Hisun Pharmaceutical (600267): After turning non-profit, turning profit into profit

Hisun Pharmaceutical (600267): After turning non-profit, turning profit into profit

Event: The company released its semi-annual report for 2019 and achieved operating income of 56.

6.6 billion, an annual increase of 6.

27%; net profit attributable to mother 0.

530,000 yuan, an increase of 254 in ten years.

51%; the net profit of the mother after deduction is 5.46 million yuan, an increase of 68.09 million yuan each year, after deduction of non-deduction, the company will turn a deficit into a profit.

Revenue increased slightly. Looking at the rapid volume of biopharmaceuticals by business segment, the pharmaceutical business subsidiary’s revenue22.

2.5 billion (-3.

6%) and net profit of 2387.

200,000 yuan (+22.

35%).

The growth of the company’s operating income was mainly contributed by the preparation business, and the company’s overall gross profit margin was 46 in the first half of the year.

07%, an increase of 7.
.

71Pct, mainly benefited from the increase in the proportion of high gross profit preparations, including the self-produced Hisun Pharmaceuticals promoted by Hanhui Pharmaceutical and Haikun Pharmaceutical Sales Platform, and Pfizer products that Hanhui Pharmaceuticals promoted and sold during the transition periodSales of newly introduced preparations increased.

In terms of biopharmaceuticals, the sales of Amber exceeded 240,000 in the first half of the year, an increase of 162% per year. The number of new patients also continued to grow steadily, and the estimated expenditure was over 100 million.

Han Fai Pharmaceutical Revenue 22.

0.9 million yuan (+8.

6%), net profit 3.

400 million (-12.

8%). The main reasons for the decrease in expected profits are: 1) there were about 80 million government subsidies in the same period last year, and there was no such income in this period; 2) the cost of consistency assessment increased;increase.

Haikun Pharmaceutical, a self-produced product promotion platform, has set up a complete management system and performance evaluation system. Through 杭州桑拿网 carding channels, streamlining business, improving marketing efficiency, and achieving product sales growth, Ximeixin injections and tablets increased by 10%And 38%, Isokia increased 14% in ten years, and Cycrine capsules grew 29% longer.

Hisense Nantong, a subsidiary of API, achieved operating income of 7,731.

120,000 yuan (+ 125%) can reach 4557.

20,000 yuan, an improvement compared with the same period of last year, it is estimated that it is mainly due to the increase in depreciation after the conversion from fixed production to solid production and the conversion of interest and expenditure into expenses.

Sales and financial expenses increased rapidly, and the scale of interest-bearing debt decreased slightly. In 2018, selling expenses were 14.

4.1 billion (+27.

50%), which is mainly due to the increase 武汉夜生活网 in marketing business fees.

Management expenses 3.

5.6 billion (+13.

49%), financial expenses 2.

3.7 billion (+55.

02%), mainly due to the in-progress accounting of the progress of construction in progress and the conversion of some index expenditures, and the increase in financing costs of 16 Hisun debt.

The scale of interest-bearing debt (short-term borrowings + long-term borrowings + bonds payable) was US $ 9.4 billion, a decrease of approximately US $ 400 million from the initial decline and a decrease of approximately US $ 600 million compared to the same period last year.

Due to the large-scale investment in fixed assets, the company’s interest-bearing debt balance has continued to grow. At present, fixed asset investment is gradually coming to an end. Worries about demand are correspondingly reduced. New shareholders have also proposed a “focus, slim, and optimize” strategy for continuous improvement of operations.It is expected that the company will deny that the scale will gradually decline in the future.

Biopharmaceuticals enter the harvest period, increasing research and development efficiency and increasing research and development costs1.

USD 9.3 billion, which is basically the same as the same period last year, but the company’s key projects are progressing smoothly, reflecting the company’s R & D pipeline has improved its R & D efficiency.

At present, adalimumab has completed clinical site verification and data review, and relevant pre-market preparations have been initiated; Phase III clinical studies of insulin aspart have been completed and are currently in preparation for reporting data; Infliximab and glargine have been completedSubstitute clinical phase III enrollment work; initiated clinical phase I research work on HS636 (anti-PD-L1 monoclonal antibody), HS632 (omagizumab) and HS630 (ADC).

In terms of domestic generic drugs, there are 2 varieties and 5 product specifications that have passed the national generic consistency assessment, and 7 varieties have been declared. A total of 2 varieties have obtained production approvals according to the newly registered classification 4 and the company’s generic drug varieties are constantly enriching.It realizes the layout of the whole industry chain of raw material medicines and preparations, has strong cost control ability, and has a breakthrough advantage in centralized mining.
In terms of international generic drugs, six formulations were approved in the United States, of which three were injections; two APIs were approved to enter the United States.
The tylosin API was submitted in 30 countries and entered the review stage; the micaflavin API was submitted in 18 countries and entered the review stage.

Validation has been completed for four drug substances under development.

Estimation and investment advice-the old king, the turning point in history!

Since this year, the company has accelerated the transfer of non-core assets, including the transfer of property, non-core R & D subsidiaries (Dongming Pharmaceutical), capital reduction (Hisense Xuantai), generic drug transfer (Hisense Xuantai), and other tasks.Highlight the three main businesses of biological medicines, bulk medicines and preparations.

Since the company’s new shareholders took office, they have focused on strengthening the internal management system. At present, they have achieved initial results. After 19H1, the company achieved profit after deductions, marking the company’s business and management balance to meet the historic inflection point.The mature CSO model has continued to grow through the introduction of diversity, and it is expected that the profit of Hanhui Pharmaceutical will grow steadily in the future; 2) The value of the biopharmaceutical sector is seriously underestimated.

After the production expansion of Abbino started to increase rapidly, adalimumab has already been reported for production, and is expected to be approved in Q4 of 19, and many biopharmaceuticals have entered the clinical phase III and gradually harvested; 3) chemical innovation drug Hezemeb IIIThe clinical data is good. It has been declared for production and has been replaced for priority review. 4) The number of generic drug approvals is large, there is no stock, and the production capacity is large. If we can grasp the national centralized procurement policy, we can give full play to the advantages of integration of our own APIs.It is expected to make full use of fixed assets to cover depreciation expenses; 5) In the future, the company will continue to reduce the number of reduced construction projects and improve research and development efficiency, dispose of idle assets / non-core projects, and recover cash from appointments and investments, highlighting biopharmaceuticals, preparations and APIs, etc.Main business, strengthen the construction of internal control system, production / management costs will continue to decrease.

The transfer of the old shares of Hisun-Bo Rui, a subsidiary of mAb, and the increase in capital and shares have been steadily progressing at the same time. After the transfer is completed, it is expected that the company’s subsequent rate of return and financial costs will gradually decrease, and profits will gradually be released.

Hisun Pharmaceutical’s 19-year reasonable estimate is 17 billion (Hanhui 7 billion + biological drugs 7.5 billion + chemical drugs-1 billion + APIs 3 billion + commercial 5 billion).

Of which: 1) Hanhui Pharmaceutical 7 billion: estimated net profit in 19/206.

61/8.

7,000 yuan, an increase of 25% / 22%, Hisun Pharmaceutical holds 51% equity, net profit 3.

37/4.

12 trillion, calculated at 19 times 20 times PE, corresponding to an estimated 70 trillion.

2) 7.5 billion biopharmaceuticals: Hisun-Bao Rui evaluates 56 trillion + Haisheng Pharmaceuticals estimates 1.9 billion, and are valued at primary market prices.

3) Chemical medicines-1 billion: conservatively estimated assets of chemical medicines are 5 billion (estimated product line + asset evaluation based on fixed assets), replaced by 6 billion (resulting from fixed asset investment), and valued at 1 billion: existing productsIncreasing profit potential: 200 million net profits in 18 years. Over 50 types of generic drugs have been reported, covering large varieties, benefiting from centralized procurement by the country. 15 innovative drugs are being developed. Among them, Phase III clinical data of Haize Maibu are good, with years of R & D investment.The results have begun to appear. The research product echelon (generic drugs, innovative drugs) is good, plus the fixed asset investment of 5 billion, a total of conservatively given 5 billion US dollars in revenue; chemical drugs make up an estimated 6 billion, after replacement, the value of 1 billion.

Subtracting: selling approvals, selling fixed assets.

4) 3 billion drug substances: 2017 net profit of 20-30 million yuan.

The FDA and the European Union have banned more than US $ 300 million in normal net profit. The US market has been lifted in June 17 and sales have gradually resumed. The company is currently exploring and actively expanding into the Japanese market. The increase in high-margin regulatory drug market revenue will increase profitability.

At the same time, the company is expanding its domestic market development and undertaking CMO business, which will become a new growth point.

Based on 10 times PE, it is estimated to be 3 billion.

5) 500 million pharmaceutical business: 2018 net profit of 31 million yuan, is expected to continue to maintain stable growth, a reasonable estimate of 500 million.

As the company may still accrue asset impairment and suspend one-off expenses such as research and development projects in 19 years, it will reduce 19 years of profits, but solving the problems left over from history will help the company’s long-term development and profit release.

It is expected that the real performance in 20 years will begin to fully reflect and the inflection point will be integrated.

Assuming that Hisense Broady’s old stock transfer / capital increase is completed within the year and investment income is recognized, it is expected that the company will achieve net profit attributable to mothers in 19/20/21, respectively.

2.2 billion, 3.

09 ppm and 5.

2.5 billion, with EPS of 1.

06 yuan, 0.

32 yuan and 0.

54 yuan.

The company has ushered in a historical turning point of management and operation. The current market value is less than 100 trillion, which is underestimated, and a reasonable estimate of 170 trillion in 19 years, maintaining the “Buy” rating.

Risk reminders: the risk of rapid and comprehensive promotion of national collective procurement; management failure to streamline; depreciation of fixed assets and excessive financial costs affecting performance.