Kelun Pharmaceutical (002422) 2018 Annual Report Review: New Product Volume Helps Maintain Faster Growth in Income
[Key points of investment]Kelun Pharmaceutical released the 2018 annual report, and the company realized operating income of 163.5.2 billion, an annual increase of 43%; net profit attributable to mothers12.1.3 billion, an increase of 62 in ten years.04%.EPS is 0.85 yuan / share. The volume of newly approved products helped the income side maintain a rapid growth.The company’s performance growth mainly comes from two aspects: 1) The optimization of the structure of large infusion products continues to 杭州桑拿网 advance.With the increase in the proportion of high-margin soft plastic products, the company’s infusion product structure continued to be optimized, and sales promotion efforts were strengthened. In 2018, the infusion segment achieved revenue of 98.800,000 yuan (+30 compared with the same period last year).37%), gross margin 71.18%, an increase of 7 per year.48pct; 2) Non-transfusion sector realized income 62.4.2 billion (+ 66% YoY).37%), gross profit margin 42.68%, an increase of 15 a year.07pct, which mainly refers to the capacity release of Chuanning project and the volume of non-infusion preparation products.Non-infusion preparation products achieved revenue of 28.5.7 billion (+ 51% YoY).14%), among which sales of plastic water injection and rehabilitation new liquid increased by 70.70%, 46.68%.In addition, it has been approved in 2017. In 2018, the standard entry of 7 key varieties such as Keruishu, Dortex, Dormont, etc. has been in good volume, of which Keruishu, Dormont, and Biolot respectively contributed sales revenue.1.3.5 billion, 1.3.9 billion, 2.08 million yuan, total sales of new drugs contributed sales revenue6.9.7 billion. The construction of specialty preparation channels has been increased, and sales expenses have increased significantly.The selling expenses for the whole year of 2018 were 59.8.7 billion (+ 94% YoY).78%), the selling expense ratios from 2018Q1, 2018Q2, 2018Q3, and 2018Q4 were 33.83%, 32.27%, 39.90%, 39.At 82%, the sales expense ratio in the second half increased by 6.8pct, mainly because the company increased the construction of specialized preparation sales team and sales channels.In addition, management costs are 8.3 billion (+12 year-on-year.54%), financial expenses 6.3.2 billion (+14 compared to the same period last year).10%), the overall expansion of the three fee index is stable. R & D expansion continued to grow, and a number of achievements were gradually realized to form a complementary virtuous circle.The company’s R & D intake in 2018 was 11.140,000 yuan (+31.74%), of which cost is 8.8.5 billion (+ 24% year-on-year.46%).The company continuously expands R & D investment to support the company’s research and development of multiple generic drugs and innovative drug projects. Among them, generic drugs achieved 12 production varieties approved in 2018, 14 production varieties were declared for application, 6 consistency products were approved for consistency evaluation, and consistency evaluation applications were submitted.Production of 13 is expected to be approved this year, such as davoxetine, sugandide gluconate, vardenafil and other trends. At the same time, a large number of projects for the consistency evaluation of injections have been established and are rapidly progressing.There are 8 varieties of innovative drugs entering the clinic. Cetuximab is in clinical phase III, PD-L1 clinical phase II, 6 clinical phase I including 1 VEGFR and 1 ADC.Four varieties will enter clinical stage I. [Investment suggestion]With reference to the sales expenses disclosed in the annual report, slightly increase the sales expenses. It is estimated that the operating income for 2019/2020/2021 will be 195.80/224.23/248.950,000 yuan, net profit attributable to mother is 15.97/19.37/22.2.5 billion (the original forecast for 2019/2010 was 16.29/20.6.5 billion) with a budget benefit of 1.11/1.35/1.55 yuan, corresponding to price / 杭州桑拿 earnings ratio of 23/19/16 times, maintain “Buy” rating, target price of 28.52 yuan. [Risk Tips]Competitive risks in the large infusion industry; product volume is less than expected; environmental protection risks.