before adjustment) and 33.27 billion yuan respectively, with a year-on-year increase of - 10%, 21.7% and 17.9% respectively. The company is a leading enterprise of innovative drugs in China. Centralized purchase and medical insurance are temporary effects, and the future growth can be expected to maintain the "buy" rating.
Risk warning: risk of drug research and development; The risk that the market capacity is less than expected; The risk that sales are lower than expected; Risk of substantial price reduction of generic drugs
