Depth-Company-Puluo Pharmaceutical (000739): The three major sectors of high-speed growth have consolidated

Depth * Company * Puluo Pharmaceutical (000739): The three major sectors of high-performance growth have consolidated

The company disclosed its 2018 annual report: the report realized operating income of 63.

76 ppm, an increase of 14 in ten years.

85%; net profit attributable to mother 3.

71 ppm, a 44-year increase of 44.

42%; net profit deducted from non-return to mother 3.

4.2 billion, an annual increase of 63.

45%.

EPS0.

31 yuan / share, an increase of 40 in ten years.

86%.

Basically in line with democratic expectations.

The company’s internal 南京夜生活网 re-integration efficiency has been greatly improved, and it has entered a period of rapid growth. The API intermediates have enjoyed favorable price increases, and CDMO and pharmaceutical preparations have opened up a lot of space.

We are optimistic about the company’s integrated development of APIs + CDMO + preparations, maintain the BUY rating and continue to recommend it.

Key points of the support level The prosperity of the raw material intermediate segment continues to improve: As a domestic leader in the production and export of APIs, the company fully enjoys the concentration and prosperity of the supply-side reform and quality improvement.Some have risen steadily.

In 2018, the segment realized revenue of 52.

0 billion (+21).

3%), an increase of nearly 10 billion; gross profit margin 23.

08% (down 2 in a year.

54pp), mainly because the company ‘s overseas supply is dominated by more than one year long orders. Last year, the prices of upstream raw materials generally increased and the original pricing was still used. The gross profit margin of foreign businesses rose and fell.

This year’s upstream cost pressure adjustment, coupled with new order bargaining, can pass on costs, improve quality, and increase market supply. Equilibrium company products can replace price increases. It is expected that the profitability of overseas markets will rebound sharply in 19 years.Goods contribute to the increase in revenue.

The layout of the preparations sector has gradually landed, and future volume can be expected: the income from the preparations sector11.

5.3 billion (+2.

8%), if the impact of stripped commercial companies (about 200 million in 17 years, about 50 million in 18 years), the actual sales of preparations will increase by nearly 20%; the gross profit 8 will be realized.

3.1 billion (+41.

65%), gross profit margin 72.

06%, a significant increase of nearly 20 units.

In 18 years, the company ‘s large-scale cephalosporin metabolism resumed due to the expiration of the document number, which reopened the market and affected sales revenue.

The follow-up R & D layout has been continuously implemented: 2 of the 16 varieties of domestic consistency evaluation have been completed; the new class of stroke drug sofadil has completed Phase II clinical trials, and Phase III will be carried out after the evaluation is approved; one has been submitted to the FDAANDA, and it is expected that new varieties will be submitted in 19 years.

Total company R & D expenditure in 20182.

920,000 yuan (+20.

23%), and income accounted for 4.

57%, and the company set up Hangzhou Pharmaceutical Research Institute and Hengdian and Shanghai R & D Centers to conduct research and development of formulations and APIs, which will gradually enter the harvest period.

The sales expense was seriously affected by the increase in the development of the formulation market and the transfer of document names, and the expense ratio was 12.

69% (+3.

41pp).

Management expenses achieved significant results through internal integration, the absolute value was basically flat, and the expense ratio dropped significantly to 11.

46% (-1.

78pp).Financial expenses decreased by the impact of foreign exchange1.

67pp.

In the future, efficiency improvement is expected to reduce the management expense ratio.

The main risks facing the rating are the risk of fluctuations in raw material prices; the risk of falling CMO orders; the risk of preparation product development failures and slower-than-expected progress.

It is estimated that the company’s 2018 annual performance has a high growth rate, the internal integration and efficiency gains are obvious, the profitability is significantly improved, and the company’s situation continues to improve.

With the improvement of API intermediate business quality, the CDMO business has returned to the upward trajectory, and the volume of preparation products has gradually increased. The company is expected to enter the scale development 北京夜网 space in the future.

We have slightly adjusted our profit forecast based on our annual report, and we expect net profit for 2019-2021.

82/5.

98/7.

280,000 yuan, EPS0.

41/0.

51/0.

62 yuan, currently corresponding to PE 23.

4/18.

9/15.

5 times.

Maintain Buy rating and continue to recommend.