Northeast Pharmaceutical (000597): Rapid growth in preparations and bad debts affect performance

Northeast Pharmaceutical (000597): Rapid growth in preparations and bad debts affect performance

Northeast Pharmaceutical (000597): Rapid growth in preparations and bad debts affect performance

Event: The company released its annual report: The company achieved revenue of 74 in 2018.

6.7 billion, an annual increase of 31.

54%; net profit attributable to mother is 1.

9.5 billion, an annual increase of 64.

04%; net profit after deduction is 0.

4.2 billion, down 63 every year.

18%; EPS per share 杭州桑拿网 is 0.

36 yuan.

Key points of investment: The growth rate of APIs is relatively small due to relocation, and the preparation business is growing rapidly.

Revenue for the fourth quarter of 201818.

4.9 billion, an annual increase of 24.

53%, compared to Q1 (36.

39%), the second quarter (34.

61%) and Q3 (31.

(07%) has improved, but from the perspective of each quarter’s revenue scale, basically maintained a stable trend.

In terms of the annual discrete business in 2018, the sales revenue of APIs was 15.

7.2 billion, an annual increase of 4.

55%, sales volume of API is 2.

35 years, with an annual increase of 1.

94%; of which VC series revenue is 8.

00ppm, the ten-year average of 3.

35%, which is mainly related to the price deviation of VC since the end of December 2017.

In addition, due to the relocation of the factory area, the production of some APIs has also improved, so sales growth has been slow. Except for the relocation of offset products, the expected increase in output is 24.

1%; therefore we believe that after the successful completion of the relocation in 2019, the growth rate of API revenue is expected to increase.

In terms of preparations, it achieved revenue of 29 in 2018.

$ 3.5 billion, an increase of 47 per year.

86%, sales of preparations increase by 17 per year.

50%; It is expected that the intestinal health, core products such as carbopregnancy and levocarnitine will continue to maintain rapid growth momentum.

Bad debt loss 2.

16 trillion USD deducted non-net profit maximize expansion.

The consolidated gross profit margin for 2018 was 41.

38%, an increase of 1 per year.

84 digits, an increase of 0 from the previous quarter.

In 27 years, it was mainly due to the increase in the gross profit margin of the preparation business, of which the gross profit margin of the bulk drug in 2018 was 52.

27%, a decline of 3 per year.

22 units; the gross profit margin of the preparation business in 2018 was 68.

12%, an increase of 7 per year.

82 inches.In terms of performance, the net profit after deducting non-attribution to mothers in 2018 was 0.

$ 4.2 billion, mainly due to asset losses2.

US $ 5.9 billion caused this, while bad debt losses from asset losses2.

1.6 billion, compared with only 0 in the same period last year.

1.7 billion, and 0.

$ 3.2 billion in inventory loss and 0.

11 trillion of goodwill is impaired.

In addition, the net profit attributable to mothers in 2018 was 1.

9.5 billion, an annual increase of 64.

04%, mainly due to a substantial increase in non-operating income, the annual non-operating income is 1.

4.5 billion US dollars, an annual increase of 85.

90%, the first is supplement 1.

$ 3.2 billion in compensation for demolition.

Fangda continued to advance, and the consistency evaluation progressed smoothly.

In July 2018, Fangda became the main shareholder and carried out a series of management reforms of the company. First, it started to reduce costs and increase efficiency, and diversified the entire chain from procurement, production, and sales to reduce costs and increase efficiency.

In addition, the company comprehensively studied Liaoning Fangda from top to bottom, cadres and employees quickly changed their ideas, strengthened problem-oriented and results-oriented, and the horse racing work also began trials in November 2018, covering 70 units of the company.

We believe that through a series of measures, it is expected to improve overall operating efficiency, further increase employee motivation, and be conducive to long-term healthy development.

In terms of consistency evaluation, the company has carried out consistency evaluation of 32 products and 41 varieties. A total of 18 products have completed pre-intermediate-level experiments, 9 products have undergone pre-BE experiments, and 1 variety has entered bioequivalent.During the sex test phase, the submission of the application materials for one breed has been completed.

Maintain the “Recommended” level.

As the company conducted equity incentives at the end of 2018, it is assumed that the amortization cost for 杭州桑拿网 2019-2020 is 21774.

30,000 yuan and 7044.

540,000 yuan, EPS is expected to be 0 in 2019-2021.

19 yuan, 0.

59 yuan and 0.

79 yuan.

Considering the improvement of Fangda and the continuous growth of its performance after the entry, we maintain the “recommended” level.

Risk warning: changes in the price of the drug substance; rapid increase in sales expenses; sales promotion is not up to expectations;