\u3000\u30 China Baoan Group Co.Ltd(000009) 63 Huadong Medicine Co.Ltd(000963) )
Event: on April 27, 2022, the company released the annual report of 2021 and the first quarter report of 2022. In 2021, the company achieved revenue and net profit attributable to parent company after deduction of non-profit of 34.563 billion yuan (+ 2.61%) and 2.189 billion yuan (- 9.91%) respectively; In 2022q1, the company realized revenue and net profit attributable to the parent company after deducting non-profit of RMB 8.933 billion (+ 0.40%) and RMB 699 million (+ 0.39%) respectively.
The revenue of medical beauty business is growing rapidly, and this business is expected to become the core driving force of the company’s development:
On the revenue side, in 2021 and 2022q1, the company achieved revenue of 34.563 billion yuan and 8.933 billion yuan respectively, with a year-on-year increase of 2.61% and 0.40% respectively. Among them, in 2021, the manufacturing industry and medical beauty business achieved revenue of 10.519 billion yuan (- 7.71%) and 1.002 billion yuan (+ 123.28%) respectively; In 2022q1, the medical and American sector achieved a revenue of 453 million yuan, excluding Ningbo in East China, with a year-on-year increase of 226.8%. The rapid development of medical beauty business has become the core driving force of the company’s revenue growth.
On the profit side, in 2021, the company realized a net profit of RMB 2.189 billion, a year-on-year decrease of 9.91%; In 2022q1, the net profit attributable to the parent company after deducting non-profit was 699 million yuan, with a year-on-year increase of 0.39%. As the impact of price reduction of some products in the manufacturing sector gradually subsides, the performance growth is expected to continue to improve.
The medical and American sector continues to make efforts in the Chinese and foreign markets, and the sales of heavy varieties are expected to continue in large quantities:
In the Chinese market, in 2022q1, Xinkeli aesthetics, a wholly-owned subsidiary of China medical beauty, achieved a revenue of 157 million yuan, surpassing the revenue scale of medical beauty agency business in Ningbo, East China in the same period last year. Heavyweight medical beauty products ellans é ® Eyans was officially listed in China in August 2021. At present, its sales are in full swing. As of 2021q3, its advance payment exceeds 100 million yuan, ellans é ® Yiyanshi’s sales are expected to continue rapid and large-scale. In addition, the frozen freckle removing medical device cold touch beauty instrument cool snow glacialspa introduced from the United States ® (F0) launched sales and services in five major cities in China in March 2022.
In the overseas market, the sales of Sinclair, a wholly-owned subsidiary in the UK, grew strongly. In 2022q1, it achieved a consolidated revenue of 260 million yuan, a year-on-year increase of 163.1%, and achieved operating profit for the first time. Among them, Sinclair completed the 100% equity acquisition of viora, an energy source medical instrument company, in February 2022. At present, the orders on hand in the second quarter are in good condition.
R & D continued to advance and BD actively carried out, and the innovative drug pipeline was further strengthened:
The company strengthened the layout of innovative drug pipeline by continuously increasing R & D investment and actively carrying out BD cooperation. According to the company’s announcement, at present, many projects have ushered in milestone important nodes, and the value of R & D pipeline is expected to be gradually realized. Among them, (1) liraglutide injection: China phase III clinical study on weight loss indications has been completed, and the listing application is expected to be submitted in 2022q2; (2) Cooperation with heidelbergpharma agreement: realize the differentiated R & D layout in ADC field, obtain the exclusive license of hdp-103 and hdp-101 in 20 Asian countries / regions, and obtain the exclusive option of hdp-102 and hdp-104; (3) Sign exclusive license agreement with kiniksa: obtain two global innovative products arcalyst in the field of autoimmunity ® And mavrilimumab’s exclusive license in 24 Asia Pacific countries and regions such as China; (4) Signed an exclusive marketing agreement with shengnuoji: obtained the exclusive marketing right of “icariin soft capsule”, a national class I innovative drug for the treatment of advanced hepatocellular carcinoma, in 27 provinces of China.
Investment suggestion: we expect the company to realize net profits of RMB 2.885 billion, RMB 3.369 billion and RMB 3.939 billion respectively from 2022 to 2024, with a year-on-year increase of 25.3%, 16.8% and 16.9% respectively; Give an investment rating of buy-a.
Risk warning: the R & D Progress of drugs and medical beauty products does not meet expectations; The sales of drugs and medical products did not meet expectations; The price reduction of drugs is greater than expected; There are some uncertainties in the ownership of rights and interests of regional commercialization of some products in China.
