Kang Hong Pharmaceutical (002773): Compaq continues to increase its traditional business in an attempt to improve

Investment Highlights Event: The company achieved revenue in 201829.

2 ‰, an increase of 4 in ten years.

7%; net profit attributable to mother 6.

10%, an increase of 7 per year.

9%; net profit after deduction 6.

30,000 yuan, an increase of 0 in ten years.


2 for every 10 shares.

80 yuan (including tax). At the same time, the capital reserve will be transferred to all shareholders by 3 shares for every 10 shares.

The performance was slightly lower than expected, and Lang Mu showed a rapid growth trend.

The company’s 2018 revenue and attributable net profit growth rates were 4 respectively.

7% and 7.

9%, lower than expected performance, the company’s business is mainly divided into three major sectors of proprietary Chinese medicines, chemical drugs and biological products (Lang Mu).

By segment: 1) Biological products: 2018 revenue reached 8.

80,000 yuan, an annual increase of 42.

8%, accounting for 30% of the company’s overall revenue.


In terms of gross profit margin, the gross profit margin of biological products in 2018 reached 94.

7%, up 5 per year.

Seven averages, Kanghong Bio’s 2018 net profit was 2.

05 ppm, net margin reached 23.

2%, a substantial increase of about 8 each year.

8 units.

First, after Lang Mu entered the national medical insurance, although the price has been reduced, the scale effect has been further reflected, and the profitability has been significantly improved; 2) Chemical drugs: the income in 2018 was 11.

7 ppm, a ten-year increase of 8.

0%, gross profit margin rose by 0.

22 single, 重庆耍耍网 basically in line with expectations; 3) Chinese patent medicines: 2018 revenue is 8.

600 million, down 20 a year.

4%, gross margin decreased by 0.

87 units, a drag on the company’s overall performance.

In terms of period expense ratio: In 2018, the company’s sales expense subsidy was 47.

1%, rising by 1 every year.

3 units, management expenses 21.

1%, rising about 3 integers per year.

The company’s overall gross profit margin was 92.

2%, up by 1 each year.

The 8 averages were mainly due to the increase in the proportion of Lang Mu’s income.

Compaq market space is further opened, and the non-biopharmaceutical sector is expected to improve.The company’s flagship product, Compaq’s sales, has a higher growth trend, and is currently developing in the field of new indications, and the market space is expected to further open.

1) Domestic: New indications for diabetic macular edema (DME) have entered priority review and are expected to be approved in the second half of 2019; retinal vein (RVO) indications are in phase III clinical trials and are expected to be approved in the next two years.
2) Overseas: The company has started a phase III clinical trial of non-inferior counterparts with aflibercept, focusing on the advantages of low injection frequency.

Composip is similar in structure to aflibercept and has higher affinity than ranibizumab, but it can replicate all VEGF-A isoforms, VEGF-B and PLGF. After the indication is approved, the overseas market space will be significant着 Extended.

As for the non-biological medicine segment, the company is adjusting the sales structure and improving operating efficiency. The revenue growth rate of chemical medicine and proprietary Chinese medicine in 2018H1 was 3 respectively.

7% and -27.

0%, the growth rate in 2018 was 8 respectively.

0% and -20.

4%, the scale of the second half of the performance has improved significantly, we expect the non-biological medicine sector in 2019 will stop the downward trend and resume stable growth.

Profit forecast and rating.

We expect EPS to be 1 in 2019-2021.

36 yuan, 1.

76 yuan and 2.

32 yuan, corresponding estimates are about 41 times, 32 times and 24 times respectively.

Considering that Compaq’s growth is good, the non-biopharmaceutical sector has the potential for continuous improvement, maintaining the “overweight” rating.

Risk warning: the risk of drug prices falling; the risk of new drug approval progress is lower than expected.

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