Xianfeng Pharmaceutical (002332) Commentary Report: Benefiting from volume sales of pharmaceutical preparations and price increase of APIs, Q1 2019 results exceeded expectations

Event: On April 24, 2019, the company released the 2018 annual performance report and the 2019 first quarter report, and achieved revenue of 36 in 2018.

2.2 billion (+26.

97%), net profit attributable to mother 3.

10,000 yuan (+45.

85%), net profit after returning to the mother 2.

8.2 billion (+51.

00%); In Q1 2019, it achieved revenue of 8.

3.6 billion (+0.

70%), net profit attributable to mother is 58.01 million yuan (+43.

23%), net profit after deduction is 56.26 million yuan (+37.

16%), 2019Q1 performance growth exceeded market expectations.

Comments: 2018 and Q1 2019 results increased 45.

85% and 43.

23%, 2019Q1 performance growth exceeded market expectations: revenue end, the company achieved revenue of 36 in 2018.

22 ppm, an increase of 26 in ten years.


Among them, leather hormones, gynecological and family planning medicines, anesthesia and muscle relaxation medicines, and other products achieved revenue of 15 respectively.

9.7 billion, 8.

5.6 billion, 5.

5.1 billion, 6.

08 million yuan, an annual increase of 70.

82%, 8.

79%, 29.

20%, -12.


According to the sales of various business segments, we believe that the increase in the price of APIs has driven the rapid growth of leather hormones, and rocuronium and atracurium have become important sources of growth for the anal Hull muscle relaxant drug segment; Q1 2019Realize revenue.

36%, an annual increase of 0.

70%, we expect rocuronium bromide and atracurium to maintain a growth rate of more than 25%. The impact of the relocation of the API plant and the impact of Newchem’s revenue changes are the main reasons for the rapid growth of revenue in the first quarter of 2019.

On the profit side, the company achieved net profit attributable to its mother in 20183.

10,000 yuan, an increase of 45 in ten years.

85%, growth in line with expectations.

Among them, non-recurring gains and losses were 18.99 million yuan, mainly from government subsidies.

NewChem achieves revenue and profit5.

63 million and 8977.

280,000 yuan, formed a good synergy after the merger.

The net profit attributable to the parent in 2019Q1 was 58.01 million yuan, a year-on-year increase of 43.

23%, mainly due to the increase in raw material prices to promote gross margin improvement (the overall gross profit margin from 56 in 2018Q1.

32% increased to 59 in 2019Q1.13%).

Expenses remained stable after 2018, with three fees accounting for 46% in 2019Q1.

85%: Three fee revenue accounted for 46 in the first quarter of 2019.

85%, a year to raise 0.

29 amounts, period expenses will remain basically stable after 2018.

Among them, the sales expense ratio, management expense ratio, and sales expense ratio are 30.

07% (-0.

73 pct.

), 13.

78% (1.

11 pct.

), 3.

00% (-0.

09 pct.

APIs benefit from price increases and high-end production capacity acceptance, and the formulation business is in-depth in specialized areas: APIs. In the near to medium term, under the influence of the 四川耍耍网 “environmental improvement and pharmacological environment” expansion, the acceleration of small factory exits, and the oligopoly layout is favorable for the short-term andLong-term, due to the acquisition of 100% equity of Newchem and Effechem in Italy, the company has laid out and extended high-end APIs. We believe that the follow-up process of basic APIs will gradually realize the production of high value-added high-end APIs.The introduction of high-end APIs from overseas to achieve domestic market preparation declarations and preparation exports is an important part of the company’s long-term performance growth.

Preparation section, in-depth layout of gynecology, anesthesia muscle relaxation, respiration, and skin. The four specialty high-quality racetracks. Xianfeng Pharmaceutical is one of the few steroid hormone companies that has the integrated cost advantage of drug substance preparations.
Profit forecast and estimation: Based on the company’s current business situation, we estimate that the company’s net profit attributable to the parent in 19-21 is 4 respectively.

1.5 billion, 5.

2.4 billion, 6.

40 ppm, corresponding to 18, 14, 11 times PE, maintaining the “highly recommended” level.

Risk reminder: The price increase of the API does not meet expectations; sales and R & D progress are not up to expectations; price reduction risks.