\u3000\u3 Shengda Resources Co.Ltd(000603) 707 Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) )
Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) issue the 2021 annual report. In 2021, the company achieved an operating revenue of 3.687 billion yuan, a year-on-year increase of 26.48%; The net profit attributable to the parent company was 1.059 billion yuan, a year-on-year increase of 31.41%; The non net profit attributable to the parent company was 1.024 billion yuan, a year-on-year increase of 33.47%.
Looking at Q4 alone, the operating revenue was 907 million yuan, a year-on-year increase of 19.84%; The net profit attributable to the parent company was 215 million yuan, a year-on-year increase of 11.19%, and the net profit deducted from non attributable to the parent company was 201 million yuan, a year-on-year increase of 13.56%.
Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) release the first quarter report of 2022. In the first quarter of 2022, the company realized an operating revenue of 1.177 billion yuan, a year-on-year increase of 33.24%; The net profit attributable to the parent company was 330 million yuan, a year-on-year increase of 20.96%; The non net profit attributable to the parent company was 326 million yuan, a year-on-year increase of 23.68%.
The annual revenue and profit in the year of 21 were in line with the expectation, the revenue of 22q1 continued to grow high, the internationalization of injection accelerated, and the company's performance achieved rapid growth in 2021: the company achieved operating revenue, net profit attributable to parent and non net profit attributable to parent in 2021 were 3.687 billion yuan, 1.059 billion yuan and 1.024 billion yuan respectively, with year-on-year growth of 26.48%, 31.41% and 33.47% respectively, which was in line with the expectation. In the first quarter of 2022, the revenue side achieved a year-on-year growth rate of 33.24%, with a month on month growth of 29.78%, exceeding expectations; The profit side is adversely affected by the Chinese epidemic on logistics and transportation. The high cost side affects the profit performance and is under pressure for a short time. Among them, we expect the performance split in 2021:
Heparin API: the revenue is 1.428 billion (+ 9.47%), the gross profit margin is 52.33% (a year-on-year decrease of 3.81pp), the sales volume is 2.53 trillion units, and the average price is 56400. The decrease of gross profit margin comes from the increase of cost, but we estimate that the absolute gross profit will rise slightly (732 million yuan in 2020 and 747 million yuan in 2021).
Sales of injections in China: we expect the total sales volume to increase by 35%, of which the sales volume of low molecular weight heparin preparation is more than 28 million (an increase of about 30%), and the other increment comes from the shipment of cisatracurium benzenesulfonate in Q4. Combined with the rising cost of enoxaparin in China, we estimate that the overall absolute gross profit will increase by 28-30%.
Internationalization of injections: we expect the revenue end to be close to 1.2 billion in 2021, with a year-on-year increase of about 60%; Benzenesulfonacetracuronium injection, Bleomycin Injection and gemcitabine injection account for about 30%, 20% and 20% of the U.S. market respectively. Meiheal, a subsidiary, achieved a revenue of 1.041 billion yuan, with a growth rate of more than 50%. Under the assumption that the epidemic is controllable, we expect the U.S. market to achieve a growth rate of more than 50% in 2022.
Injection cdmo: the annual revenue in 2021 was 123 million (a year-on-year decrease of 7.24%), and the gross profit margin was 53.50% (an increase of 21.04pp compared with 2020). The gross profit of injection cdmo business increased significantly (43 million yuan in 2020 and 66 million yuan in 2021).
The internationalization of injections is still accelerating, making China a leader in the US injection Market. In the whole year, 11 injections anda of the company were approved by the FDA of the United States, and some preparation products achieved stable market share in the United States (30% of benzenesulfonate cisatracurium injection, 20% of Bleomycin Injection and gemcitabine injection). Accelerate the penetration of European, South American and other markets in the agency mode, and nearly 50 products have been listed in the world. The company will continue to benefit from the high margin US sterile injection Market in the future, and the injection export business will continue to explode.
China Pharmaceutical seized the opportunity of centralized procurement and continued to seize the market opportunity of injection consistency evaluation. A number of products have been approved one after another, among which Bai Xiaoan has become the first product deemed to pass the consistency evaluation in China, and the fifth batch of centralized procurement of benzathine atracurium and bendamostine hydrochloride for injection won the bid to provide sales increment. The company will continue to build a pattern of Chinese products with centralized procurement products and characteristic products.
Profit forecast and investment rating. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 1.322 billion yuan, 1.748 billion yuan and 2.306 billion yuan respectively, with a year-on-year increase of 24.8%, 32.2% and 31.9% respectively, and the corresponding PE will be 24x, 18x and 14x respectively. We are optimistic about the development of the company for a long time and maintain the "buy" rating.
Risk tips: the overseas approval of injections is less than the expected risk, the sales of heparin raw materials is less than the expected risk, the pressure on China's medical insurance to control fees is exacerbated, and the risk that there may be errors between the calculation and the actual situation.
