Fosun Pharma (600196): Innovative business continues to expand and the pharmaceutical segment performs better

Fosun Pharma (600196): Innovative business continues to expand and the pharmaceutical segment performs better

On August 26, Fosun Pharma released its 2019 interim results report, realizing operating income, net profit attributable to mothers, and net profit attributable to mothers after deduction of 141.

7.2 billion, 15.

1.6 billion and 11.

6.8 billion, corresponding to a growth rate of 19 respectively.

51%, -2.

84% and -2.

75%, achieving an EPS of 0.

59 yuan / share.

Brief comment on the steady growth of revenue, the profit side was affected earlier by the associates in the second quarter of a single quarter, the company achieved operating income of 74.

42 ppm, an increase of 21 in ten years.

22%, net profit attributable to mothers, net profit attributable to mothers after deduction is 8, respectively.

04 billion and 6.

3.8 billion, down 5 each year.

95% and 5.

32%.

The company’s revenue growth has maintained good growth and continued to maintain rapid growth. At present, the main pharmaceutical, equipment and service sectors are operating well.

The initial growth rate of the profit-夜来香体验网side growth rate is Fosun Kate, and the joint ventures such as Intuitive Fosun are at an early stage and are now gradually changing, affecting the company’s overall profit.

At the same time, the decrease in the profits of medical services and the equipment sector has also caused some impact.

Excluding investment income, income from joint ventures, etc., the operating profit growth of expenses during the initial period of gross profit increased by about 12%.

The company’s overall gross profit margin is 60.

49%, an increase of 2 compared with the first half of last year.

20 units.

Among them, the drug sector was mainly affected by the resistance, increasing by 2.

19 expectations, part of which is expected to be affected by the two-vote system, while the impact of auxiliary medication is gradually eased.

The 淡水桑拿网 company’s operating cash flow increased by 13.

40%, basically matching income growth.

In terms of expenses, the company sells (49.

98 billion, +31.

39%), management (11.

19 billion, +10.

76%), R & D (8.

4.9 billion, +19.

80%), finance (4.

6.6 billion, +32.

56%) expense ratios are 35.

27%, 7.

90%, 5.

99% and 3.29%, a change of 3 over the same period last year.

19, -0.

62, 0.

01, 0.

32 units.

Among them, the sales expenses have increased significantly, first including the promotion of rituximab after listing, the US sales team establishing and expanding Sisram’s North American direct sales network, etc.

R & D costs have continued to grow rapidly.Fuhong Hanlin will generally develop a variety of biosimilar drugs and phase III clinical trials of PD-1. At the same time, other subsequent research and development pipelines and newly established innovation incubation platforms will require continuous investment. It is expected thatThe company will continue to invest in the future.

The increase in financial expenses is still affected by the increase in average interest-bearing debt.

The performance of the pharmaceutical sector is good, and the high growth of medical service revenue. In terms of business segments, the company’s pharmaceutical segment performance has maintained a steady rise, and the revenue of the equipment and service segments has continued to rise, but the profit has a certain margin.

Pharmaceutical segment: Revenue 108.

9.5 billion (+21.

65%), profit 12.

32 billion (+22.

59%), gross margin 66.

80% (+2.

19pct) As the company’s highest core business segment, the revenue and profit of the pharmaceutical segment have maintained good growth.

Among the more core subsidiaries, Yaoyou and Wanbang grew rapidly, and their revenue increased by 27.

27% and 34.

41%, profit increased by 39.

45%, 59.

01%.

Grand Pharmaceuticals achieved operating income11.

9.4 billion, net profit 2.

11 trillion, an increase of 18 each year.

86% and 28.

91%, with rapid profit growth.

Aohong Pharmaceutical’s revenue reached 12.

42 ppm, an increase of 86 in ten years.

41%, profit increased by 17.

61%, the impact of Odkin has basically recovered.

Fuhong Hanlin launched multiple phase III clinical trials of PD-1 mAb in the first half of the year. At the same time, several previous biosimilars were in phase III. It is expected that they may still be substituted, driving down the profit of the sector.

In terms of products, Wanbang’s febuxostat, pitavastatin, and Dongting Pharmaceutical’s quetiapine fumarate achieved rapid growth, increasing by 117 respectively.

4%, 115.

9% and 30.

7%.

Central nervous system medication accelerated to 78.

At 80%, Audekin’s sales have picked up.

The blood system and cardiovascular medication maintained a rapid growth rate, increasing by 35.

80% and 21.

14%. In addition, Fuhong Hanlin’s rituximab began to sell in mid-May, and the current sales are good and the market is highly recognized.

At present, Fuhong Hanlin is about to be listed on the Hong Kong Stock Exchange. In the future, the development of several core biosimilar drugs and bioinnovative drugs will be promoted, and a rich product line will be gradually added to achieve profitability and sustained performance contributions.

Medical services: income 14.

5.9 billion (+21.

56%), profit 2.

30 billion (-8.

78%), with a gross margin of 26.

10% (-1.

(18 points) Excluding factors such as mergers and acquisitions, medical services revenue increased by about 16 compared to last year.

68%, maintaining a good growth trend.

The main reasons for the decline in net profit were new construction, mergers of newly opened hospitals, and rising operating costs.

The company announced in July that it had transferred the shares of United Family to Xinfeng Tianyu, but it still retained part of its shareholding in the future parent company of United Family.

The sale of United Homes can significantly improve the profit side of the service sector.

At present, the company’s medical service sector has basically completed regional strategies and specialties, and the layout of key hospitals. In the future, through the improvement of hospital operation efficiency, improved operating conditions, and continuous improvement in performance promotion.

Medical equipment: Revenue 17.

9.7 billion (+6.

45%), profit 1.

01 billion (-24.

47%), with a gross margin of 51.

19% (+1.

84pct) The revenue growth of the medical device segment is relatively slow, and profits have declined.

Da Vinci’s robot business has been transferred to Intuitive Fosun. At present, Intuitive Fosun is still in the early expansion stage, and it has actually expanded.

Da Vinci’s robotic surgery volume increased by 16% each year, but the installed capacity was less than expected in the first half of the year.

At the same time, Breas’ new product launch progress has improved.

In the first half of the year, the subsidiary Sisram’s revenue and net profit increased by 9.

31% and 23.

20%, and then continue to accelerate the development of global markets and focus on emerging markets, while further strengthening the development of new products, especially medical treatment equipment, the expansion of the product line to the field of clinical treatment.

In addition to the three core sectors mentioned above, Sinopharm Holdings, in which the company has a shareholding, achieved good growth in the first half of the year, realizing revenue of 2017 million yuan and net profit attributable to its parent of 3 billion yuan, up 23 respectively.

36% and 6.

33%.

The short-term performance is under pressure, optimistic about the future medium- and long-term innovation layout. Fosun Pharma’s current performance is affected by some joint ventures. We believe that these companies will change in the short term, but they will be an important driving force for the company’s future long-term development.

Taking Fuhong Hanlin as an example, the company has experienced nearly 10 years of growth and is currently about to be listed and traded on the Hong Kong Stock Exchange. It has grown into a leading domestic biosimilar drug and bioinnovative drug research and development enterprise.

At present, the company belongs to Fosun, Hongchuang, Fosun Leading Intelligence, Intuitive Fosun, Fosun Kate and other companies with the potential to grow into leading companies in segmented industries in the future.

Fosun Pharma has continued to expand its innovative business. For example, it has continued to introduce innovative products, insisted on investing in innovative drugs, and invested in Butterfly Network in the CAR-T field, including the device field.

At this point in time, the pressure brought by innovative business is also the driving force for the company’s continued transformation and transformation in the future.

And the company’s current product mix has reduced the proportion of auxiliary drugs, the growth of Han Likang, pitastatin, febutastat and other new varieties will provide the company with a new round of growth momentum.

Fosun Pharma’s main business covers three major sectors: pharmaceuticals, equipment, and services. It also has a stake in Sinopharm Holdings, and its internal business has strong mutual coordination capabilities.

As the main body of Fosun Group’s healthy ecology, the company’s participation and development strategy are incorporated into the international heritage.

The company’s current generic drug segment is under pressure, but it is actively promoting research and development to transform it into innovative drugs.

Fosun Pharma has established Fuhong Hanlin (biological medicine), Fosun Kate (cell therapy), Intuitive Fosun (surgical robot), Fosun Hongchuang (first-class innovative medicine), and Fosun Pharmaceutical (small molecule innovative medicine).), Xingtai (R & D of new preparations), etc. as the main body, with a clear division of labor.With strong platform advantages and innovation advantages, we expect the company’s future target business to continue to improve with the coordinated development and has the potential to become an international pharmaceutical company.

Earnings forecast and investment rating We expect Fosun Pharma to realize net profit attributable to mothers in 2019-202131.

4, 37.

2.43.

7 trillion, with growth rates of 15 respectively.

6%, 18.

7%, 17.

3%, corresponding to current sustainable PE is 23, 20, 17 times, maintain “Buy” rating.

Risk warnings ① The progress of new drug research and development is less than expected; ② The company’s merger and acquisition expansion is less than expected; ③ intense competition in the variety industry for sale, which leads to improved performance.

④ The performance of related investment companies or participating companies was lower than expected.

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