Changchun High-tech (000661) 2019 Interim Report Comments: Performance basically in line with expectations Management mechanism gradually increases rationalization

Changchun High-tech 都市夜网 (000661) 2019 Interim Report Comments: Performance basically in line with expectations Management mechanism gradually increases rationalization
Core point of view The company’s performance was basically in line with expectations. Jinsai’s revenue maintained a high growth rate of more than 40%, and 100 grams gradually recovered in the second half of the year. The real estate business grew rapidly, and Huakang’s share continued to decline. The company intends to issue shares and convertible bonds to purchase the remaining 30% of Jinsai’s equity. Upon completion, the management mechanism will be streamlined and the company’s performance will be significantly increased. The company’s performance basically met expectations. In 2019, the company realized revenue, net profit, and deducted non-net profit33.92, 7.27, 7.1.8 billion, +23 a year.36%, +32.60%, +39.47%, deducting non-performance growth basically in line with expectations. 2019Q2 revenue, net profit growth faster than the decline in 2019Q1, mainly due to the drag of 100 grams of biological and high base in 2018Q2. Jinsai’s revenue maintained a high growth of more than 40%, and 100 grams is expected to gradually recover in the second half of the year. 2019H1 Kinsey Pharmaceutical Revenue 21.4. Net profit 8.2 ‰, +41 a year.7%, +47.7%, budget revenue growth is expected, and net profit growth will remain above 40%. The company announced that it intends to issue shares and convertible bonds to Jin Lei and Lin Dianhai to purchase the remaining 30% of Jinsai’s equity. After completion, it will bring Jin Lei to the same stakeholder of the listed company and is expected to significantly increase the company’s performance. 2019H1 100 grams of biological income to achieve revenue, net profit4.1.0 ppm, ten years -29.2%, -30.8%, mainly due to the decrease in the number of approved issuances due to the severe industrial regulation. It is expected to gradually recover in the second half of 2019, and the internal profit volume is expected to be close to last year’s level. The company’s nasal spray vaccine has been approved for prior trial and is expected to be approved for listing in the second half of this year. The real estate business has grown rapidly, and Huakang’s share has been declining.2019H1 company’s real estate subsidiary realized revenue and net profit5.4,1.200 million, before +37.8%, +89.8%, profit contribution is expected to decrease in the second half of the year.Huakang Pharmaceutical realized income 2.9 trillion, ten years +13.7%, a recovery from last year, but the proportion of performance will continue to decline. The company’s expense ratio was basically stable and the net operating cash flow increased significantly. The company’s 2019H1 finance, management, and sales expense ratio is -0.52%, +5.11%, +34.62%, -0 per year.33, +0.01, -1.22 PCTs, the increase in the management fee rate was mainly due to the increase in intermediary agencies and consulting fees (about 10 million), and the overall period fee rate declined. Company R & D grant 2.32 trillion, +3 for ten years.79%.Net operating cash flow 8.4.9 billion yuan, +355 per year.7%, which is expected to be mainly due to a significant increase in advance receipts. Risk factors: Jinsai’s sales system expands more than expected, and growth hormone competition intensifies risks. Investment suggestion: The company’s biopharmaceutical sector has experienced strong growth, with rich products under development. Regarding asset restructuring for the time being, merging the 2019 Interim Report, Jinsai’s high growth and the recovery of Encyclopedia’s operating conditions in the second half of the year, raised the EPS forecast for 2019/2020/2021 to 7.97/10.39/13.34 yuan (original 7.78/10.01/12.56 yuan), maintain “Buy” rating.