Lepu Medical: The performance of the mid-term report is outstanding | The mid- and long-term business layout is fruitful

Medical Network August 22

The company released a semi-annual report, realizing an operating income of 2.955 billion yuan, an increase of 35.37% over the same period of the previous year; achieving a net profit of 810 million yuan, an increase of 63.48% over the same period of last year; deducting investment income and asset impairment losses, etc. Non-homeless net profit increased by 36.67% year-on-year. At the same time, the company predicted that the net profit of the first three quarters of 2018 was 11.01-11.62 billion yuan, a year-on-year increase of 49-57%; the third quarter net profit of the mother was 2.92-3.52 billion yuan. In addition, the company released the first employee stock ownership plan (draft), the target of the company includes not less than 200 senior executives and core employees, and the total financial position of the company does not exceed 600 million yuan.

Deducting the investment income of the company's Australian Viralytics company's equity disposal of 150 million yuan, and the Dutch subsidiary ComedB.V.'s one-time loss of 32 million yuan due to the strategic synergy that failed to meet expectations, the net profit of non-returning mothers increased year-on-year. 36.67%; The company acquired 45% equity of New Donggang Pharmaceutical in the first half of this year, after deducting the consolidated profit generated by Xindonggang (consolidated in the second quarter, 18 years H1 net profit of 126 million yuan, net profit increased by 40.78%), we expect The company's endogenous growth rate exceeded 30%, in line with our expectations. The company's gross profit margin for the first half of the year was 72.80%, compared with 64.62% in 2017 and the annual report, 67.23% significantly improved, mainly due to the impact of two-vote system and scale expansion The cost is evenly distributed.

In the third quarter, the net profit of the mother returned to a high growth. The company predicts that the net profit of the mother in the first three quarters of 2018 will increase by 49-57% year-on-year. The net profit of the third quarter will increase by 20%-45% year-on-year. After the recurring profit and loss, the net profit growth rate of non-returning mothers in the first three quarters was 35-45%, of which the net profit growth rate of non-returning mothers in the third quarter was 35-55%, maintaining a high endogenous growth rate.

medical instruments The sector is still the company with the largest weight of the company (revenue accounted for 47%), the interim report realized operating income of 1.396 billion yuan, an increase of 15.56%; net profit of 442 million yuan, an increase of 20.55%, compared with 2017 annual report and 2017 H1 17% of the products have improved. In terms of products, the business of the stent business achieved 712 million yuan, an increase of 20.76% year-on-year, of which Nano sales accounted for 45%; the occluder business realized operating income of 60.53 million yuan, an increase of 22.88 %, the market share is expected to increase; the in vitro diagnostic business realized operating income of 151 million yuan, an increase of 23.45%, of which POCT and thromboelastography are fist products; hospital Interventional treatment and cardiovascular department cooperation business achieved operating income of 271 million yuan, an increase of 1.81%, mainly due to short-term distribution model adjustment; surgical equipment such as stapler achieved operating income of 130 million yuan, an increase of 41.75%, market share further Upgrade.

The research product layout is rich, and it is about to enter the harvest period. The 2-year clinical data of Neovas degradable stent published in the first half of the year is very good. It can compare the Abbott Xience stent, which is the most difficult challenge in the world. We expect the company's biodegradable stent to be in the second half of the year. Approved, it is expected to grow into the company's largest profit source product in the next 3-5 years. Other research products, we expect the left atrial appendage occlusion device will be approved next year, the clinical trial of degradable occluder is progressing smoothly, AI heart Electrical products have been submitted to the US, Europe and China for registration.

drug The sector is currently the fastest growing segment. In the first half of the year, it achieved operating income of 1.428 billion yuan, a year-on-year increase of 70.63%, and a net profit of 435 million yuan, a year-on-year increase of 70.71%, which was the same as the 2017 annual report and the semi-annual report of 71%. See, clopidogrel hydrogen sulfate tablets achieved operating income of 566 million yuan, an increase of 70.50%, winning the province to 29; atorvastatin calcium achieved operating income of 362 million yuan, an increase of 146.89%, July 17, 2018 Both the 20mg and 10mg specifications passed the consistency evaluation, and the import substitution will be further accelerated.

The company's strategic layout in the pharmaceutical field is forward-looking and is expected to achieve overtaking. The company has already laid out all the major categories of cardiovascular drugs. The joint marketing of multiple products has diluted the marketing costs of a single product. OTC The company has formed a strong competitive advantage; the company attaches great importance to the consistency evaluation work. With the gradual promotion of medical insurance control fees and consistency evaluation policies, the company is expected to accelerate import substitution and achieve overtaking in the hospital. Smooth, clopidogrel 75mg and 25mg products have been submitted to the CDE for consistency evaluation in June, is expected to be approved in the second half; amlodipine besylate has completed clinical trials, valsartan is in clinical trial stage. In terms of pharmaceutical products, exenatide is in the registration stage, and insulin glargine is expected to be declared within the year. Both products are expected to be approved next year. The company has broken through the difficult production barrier of insulin, and the yield and purity have been reached. Industry leading level; Alogliptin benzoate and alogliptin tablets (DPP-4 inhibitors) BE experiments have been completed and production has been completed, and calpagliflozin and cagliflozin tablets (SGLT-2 inhibitors) are underway BE experiment.

The field of tumor immunotherapy is a new kinetic energy for the company's rapid growth in the next five years. At present, it has invested in a number of mainstream technology pathways for tumor immunotherapy and precision diagnosis and treatment projects on a global scale. The investment results are fruitful. Lepu Bio PD-1 has Completed the clinical phase, the clinical results were excellent, and entered the second phase of the clinical phase; Binhui Bio-recombinant human GM-CSF oncolytic type II herpes simplex virus (OH2) injection (Vero cells) has obtained the national drug clinical trial approval; Junshi Bio PD-1 has been accepted by CFDA for new drug application. Its clinical data is excellent, and it is expected to be the first production registration in China. At the same time, Junshi Bio intends to go to Hong Kong IPO, and related work is underway.

The company has successfully expanded from the initial cardiovascular device business to the cardiovascular drug field. In recent years, the company has achieved fruitful results in the deployment of oncology drugs. We believe that the company has grown into a large health platform. enterprise Platform barriers are gradually emerging. In terms of business layout, the company pays attention to balancing the cyclicality and complementarity of each business segment. The short-term business has entered the harvest period, and the long-term business layout reflects good development potential: In the short term, the degradable stent is obtained. Batch, multiple drugs will contribute to the performance increase through consistency evaluation; In the long run, AI ECG products, insulin and oncology drugs will provide the company's long-term performance momentum. In terms of talent management, the company plans to implement the first employee stock ownership plan. By fully mobilizing the enthusiasm and creativity of employees, attracting and retaining outstanding management talents and business backbones will provide guarantee for the stable development of the business.

Sales expenses increased by 69.84% year-on-year, mainly due to the integration of the drug sales platform, the configuration of the sales team and the investment in marketing. The management expenses increased by 60.89%, mainly because the company continued to improve its overall competitiveness through R&D investment. During the reporting period, the amount of research and development expenses increased year-on-year; financial expenses increased by 173.55% year-on-year, mainly due to the increase in interest expenses during the reporting period due to the expansion of financing scales such as the issuance of bonds by the company; the net cash flow from investment activities was Increased by 93.64%, mainly due to the increase in investment in fixed assets, intangible assets, acquisition and capital increase, investment in available-for-sale financial assets, etc.; net cash flow from financing activities increased by 250.25% year-on-year Mainly due to the company's bank deposits and the issuance of bond financing inflows of 2.1 billion yuan, which offset the payment of 1.05 billion yuan paid by the holding subsidiary Xindonggang, which increased the net inflow of financing by 980 million yuan.

We expect the company's operating income to increase by 33.9%/31.0%/28.5% from 2018 to 2020, net profit at home increased by 48.8%/31.3%/29.7%, PE was 43.2/32.7/25.3 times, maintaining Buy rating. .