\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 535 Tasly Pharmaceutical Group Co.Ltd(600535) )
Event: the company released its quarterly report for the first quarter of 2022, achieving an operating revenue of 1.869 billion yuan (+ 5.97%), a net profit attributable to shareholders of listed companies of – 557 million yuan (- 272.52%), and a net profit attributable to shareholders of listed companies of 232 million yuan (- 8.79%) after deduction. Meanwhile, the company announced that it had repurchased 8.1694 million shares through centralized bidding, accounting for 0.54% of the total share capital of the company.
The centralized purchase of temozolomide affected the profit after deducting non profits in the first quarter, and the main business is expected to improve quarter by quarter. In the first quarter of 2022, the business of pharmaceutical industry realized an operating revenue of 1.527 billion yuan (+ 5.01%), which was basically stable. In terms of products, the operating revenue of traditional Chinese medicine is 1.128 billion yuan, and the core varieties such as Dandi, Yangxue Qingnao and so on are expected to grow steadily. The operating income of chemical agents was 319 million yuan (- 5.19%), of which the income of antitumor drugs was 82.42 million yuan (- 44.56%), which was mainly affected by the price reduction of temozolomide. This product won the bid for centralized purchase in February 2021 and has been implemented in various places since the second quarter of 2021. Therefore, the revenue base of this product is relatively high in the first quarter of 2021, resulting in a year-on-year decline. The income of biological drugs was 57.82 million yuan (+ 15.64%), and the gross profit margin was 71.84%, an increase of 9.33 percentage points year-on-year. We believe that in the first quarter of 2022, under the influence of centralized mining, epidemic and other adverse factors, the company’s main business is still stable, and the follow-up is expected to improve quarter by quarter.
Changes in fair value drag down the company’s apparent profit, but do not affect the company’s main business operation. The sharp decline in the company’s net profit in the first quarter of 2022 was mainly due to the decrease of 867 million in the fair value of financial assets such as i-mab and Keji pharmaceutical equity during the reporting period, and 899 million in the income from changes in fair value compared with the same period in 2021, but it had no impact on the company’s main business operation. The net cash flow from operating activities decreased by 79.68% compared with the same period in 2021, mainly due to the lower amount of discount collection of bank acceptance bills than that in the same period in 2021. By the end of the first quarter of 2022, the amount of accounts receivable of the company was 1.13 billion yuan, a year-on-year decrease of 29.61% and a month on month decrease of 12.74%, indicating that the effect of channel inventory removal is remarkable. At present, the channel inventory has been in a benign state.
Profit forecast and Valuation: we believe that with the gradual digestion of the impact of centralized mining, the core varieties of traditional Chinese medicine will return to growth and the large volume of second-line varieties, and 2022 will be the inflection point of the company’s profit (after deducting non-profit). It is estimated that the company’s revenue from 2022 to 2024 will be 8.610 billion yuan, 9.358 billion yuan and 10.219 billion yuan respectively, with a year-on-year increase of 8.3%, 8.7% and 9.20%; The net profit attributable to the parent company was 1.135 billion yuan, 1.339 billion yuan and 1.567 billion yuan respectively, with a year-on-year growth rate of – 51.9%, 18.1% and 17.0%. Based on the closing price on April 27, the corresponding PE was 13.6, 11.5 and 9.8 times respectively, maintaining the “buy” rating.
Risk warning: the price reduction of centralized purchase of Chinese patent medicine is higher than expected; The fluctuation of fair value of financial assets leads to deviation in the prediction of net profit attributable to parent company; The epidemic has led to lower than expected drug sales.
