Livzon Group (000513) Annual Report Comments: Chinese Medicines Decreased, Switched, Switched, and Transformed to Increase
The western medicine sector has grown steadily with a target price of 38.
0 yuan, maintaining the “buy” rating company released the 2018 annual report on March 27, achieving revenue of 88.
600 million (+3.
9%), net profit attributable to mother 10.
800 million (-75.
Increased by 6% year-on-year, as land sales in 17 years increased profits 32.
800 million), net of non-attributed net profit9.
500 million (+15.
5% yoy), slightly lower than our expectation, mainly due to further reduction in mixed sales.
We expect that the company will still contribute about 15% of the growth rate in 19-20 years due to: 1) the proportion of Shenqi is decreasing year by year, and the sales outlook is narrow; 2) some western medicines are speeding up and are less affected by the price reduction of medical insurance (Class 1 new drug AiplaAzole and complex injection leuprolide).
Taking into account the future replacement of traditional Chinese medicine and the promotion of research and development, the EPS for 19-20 is reduced to 1.
04 yuan (previous forecast 1).
26 yuan), given a 22-23 times estimate in 19 years (23 times PE average of comparable companies), with a target price of 38.
0 yuan, maintain BUY rating.
Western medicine sector: benefit from high-end preparations moat, maintain a steady growth in 2018 to achieve 42.
4 megabits (+14.
5% yoy), we expect this sector to contribute about 20% sales growth in 2019, based on: 1) Ipraprazole achieved 37% revenue growth in 18 years (4Q18 to 43%), we expect to set a new provincial standardAnd the development of medical insurance, superimposed on the price advantage of class 1 new drugs, 19 years of injection + oral is expected to achieve more than 50% increase; 2) in the field of assisted reproduction, leuprolide / follicle-stimulating hormone contributed 40% and 8% growth rates in 2018, respectivelyThe seasonal 北京夜网 increase trend is obvious, and it is expected that by the arrival of the cumulative year in 19, it is expected to achieve growth rates of about 40% and 10% respectively; and 3) accelerated promotion of second-line varieties such as rabeprazole and voriconazole (41% and 19% respectively in 18Sales growth), is expected to maintain a strong momentum.
The continued decline in parameters, the steady increase in the contribution of APIs and diagnostics is affected by the pressure of auxiliary drugs. Shenqi gradually reduced the decline by 36% in 2018. We expect the reference quantum income to decline (11% in 2018 vs 2016)22%), the subsequent introduction of new products of grassroots penetration superimposed soft bags, the decline is expected to narrow in the next two years.
NGF’s decline in 18 years also reached 14%, and it is expected to maintain a low double-digit decline in 19 years.
The company’s raw material drug sector has achieved a stable growth rate of 12% in 18 years. It is optimistic about the structural adjustment of beneficial species in 19 years to achieve a profit growth rate of about 15%. The diagnostic business has achieved a sales growth rate of about 10% in 18 years.New diagnostic products are on the market, and it is expected to achieve rapid volume in the future.
“Mab + microsphere” platform: new drug development boosts the evaluation company’s R & D investment in 20186.
900 million US dollars (+ 20% yoy). It is estimated that 19 to 40 million US dollars will be invested in monoclonal antibody and microsphere platforms in 19 years. We will switch to new drugs and land in 19-21 years. It is expected to form an expected gap in the market: 1) monoclonal antibody platform: RhCG is expected to be approved in 2H19, PD-1 is expected to achieve conditional listing through CHL Phase II, Perjeta’s range and TNF-α have entered the late clinical stage, IL-6R is currently in phase I clinical preparation, IL-17Plans are also being prepared to open clinical applications; 3) Microsphere platform: triptorelin (1 month) and leuprolide (3 months) are being developed clinically.
Risk reminder: sales of auxiliary drugs decrease, clinical data and progress of products under development are slower than expected