Jichuan Pharmaceutical (600566) 2018 Annual Report and 2019 First Quarterly Report Comments: Results Meet Expectations Continuous Development of OTC Channel Drives Profit Improvement


Jichuan Pharmaceutical (600566) 2018 Annual Report and 2019 First Quarterly Report Comments: Results Meet Expectations Continuous Development of OTC Channel Drives Profit Improvement

Investment Highlights: Event: The company released its 2018 annual report and achieved revenue of 72 in 2018.

08 billion yuan, an increase of 27.

76%; net profit attributable to mother 16.

8.8 billion yuan, an increase of 37.

96%; deducted non-net profit 15

9.3 billion yuan, an increase of 37.

98%.

Revenue in the first quarter of 2019 was 20.

7.9 billion, a decrease of 2.

26%, net profit attributable to mother 5.

1 billion yuan, an increase of 9.

28%, attributable to non-net profit4.

7.2 billion, an increase of 6.

06%.

Performance is in line with expectations.

Influenza factors led to high growth in 2018, and a high base resulted in slower growth in the first quarter of 2019.

In 2018, the company’s revenue and non-net profit growth increased by more than 7 respectively.

15 points and 9.

98pct, but the growth rate of revenue and non-net profit in the fourth quarter was only 16.

51% and 18.

93%, the lowest single quarter growth rate in the past 4 years, mainly related to the company’s control of the speed of delivery.

Overall, the company’s key varieties still achieved high-speed growth, and the heat-clearing and detoxifying products based on Pudilan achieved revenues of 31%.

9.5 billion yuan, an increase of 28.

77%; revenue from digestive products based on rabeprazole sodium enteric-coated capsules14.

4.8 billion yuan, an increase of 15.

59%; revenue from pediatric products mainly for pediatric products12.

4.6 billion yuan, an increase of 37.

76%; income from respiratory products3.

3.6 billion yuan, an increase of 38.

19%; usually protein ferric succinate also achieved a growth rate of more than 40%.

Among them, Pu Dilan, Rabeprazole and Pediatric Alice’s income increased by 0.

3pct 杭州夜生活网 to 77.

39%.

The company’s core products have maintained market leading advantages and have been selected into multiple medication guides. The company continues to expand OTC channels by leveraging the advantages of academic promotion and channel distribution. Breakthroughs in OTC channels are expected to become new growth points for the company.

As the outbreak of influenza in the first quarter of 2018 led to an increase in the quarterly performance base, revenue in the first quarter of this year continued to decline slightly.

26%, but still reached a scale of more than 20 ppm, and the CAGR of the last 4 years is still as high as 23.

14%, a small increase in non-net profit for ten years.

06%, the profit side performed better than expected, mainly because sales expenses were controlled. The company’s gross profit margins in the first quarter of 2018 and 2019 were 84.

79% and 85.

55%, basically stable, with net interest rates of 23 respectively.

42% and 24.

53%, up by 1 each year.

72pct and 2.

59pct, the first is the expansion of the pharmacy channel through sales expense subsidies, and the sales expense ratio was controlled, which decreased by 1 in 2018.

30 minutes to 50.

83%, down 1 in the first quarter of 2019.

18 points to 50.

89%.

Other financial indicators remained basically stable.

Investment advice: The company’s EPS is expected to be 2 in 2019-2021.

56,3.

11 and 3.

66 yuan, the current expected corresponding estimate is 14.

68, 12.

07 and 10.

28 times.

We are optimistic about the company’s future OTC channel development and the continuous heavy volume of core varieties, and raised to the “recommended” level.

Risk warning: Core product growth is less than expected risk; OTC channel expansion exceeds expected risk; drug price risk.