Dongcheng Pharmaceutical (002675): Interim report results in line with expectations The nuclear medicine sector continues to grow rapidly
Event: The company released its semi-annual report for 2019 and achieved operating income13.
2.7 billion (+39.
60%), net profit attributable to mother 1.
7.8 billion (+59.
14%), after deducting the non-deductible net profit of return to mother 1.
8.8 billion (+58.
After excluding the consolidation factor of Antico, the company’s net profit growth rate in the first half of the year was approximately 45%.
The Air Force Company announced that its profit increased from 50% to 65% from January to June of 19, and its actual performance was in line with expectations.
Nuclear medicines continued to grow at a high speed, and the nationwide distribution of nuclear pharmacies continued to advance the revenue of nuclear medicines in the first half of the year to 51,290.
370,000 yuan (+32.
14%), maintained a rapid growth momentum, and overall profits increased by about 30% (excluding factors such as supplementary nuclear pharmacy depreciation).
Among them, Yunke Pharmaceutical achieved operating income of 22,384.
690,000 yuan (+20.
03%) and a net profit of 10288.
300,000 yuan (+23.
70%), net profit attributable to mother is 53.61 million yuan.
Based on the clinical application of complications, Yunke injection is being developed in the evidence-based medicine research of the pain department. The development of indications / departments is expected to further open up the space for growth.
Shanghai Xinke achieved operating income of 12,647.
820,000 yuan (+11.
2%) and net profit of 2546.
210,000 yuan (+ 15%), net profit attributable to mother 13.33 million yuan.
Antico achieved operating income of 16,664.
07 (+ 40%), of which 18F-FDG revenue is about 1.
400 million (approximately + 30%) and a net profit of 6012.
RMB 870,000 (+20.
78%), the net profit growth rate is 天津夜网 slower than the income growth rate is mainly due to: 1) the first half of this year confirmed that equipment sales revenue is higher than the same period last year, this business profit margin is lower than 18F-FDG; 2) add nuclear pharmacy depreciation and other expensesIncrease, but the increase in the number of nuclear pharmacies is conducive to the company’s long-term performance growth.
In the first half of the year, the national layout of the company’s nuclear pharmacy progressed steadily. Andyco added two nuclear medicine centers in Liaocheng and Liuzhou, and now has 11 GMP certificates. Completed the acquisition and holding of four companies: Guangdong Roundabout, Hunan Roundabout, Kunming Roundabout, and Sichuan Roundabout.A 45% interest will be quickly added to each of the four nuclear medicine centers in Guangdong, 杭州桑拿网 Hunan, Yunnan and Sichuan.
Antico’s existing and under construction nuclear pharmacies cover provinces and cities with rapid increase in installed PET-CT capacity and large equipment holdings. In the future, it will continue to benefit from the increase in inspections in the corresponding regions to ensure rapid growth in performance.
The volume of common preparations continued to increase rapidly, and the prices and prices of heparin raw materials rose in the first half of the year.
710,000 yuan (+78.
7%), of which nadroparin calcium income is about 200 million (about + 100%), and continues to maintain a rapid volume trend.
The API has realized operating income of 52916.
380,000 yuan (+28.
05%), achieving a gross profit of 14,329.
72 million (+ 61%), mainly due to the elimination of pig production capacity in the first half of the year due to swine fever epidemic, the price of crude heparin continued to rise, and it was converted into downstream APIs. As a result, the company also increased its market development efforts and the amount of APIs for heparinPrices go up.
Zhongtai Biological achieved operating income of 52.43 million yuan (+ 8%) and profit of 6.22 million yuan (-31%). However, the current price of titanium sulfate is at the bottom, and the sales expense ratio continues to increase slightly. Operating cash flow is slightly increased.Outstanding improvement in the first half of the company’s sales expenses 26.
40%, an increase of 4 over the same period last year.The 22 singles are mainly due to the change in the company’s revenue structure and the increase in the proportion of nuclear medicine / general preparations revenue.
Net operating cash flow for the first half of the year was 258.97 million yuan (+47.
77%), exceeding the current net profit. The net operating cash flow in 19Q2 was 219.23 million yuan, and in 19Q1 it was only 39.74 million yuan.
Earnings forecast and investment rating We believe that the nuclear medicine industry has high barriers, a large market space and good growth.
In the short term, PETCT configuration approval authority is decentralized, SPECT configuration does not need to be approved, and the policy is favorable for the rapid installation of related equipment. 锝[99mTc]labeled drugs and 18F-FDG are expected to usher in a period of rapid growth.Announcement of the annual configuration plan for large-scale medical equipment. It is proposed that by 2020, the PETCT is planned to be deployed within 710 units, with an increase of 377 units. It is expected that by the end of 19, the installed capacity of PETCT will reach 500 units.
In the long run, overseas heavy-duty therapeutic nuclear medicines will be listed in the country one after another. The existing domestic nuclear medicine production and sales network must be re-established to accelerate the expansion of the nuclear medicine market. Domestic nuclear medicine companies are expected to continue to benefit.
We estimate that the net profit attributable to the mother of the company on 19/20/21 will be 4.
10 billion, 5.
0.6 billion and 6.
23 trillion, the growth rate is 43% / 26% / 23%, the corresponding EPS is 0.
50 yuan, 0.
63 yuan, 0.
78 yuan, PE is 23X, 19X and 15X.
Company evaluation: 1) Nuclear medicine: Net profit attributable to mother in 19 years 2.
Considering the oligopoly competition in the nuclear medicine sector, which is USD 8.1 billion, an increase of 33%, the barriers are very high, the competition is good, the market space is large, and the profitability is very strong. A certain premium should be given, and 40 times PE, which is estimated to be 112 billion yuan.
2) Ordinary preparations: Low-molecular-weight heparin preparations represented by nadroparin calcium have maintained rapid growth, with a net profit of 19 years.
61 ppm, giving 25 times PE, an estimated 1.5 billion.
3) The 19-year net profit of the bulk drug business reduced group expenses, etc. 0.
58 trillion, giving 10 times PE, for a market value of 6 trillion in 2019.
The company has a reasonable market value of 13.3 billion in 19 years and maintains a “buy” rating.
Risk reminder: APIs, non-recurring gains and losses, changes in exchange gains and losses affect the overall net profit; the growth rate of nuclear drugs is less than expected.