Zhongxin Pharmaceutical (600329): Deducting non-performance is in line with expectations of company’s operating quality improvement

Zhongxin Pharmaceutical (600329): Deducting non-performance is in line with expectations of company’s operating quality improvement

Key points of investment events: The company’s operating income in 2018, net profit after deduction is approximately 63.

600 million, 5.

4 ‰, the annual growth rate is about 11.

8%, 32.

9%; operating income in the fourth quarter of 2018, net profit after deduction is approximately 16.

700 million, 1.

500 million US dollars, the annual growth rate is about 19.

6%, 44.

6%.

  The non-performance results were in line with expectations and the company’s operating quality improved.

The company’s operating revenue in 2018 was approximately $ 6.4 billion, an increase of approximately 12% year-on-year.

Among them, pharmaceutical manufacturing is about 38 trillion, with an annual increase of about 17.

4%; pharmaceutical commerce is about 5.4 billion yuan, a decline of about 4% each year.

By product line, the cardio-cerebrovascular drug revenue is about 13.

500 million US dollars, an annual increase of about 8%; respiratory drug revenue is about 4%.

2 ppm, an annual increase of about 35%; anti-infective drug revenue is about 3.

2 ‰, a year-on-year increase of about 104%; antitumor drug income is about 1.

20,000 yuan, an increase of about 3% in ten years.

Among them, the annual sales revenue of Suxiao Jiuxin Pill exceeds US $ 1 billion, and the current price increase effect has not been fully reflected, and it is expected to continue in 2019. With the gradual increase in terminal coverage, the revenue of second-line products such as Qingfei Xiaoyan Pill increased by 35%, Huoxiangzhengqi Soft Capsules revenue is growing by 23% annually.

The company’s non-net profit in 2018 was approximately 5.

4 ppm, an annual increase of about 33%, exceeding the revenue growth rate of about 21 percentages, in line with expectations, the specific analysis is as follows: 1) The company’s gross profit margin is about 41.

5%, an increase of about 2 a year.

6 units, mainly due to changes in income structure; 2) During the period, the expense ratio was about 佛山桑拿网 33%, which increased by about 1.

Five units, of which the sales cost is about 1.7 billion, which is growing by about 19% each year, gradually changing the sales model.

In the fourth quarter of 2018, operating income and net profit after deduction were approximately 16.

700 million, 1.

500 million US dollars, the annual growth rate is about 19.

6%, 44.

6%, moving pin improved.

In addition, the participating companies, Sino-SmithKline, had net profit of approximately 5 in 2018.

100 million US dollars, a year-on-year growth rate of about 21%, there is an acceleration trend; the company’s period-end accounts receivable is about 13.

200 million, a month-on-month improvement; net cash flow from operating activities was approximately 3.

500 million, obviously improved.

The company explores and innovates various sales models, stimulates the sales team’s enthusiasm, and the price increase effect of the quick-effect Jiuxinwan Hospital has gradually appeared. It is expected that the net profit growth in 2019 will continue.

  The conclusion of a new climate stimulates corporate potential, and product line collaboration will drive performance growth.

1) Leaders ushered in a new stage of development after the change of leadership. By integrating the management team and actively promoting reform and reform, it is expected to improve the company’s overall operating efficiency.

At the same time, the marketing teams of each branch will be integrated, a shared platform will be established, and a strategic cooperation relationship with the Top 100 chain will be established. The change in sales attitude will be more proactive, and it is expected to lead to a rapid increase in product sales.Obviously, through the increase in the number of retail outlets, it is expected that the price increase bonus will continue to be released in 2019; 3) The company will continue to implement the large variety strategy in 2019. Qingfei, Huoxiang, Huoqing, Tongmai and other products continue to advanceAgainst the backdrop of the expansion of pharmacy terminals, revenue growth may exceed expectations.

  Earnings forecasts and investment advice.The company’s EPS for 2019-2021 is expected to be 0.

91 yuan, 1.

14 yuan, 1.

40 yuan (the original forecast was 1 for 2019-2020).

03 yuan, 1.

29 yuan, the reason for the adjustment is the expected growth rate of the product), the corresponding P / E ratios are 18 times, 14 times, and 11 times.

The price increase effect of the company’s core products will continue to appear, and the growth of second-tier products will gradually become more obvious, and further transformation may stimulate its business potential.

We believe that the company has catalysts such as better-than-expected results and product price increases, and it is currently estimated that it can be substituted and maintain the “Buy” rating.

  Risk Warning: Product sales may not meet expectations, and market expansion may not meet expectations.