\u3000\u Guangzhou Improve Medical Instruments Co.Ltd(300030) Cofco Biotechnology Co.Ltd(000930) 0009)
Q1 grew slightly faster than expected. Recently, the company released its 21st Annual Report and the first quarterly report of 22 years. In the 21st year, the company achieved a total operating revenue of 2.169 billion yuan, an increase of 27.47% over the same period last year; The total profit was 295 million yuan, a decrease of 29.08% over the same period last year; The net profit attributable to the owners of the parent company was 206629500 yuan, a decrease of 42.44% over the same period last year. The decline in profit was mainly affected by the epidemic and centralized procurement policies. The company made provision for goodwill impairment of about 323 million yuan for SOHO Yiming and Sino German Meilian, thus reducing the net profit of the company’s consolidated statements in the 21st year to about 323 million yuan. At the same time, for the impairment part, 284 million yuan of impairment provision for long-term equity investment needs to be withdrawn in the income statement of the parent company, resulting in the slowdown of the year-on-year growth of the parent company’s net profit. In Q1 2022, the company’s operating revenue was 533 million yuan, an increase of 10.01% over the same period of last year, and the net profit attributable to shareholders of listed companies was 173 million yuan, an increase of 37.67% over the same period of last year. The growth of Q1 performance exceeded expectations.
Business driven product upgrading and optimization, and capacity is expected to continue to expand. In the past 21 years, the sales revenue of biological products, the company’s main products, continued to maintain rapid growth, with a year-on-year increase of 44.65%, accounting for 59.72% of the company’s product revenue. It is the main contribution to the company’s net profit. In addition, the sales revenue of chemicals, proprietary Chinese medicine and other products showed a stable growth trend. The company has added two approved indications to the main single product human growth hormone, becoming the enterprise with the most approved indications of growth hormone in China. Relevant production capacity is expected to expand. At present, the State Drug Administration has approved the formal production of the company’s new production line of human growth hormone for injection in the North District, which will effectively solve the existing capacity bottleneck and significantly improve the production capacity supply of human growth hormone, the company’s main product.
Innovation leads and key R & D projects continue to be promoted. The company adheres to R & D, with R & D expenses of 167 million yuan in 21 years and continuous R & D progress. The first application for antibody production in the field of new antitumor drugs has been submitted, and the application for marketing license of recombinant human HER2 monoclonal antibody for injection has been accepted; The recombinant anti VEGF humanized monoclonal antibody injection has completed the phase III clinical entry work. At present, the product has entered the production preparation stage. The company also actively distributes the research and development of biological drugs in the field of assisted reproduction. In the future, the company will continue to lay out new products in the fields of reproduction, growth and development and antitumor drugs. It is planned to apply to relevant national departments for clinical trial biological drugs in 2022: recombinant human follicle stimulating hormone injection, fusion protein long-acting growth hormone product and a bispecific antibody injection. The clinical application of the above products will further enrich the product pipeline of the company’s biological products and continuously enhance the company’s main business and future market competitiveness.
Profit forecast and investment suggestions
The company’s performance has increased rapidly and its profitability has improved. We have slightly raised the company’s gross profit margin forecast. It is predicted that the company’s EPS will be 0.45/0.57 yuan in 22-23 years (the original forecast was 0.44/0.52 yuan) and 0.73 yuan in 24 years. According to the 22 times PE valuation given by the comparable company, the corresponding target price is 9.9 yuan, maintaining the “overweight” rating.
Risk tips
The volume of growth hormone is less than expected, and the research and development progress is less than expected
