Jiuzhou Pharmaceutical (603456) 2019Q3 Comment: Third-quarter results improve significantly CDMO business grows rapidly
Event: The company released the third quarter report of 2019, and the company achieved operating income in the first three quarters of 201913.
580,000 yuan, an increase of 7 in ten years.
04%; net profit attributable to mother 1.
3.6 billion, an annual increase of 43.
21%; deduct non-attributed net profit1.
43 ppm, an 18-year increase.
The company achieved operating income in the third quarter of 20195.
00 ppm, an increase 西安耍耍网 of 43 in ten years.
3%; net profit attributable to mother is 0.
33 ‰, an increase of 453% in ten years;
510,000 yuan, an increase of 157% in ten years.
At the same time, the company expects annual net profit for 2019 to increase by 55% -80%.
Performance growth was in line with expectations.
Consecutive orders were confirmed, and the third quarter performance improved significantly: quarterly, the company’s 2019Q3 operating income5.
00 ppm, an increase of 43 in ten years.
3%, net of non-attributed net profit 0.
510,000 yuan, an increase of 157% in ten years.
The growth rate of revenue and net profit attributable to motherhood resumed rapid growth under the turn of the company’s CDMO business.
Due to the delay in the revenue recognition of orders from the CDMO sector, the company’s revenue growth in the second quarter of 2019 has picked up, but it has not yet reflected the high growth of the company’s business volume.
The gradual order starts to recognize revenue from the third quarter, so from the third quarter, the rapid growth of the company’s orders and business volume gradually began to be reflected in revenue and performance.
It is expected that with the continuous increase in the company’s revenue scale and number of projects, the transition between revenue recognition between quarters will gradually change.
With the increase in the proportion of high value-added services such as CDMO business, the company’s profitability has increased: the company adheres to the development strategy of “innovation-driven, CDMO + API dual-track development”.
Scale, the company ‘s high gross profit CDMO business has grown rapidly, and its revenue share has continued to increase. In the API business, the company has continued to enhance the business advantages of high gross profit varieties. The relatively high gross profit margin of the central nervous system represented by carbamazepineRevenue from drugs and non-steroidal anti-inflammatory drugs continues to rise.
Therefore, the company’s profitability continues to increase.
The company’s gross profit margin for the first three quarters of 2019 was 31.
5%, increase by 0 every year.
5pp; net interest rate 9.
9%, an increase of 2 per year.
The CDMO business expands its global strategic layout, and the API business gradually achieves a breakthrough upgrade: In the CDMO business field, the establishment of the company’s US BD team and the establishment of the European grandson company form the basis for the company’s deep cooperation with European and North American multinational pharmaceutical companies.
In addition, the company also expanded its customer base and influence in the United States through the acquisition of PharmAgra Labs.
In the traditional API business, the company ranks at the forefront of the market share of specialty APIs and intermediates of single varieties (including carbamazepine, ketoprofen, glipizide, etc.), and the company has completed diabetesTechnical development of APIs for therapeutic drugs, anti-HIV drugs and non-steroidal anti-inflammatory drugs.
Among them, the production of a case-testing drug for diabetes has been completed, and China-US-Europe DMF delivery has been completed.
The acquisition of the Novartis plant in Suzhou will further upgrade the production and service level, and the cooperation with Novartis will be further upgraded: In September this year, the company signed a “equity acquisition agreement” with Novartis to acquire Novartis Suzhou’s divestiture technology and drug development assets.
At the same time, with Novartis on the content of a new order, the company will provide Novartis through the acquisition of Suzhou Novartis three kinds of innovative drugs (anti-heart failure, diabetes and leukemia products) APIs or intermediates.
Among them, the innovative drugs against heart failure and hypertension are in the fast-volume phase.
It is expected that the order amount between the company and Novartis will increase, and subsequently with the volume of innovative drugs, the order amount will continue to rise. Investment suggestion: Buy-A investment rating, 6-month target price of 16.
We expect the company’s revenue growth rate to be 10 in 2019-2021.
6%, net profit growth rate was 67.
4%, outstanding growth; maintain Buy-A investment rating, 6-month target price is 16.
00 yuan, equivalent to 38 times the dynamic price-earnings ratio 合肥夜网 in 2020.
Risk reminder: The order quantity growth is not up to expectations, the intensified market competition leads to a decline in order prices, the industry’s prosperity is less than expected, and the company’s business expansion is less than expected, etc.