Kanghong Pharmaceutical (002773): Slight increase in profit attributable to mother is expected to maintain rapid growth

Kanghong Pharmaceutical (002773): Slight increase in profit attributable to mother is expected to maintain rapid growth

Event: On April 29, 2019, the company released the 2019 first quarter report.

The company achieved operating income in the first quarter of 20197.

17 ppm, a ten-year increase2.

43%; realized net profit attributable to mother 2.

11 ppm, a ten-year increase2.

44%; net profit deducted from non-attributed mothers1.

98 ppm, a ten-year increase2.

73%.

Opinion: The return of mother’s profits has increased slightly, and Compaq Ship is expected to maintain rapid growth.

Realized operating income in the first quarter of 20197.

1.7 billion (2.

43% +), net profit attributable to mother 2.

1.1 billion (2.

44% +).

Among them, the parent company achieved revenue 2 in Q1 2019.

7.3 billion (-20.

05%), net profit attributable to mother was 63.92 million yuan (-39.

44%).

We expect that this is mainly due to the poor performance of the parent company’s chemical business and traditional Chinese medicine business. However, Compaq’s core product, Kang Hong Bio’s core product, is expected to maintain rapid growth, and its volume will continue to be considerable after entering medical insurance.

Net operating cash flow in the first quarter was 7620.

66 million, an annual increase of 530.

08%, the repayment situation has improved significantly.

Accounts receivable and notes 4.

91 ppm, accounting for 69% of revenue, and increased by approximately 18 indicators in 2018Q1.

Inventory 2.

52 ppm, accounting for 5% of the total assets, which is basically the same as the previous year.

The company’s overall gross profit margin steadily rose to 92 in the first quarter of 2019.

24%, and 92 for the full year 2018.

The level of 17% is basically the same, mainly because the proportion of revenue of biological products (Lang Mu) with higher gross profit has increased to a certain level.

Selling expenses 3.

08 thousand yuan (-2.

94%), and the selling expense ratio is 42.

98%.

Management expenses of 68 million yuan (23.

99% +), expense ratio 9.

48%, R & D expenses 46.43 million yuan (43.

09% +), expense ratio 6.

48%, the total cost rate level is close to 16%, more than 3 replacements beyond the promotion, which is consistent with the gradual increase in 2018.Among them, research and development costs have increased significantly. We expect that the company will mainly conduct product research and development, and consistency evaluation of chemical products.

Finance expense ratio -0.

63%.

Profit forecast and investment advice: We expect the company’s operating income for 2019-2021 to be 35.

2.8 billion, 42.

4.7 billion and 51.

70 ppm, an increase of 20 in ten years.

94%, 20.

35%, 21.

74%; net profit attributable to mothers is 9, respectively.

04 billion, 12.

18 ppm and 15.

80 ppm, an increase of 30 in ten 南宁桑拿 years.

04%, 34.

76% and 29.

75%, corresponding EPS is 1.

34, 1.

81, 2.

35.
Considering that Lang Mu has entered the rapid volume of medical insurance, the US clinical phase III trial was officially launched in 2018 to maintain the “overweight” level.

Risk reminder: the risk that Compaq’s promotion fails to meet expectations; the risk of failure of overseas clinical trials; the risk of drug price reduction.

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