\u3000\u3 Shengda Resources Co.Ltd(000603) 707 Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) )
Matters:
The company released its annual report for 2021, realizing a 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 net profit attributable to the parent company after non deduction was 1.024 billion yuan, a year-on-year increase of 33.47%. The company's performance is in line with expectations. The profit distribution plan for 2021 is to allocate 1.5 yuan (including tax) to 3 shares for every 10 shares.
At the same time, the company released the first quarter report of 2022, realizing a 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 net profit attributable to the parent company after non deduction was 326 million yuan, a year-on-year increase of 23.68%.
Ping An View:
The company operates steadily and has excellent performance in its three main businesses. In 2021, the company realized a revenue of 3.687 billion yuan (+ 26.48%), and a net profit attributable to the parent company of 1.059 billion yuan (+ 31.41%), maintaining a stable growth. The gross profit margin is 56.71% (-2.25pct), and the expenses during the period are well controlled, with the expense rate of 24.41% (-2.87pct). The three business segments of the company have achieved brilliant performance: the revenue of standard heparin API was 1.428 billion yuan (+ 9.47%), accounting for 38.78% of the main business revenue, and the sales volume increased by 10.21%; The revenue of preparation business was 2.13 billion yuan (+ 44.52%), of which the revenue of preparation in China increased by about 25% over the same period of last year; Cdmo and other products revenue 123 million yuan (- 7.24%). In 2022q1, the company realized revenue of 1.177 billion yuan (+ 33.24%), and net profit attributable to parent company of 330 million yuan (+ 20.96%). The gross profit margin was 50.49%, with a year-on-year decrease of 7.07 PCT, mainly due to the high procurement cost of API and the increase of the cost of heparin preparation.
Key products won the bid for centralized purchase, and the sales of preparations in China is expected to be further opened. Relying on the speed advantage of China US double report, the company seized the market opportunity of injection consistency evaluation. In June 2021, the company's products benzathine atracurium injection and bendamostine hydrochloride for injection successfully won the bid in the fifth batch of national centralized procurement, among which benzathine atracurium injection is the first imitation product to be listed in China; In the first quarter of 2022, the company's key products daparin sodium injection and natroparin calcium injection entered the bid winning list of centralized drug procurement in Guangdong Province, of which daparin sodium injection also entered the bid winning list of centralized drug procurement in eight provinces and two regions of Inner Mongolia Autonomous Region. In the future, with the continuous approval of the company's Chinese products, the market share is expected to further improve.
Accelerate the international layout of injections, and cdmo enters the macromolecular field. The company's business has successfully transformed to high-end preparations and become a leading preparation export enterprise in China. At present, in addition to heparin preparations, the company has nearly 30 sterile injections approved by FDA. In 2022q1, the sales volume of the company's foreign preparations increased by more than 30% year-on-year. With the approval of enoxaparin injection in Europe and South America, the company further expanded its influence in the global heparin preparation market. The subsidiary Jianjin pharmaceutical signed a cdmo strategic cooperation agreement on innovative biological macromolecular drugs with customers, marking the company's entry into the cdmo whole industry chain track of macromolecular biological drug stock solution + preparation, and the layout of small molecule chemical drugs and macromolecular biological drugs, which is expected to drive the accelerated growth of performance.
Profit forecast and investment rating: we are optimistic about the long-term development of the company. Considering the cost and the impact of the epidemic, we adjusted the forecast of the company's net profit attributable to the parent company from 2022 to 2023 to 1.386 billion and 1.814 billion yuan (the original forecast was 1.578 billion and 2.040 billion yuan), and the net profit in 2024 is expected to be 2.421 billion yuan. The current share price corresponds to only 23 times of PE in 2022, maintaining the "recommended" rating.
Risk tips: 1) price fluctuation risk of raw materials: raw materials such as crude heparin are the main cost components of the company's products. If the price of raw materials fluctuates sharply, it will have an adverse impact on the company; 2) R & D risk: the company has many varieties under research, and there is a risk that the approval of Anda is less than expected; 3) The export of preparations is less than expected: the American preparation market is highly competitive, and the sales of some varieties may be less than expected.
