Fosun Pharma (600196): Steady revenue growth in 19H1 and cost increase dragging profits
Investment highlights: Revenue growth in the first half of 201919.
5%, deducting non-net profit fell by 2.
Revenue for the first half of 2019 was 141.
700 million yuan, an increase of 19.
5%, basically from endogenous growth; net profit attributable to mother 15.
1.6 billion, down 2.
84%, deducting non-net profit 11.
6.8 billion, down 2.
59 yuan, down 6.
19Q2 single-quarter revenue of 74.
40,000 yuan, an increase of 21.
2%, net profit attributable to mother 8.
04 billion, down 5.
95%, deducting non-net profit 6.
380,000 yuan, down 5.
The revenue growth was steady, and the profit side exceeded expectations. It was mainly affected by the increase in expenses and equity participation and other factors of the joint venture company: 1) The company’s expansion of new products and new markets, and the sales expense ratio increased.
19 singles; 2) Innovation incubation platforms such as Fosun Leadership, Fosun Hongchuang, and pre-reorganization of US and European subsidiaries, multiple monoclonal antibodies from Fohong Hanlin entered clinical stage, joint ventures such as Fosun Kate and Intuitive FosunWith the development of business and research and development, the company has expanded its business scale.
The pharmaceutical sector’s performance has grown steadily, and the development of innovative drugs has continued to enter the harvest period.
19H1 pharmaceutical segment revenue was 109 ppm, an increase of 21.
65%, segment profit 12.
320,000 yuan, an increase of 22.
6%, solid performance growth.
Several core pharmaceutical subsidiaries have achieved rapid growth, and Chongqing Yaoyou’s revenue has increased by 27.
3%, net profit increased by 39.
5%; Jiangsu Wanbang’s revenue increased by 34.
4%, net profit increased 59%; Jinzhou Aohong’s revenue increased 86%, net profit 17.
6%; Gland Pharma revenue increased by 18.
9%, net profit increased by 28.
The core product is febustat, and sales of pitavastatin increased by 117% and 116% year-on-year.
Rituximab (Hanli Kang) has been officially launched in mid-May and has quickly received market recognition, becoming the first biosimilar to be approved for marketing in China.
In terms of monoclonal antibody research and development, adalimumab (psoriasis) has been given priority review procedures at the end of April; trastuzumab (sulfuric acid) has replaced the priority review procedures in July, while obtaining samples of new drug marketing applications in Europe; PD-1 combined with chemotherapy for metastatic esophageal squamous cell carcinoma, metastatic squamous non-small cell lung cancer, and EGFR combined with EGFR for cephalectomy squamous cell carcinoma are undergoing steady progress. It is expected that the company will enter the R & D concentration in the past 3 yearsHarvest time.
Medical devices and medical services are dragged down by short-term factors and are expected to improve in the second half of the year.
Revenue from the 19H1 medical services segment14.
600 million yuan, an increase of 21.
6%, segment profit 1 ‰, down 24.
5%, mainly affected by the interruption of the expansion period of some new and newly opened hospitals (United Family, etc.), the impact of factors such as asset disposal income in the same period last year.
The company recently announced that Fosun Industrial, a subsidiary of the company, intends to transfer all HHH (main assets: United Family) interests and shares held by NF to NF at a consideration of approximately 5.
Due to the US $ 2.3 billion, United Family is still in the expansion phase, and the company ‘s service sector performance has dragged the transition. After the transaction is completed, NFC will hold and operate United Family; Fosun Industrial will participate in the operation of United Family by holding 9.4 million shares of NFC.The transaction is expected to contribute approximately 16 to the group.
US $ 4.7 billion, used to optimize the group’s financial structure; 19H1 medical device revenue was US $ 1.8 billion, an increase of 6.
45%, segment profit 2.
30,000 yuan, down 8.
8%, mainly due to the Da Vinci surgical robot installed capacity in the first half of less than expected, Brace in the first half of the market was less than expected, etc., it is expected that Da Vinci installed capacity will increase in the second half.
Gross profit margin increased by 2.
2 averages, the cost rate increased by 2 during the period.
9 per share, budget operating cash flow increased by 10.
The gross profit margin for 2019H1 is 60.
49%, an increase of 2.
2 averages, it is expected that there are some two-vote factors; the cost rate during the period is 52.
45%, up 2.
9 units; of which the selling expense ratio is 35.
27%, up 3.
19 singles, the first is to cooperate with new products / sub-new products and core products for market development, and to adapt to the two-vote system; management expense rate 13.
89% (including R & D expense ratio of 6%), a decrease of 0.
61 units; financial expense ratio 3.
29%, an increase of 0.
32, mainly due to the increase in average interest-bearing debt and the increase in the discounted cost of right-of-use debt after the adoption of the new lease specifications.
Initial net operating cash flow
5658 yuan, increase by 10.
4%, operating quality has improved.
Endogenous + 广州桑拿 extension builds aircraft carriers in the entire medical and medical industry chain and maintains the level of overweight.
The company is a medical / pharmaceutical underestimating white horse, and the three major businesses of endogenous + epitaxial two-wheel drive go hand in hand.
Based on the interim report and considering the increase in the expense ratio, we lowered our EPS forecast for 19-21 to 1.
20 yuan, 1.
39 yuan, 1.
64 yuan (was 1).
23 yuan, 1.
47 yuan, 1.
76 yuan), an increase of 13.
1%, 16%, 18.
6%, corresponding to PE is 24 times, 20 times, 17 times, maintaining the overweight level.