\u3000\u3 Guocheng Mining Co.Ltd(000688) 658 Youcare Pharmaceutical Group Co.Ltd(688658) )
Event overview:
On April 29, 2022, the company released its annual report for 2021. In 2021, the company achieved a revenue of 4.966 billion yuan, a year-on-year increase of 14.45%, and the net profit attributable to the parent company was 545 million yuan, a year-on-year increase of 23.34%; Net profit deducted from non parent company was 510 million yuan, with a year-on-year increase of 30.17%; The company released the first quarter report of 2022. In Q1 of 2022, the revenue was 901 million yuan, with a year-on-year increase of 2.48%; The net profit attributable to the parent company was 63 million yuan, a year-on-year decrease of 9.58%; Deduction of net profit not attributable to the parent company was 57 million yuan, a year-on-year decrease of 14.92%. At the same time, the company plans to pay a cash dividend of 6.80 yuan (including tax) for every 10 shares
Comments:
The high growth of core varieties jointly promoted the growth of revenue. In the past 21 years, the sales volume of Ginkgo biloba extract injection, the core product of the company, was 149984900, with a year-on-year increase of 44.32%; Metformin hydrochloride sustained-release tablets sold 18078708 million tablets, a year-on-year increase of 42.57%; The sales volume of traditional Chinese medicine Huoxin pills (concentrated pills) was 869613 million, with a year-on-year increase of 46.34%. Benefiting from the large-scale impact of core varieties, the company’s cardiovascular and cerebrovascular products achieved a revenue of 2.893 billion yuan, a year-on-year increase of 33.42%; Diabetes products achieved a revenue of 269million yuan, a year-on-year increase of 31.26%.
Business structure optimization, superimposed cost advantages and improved profitability. In the 21st year, the gross profit margin of the company’s sales increased by 3.23pct to 69.24% year-on-year, mainly because the company has the advantages of integration of raw materials and preparations, which can effectively reduce the production cost. In addition, the company’s revenue structure has changed, and the proportion of high gross profit product revenue has increased. Among them, the gross profit margin of cardiovascular and cerebrovascular products was 93.82%, and the proportion of main business income increased by 7.41 PCT to 58.54%; The gross profit margin of diabetes products was 48.58%, and the proportion of main business income increased by 0.61pct to 5.45%. During the 21 years, the expense rate of the company increased slightly by 0.60pct to 54.90%, of which the expense rates of sales, management and finance were 46.86% / 8.70% / – 0.67% respectively, which remained stable as a whole.
Remarkable achievements in innovation and transformation, and reasonable distribution of R & D pipeline delivery teams. In 21 years, the company invested 261 million yuan in R & D, with a year-on-year increase of 67.49%. Remarkable achievements in innovation and transformation, and LNP delivery technology has obtained R & D patents; At the end of the 21st century, the company’s first class 1.1 innovative drug, aldenafil citrate, was approved to be listed. At the same time, it comprehensively cut into the nucleic acid track by acquiring Tianlong pharmaceutical. At present, 14 new drug projects are being developed, including 6 varieties, involving nucleic acid drugs, chemical drugs, traditional Chinese medicine and other types. Hydroxysafflor yellow A for injection and Compound Ginkgo biloba leaves, which have a rapid development process, are currently in the third stage; Ct102 for nucleic acid drug injection has entered phase II of clinical practice; The polypeptide drug for covid-19 is being developed in cooperation with the Institute of pathogenic biology, Chinese Academy of Sciences, and is in the process amplification stage. At the same time, the company added 4 new products throughout the year and passed the consistency evaluation. At present, 39 generic drugs and consistency evaluation projects are under development.
The Q1 revenue remained stable in 22 years, and the profit side was under short-term pressure. In the first quarter of the year, the company achieved a revenue of 901 million yuan, a year-on-year increase of 2.48%, maintaining a steady growth; The net profit attributable to the parent company was 63 million yuan, a year-on-year decrease of 9.58%. The profit side was under short-term pressure, mainly due to the confirmation of share based payment fee of 245506 million yuan, resulting in the increase of management expense ratio by 6.50pct to 16.00% year-on-year. Excluding the impact of share based payment disturbance, the company expects to realize a net profit of 85.091 million yuan in Q1 of 22 years, with a year-on-year increase of 20.96%. In addition, due to the continuous promotion of R & D projects and the increase of newly approved R & D projects, the company’s R & D investment in Q1 in 22 years increased by 414517 million yuan year-on-year, with a year-on-year increase of 192.96%, which has a great short-term impact on the profit side.
Investment advice
Maintain the “buy” rating. It is expected that the company’s core products will continue to grow at a high rate, and there are abundant R & D pipelines. It is expected to continue to boost performance and be optimistic about the company’s long-term development. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 746 million yuan, 994 million yuan and 1.294 billion yuan respectively, with a year-on-year growth rate of 36.8%, 33.3% and 30.1%, corresponding to EPS of 1.66, 2.21 and 2.87 yuan respectively, and the corresponding P / E of the current stock price is 10.38, 7.78 and 5.98 times.
Risk tips
Risk of new drug research and development; Drug quality risk; Sales channel risk, etc.
