Zhejiang Pharmaceutical (600216): Better-than-expected performance, optimistic about the change in the vitamin E industry pattern and positive impact on the company
Event: Zhejiang Pharmaceutical released its 2019 semi-annual report, with operating income of 35 in the first half of 2019.
86 ppm, a five-year increase of 5.
69%, net profit is 2.
70 trillion, down 40 a year.
09%, the basic EPS is 0.
3 yuan, sales gross margin is 40.
14%, with an average ROE of 3.
Corresponds to operating income for the second quarter of 201918.
6.7 billion, an increase of 8 from the first quarter.
61%, net profit 1.
48 ppm, an increase of 12 from the previous month.
78%, deducting non-net profit1.
48 ppm, an increase of 100 from the previous month.
Among them, the company accrued impairment losses of 59.43 million yuan in the second quarter of 2019.
The performance was better than expected, and non-profit deductions increased by 100 in the second quarter.
00%, mainly related to the increase in vitamin A and vitamin E prices.
The company’s net profit interval in the first half of 2019 showed a significant margin in the first half of 2018, which is related to the company’s high base in the first half of 2018. The domestic price of vitamin A in the first quarter of 2018 was a historical high, and the average price in the first quarter was 1,349 yuan / bottle.
The company’s revenue in the second quarter of 2019 increased by 8 sequentially.
61%, deducting non-net profit 1.
48 ppm, an increase of 100% month-on-month, and the better performance was mainly related to the rising price of vitamin A at the reported price and maintaining a high level.
We are optimistic about the positive impact of the vitamin E industry structure on the company.
The transfer of Vitamin E from Nante Technology and DSM has been completed. After the transaction, DSM is responsible for the sales of Vitamin E and Nante is responsible for production, each with a 50% interest. The vitamin E industry structure has been transformed into DSM-Nante Technology.BASF, Zhejiang Medicine, Xinhecheng.
Nantec has changed from the industry’s reverser to the maintainer of the industry pattern. The industry pattern has returned to the vitamin E bull market in 2008-2012, when the price of vitamin E changed between 100 yuan and 250 yuan.
At present, the operating rate of each production capacity is at a high level.
Each mentality is expected to change from a price war to maximize profits, and vitamin E prices are expected to rise in the future.
The company’s vitamin E production capacity is 40,000 tons of powder, and each increase of 10 yuan / ton of vitamin E powder helps to increase the company’s profit elasticity3.
Pay attention to the company’s 杭州桑拿 pharmaceutical business progress and growth is expected.
The company reports that the first-class linezolid drug substance is approved, and the company’s attention to the company’s innovative drugs, innovative preparations and consistency evaluation progress will constitute an important increase of the company.
Earnings forecast and investment grade: We maintain our profit forecast for 19-21, and expect the company’s net profit for 2019-2021 to be 8.
810,000 yuan, EPS is 0.
Maintain target price at 14.
71 yuan, corresponding to 17 times PE in 2019, maintain “Buy” rating.
Risk reminders: production safety risk, vitamin product price decline risk, risk of weakening downstream demand in the aquaculture industry, raw material price risk, Sino-US trade dispute risk, exchange rate risk, continued global economic expectations, new drug approvals fail to meet expectations, and innovative drug development failurerisks of.