Hengrui Pharmaceutical (600276) Tracking of the First Quarterly Report: Performance Maintained Steady and Rapid Growth R & D Expansion Continued Growth
Event: The company released the first quarter of 2019 report.
Revenue in the first quarter of 2019 was 49.
6.7 billion, an annual increase of 28.
77%; net profit 失败:重查 attributable to shareholders of listed companies11.
930,000 yuan, an increase of 25 in ten years.
61%; net profit after deducting non-return to mothers11.
55 ppm, an increase of 27 in ten years.
76%; EPS 0 achieved.
In terms of expenses and assets, R & D expenses6.
62 ppm, an increase of 56 in ten years.
67%; selling expenses 17.
76 ppm, an increase of 26 in ten years.
95%; administrative expenses 4.
48 ppm, an increase of 20 in ten years.
48%; Finance costs -572.
770,000 yuan, an annual increase of 75.
Equity investment at the end of the period increased by 5900% from the beginning of the period, mainly due to reports and investment in Xiamen Yelian Health Industry Investment Partnership; long-term deferred expenses increased by 50 from the beginning of the period.
95%, mainly due to Fujian Shengdi, Suzhou Shengdia plant decoration costs increased.
Net operating cash flow 4.
27 ppm, a reduction of 13 per year.
Our analysis and judgment (1) The growth rate of performance is in line with expectations. The anti-tumor and contrast agent business maintained rapid growth. The first quarter results maintained steady growth. Due to the increase in R & D investment, the growth rate on the profit side was slightly lower than the income side.
The company’s revenue for the first quarter of 2019 was 49.
6.7 billion (+28.
77%), net profit attributable to mother 11.
9.3 billion (+25.
61%), deducting non-attributed net profit11.
5.5 billion (+27.
76%), the growth rate on the profit side is slightly lower than the growth rate on the income side, and we believe that the increase in research and development led to a slight increase in the expense ratio during the period (+1.
The scale of the report, the company continued to increase research and development investment in innovative drugs, and research and development costs increased significantly (+56.
In addition, the financial expense ratio also increased slightly (+0.
50pp). The anti-tumor and contrast agent business maintained rapid growth.
The company’s product structure is rich, and its anti-tumor, contrast agent and other business segments have maintained domestic leading positions.
Among them, we believe that the growth rate of antitumor drugs and contrast agents Q1 exceeded 30% and that of anesthesia exceeded 20%.
(2) The blockbuster product PD-1 is expected to be approved in 19H1. The combined use of Apatinib and Apatinib is expected to have a huge PD-1 monoclonal antibody market in the future, and the sales of K and O drugs will increase rapidly after they are launched.
Merck’s Keytruda was launched in 2014 and is currently approved for indications including advanced non-small cell lung cancer, advanced melanoma, metastatic head and neck cancer, classic Hodgkin lymphoma, urothelial cancer, digestive tract cancer, cervical cancer, B-cell lymphoma, highly microsatellite unstable solid tumors, etc., has been set to 71 in 2018.
$ 7.1 billion.
Opdivo, a similar product of BMS, was also approved for listing in 2014, reaching 67 in 2018.
$ 3.5 billion.
At present, the indications for K and O drugs are still expanding, and it is expected to exceed 10 billion US dollars in 2019.
Karelizumab has completed the review of supplementary information and is expected to be approved in 19H1, becoming the third domestically produced PD-1 monoclonal antibody.
Carelizumab for injection is a humanized anti-PD-1 antibody that can bind to the human PD-1 receptor and block the PD-1 / PD-L1 pathway, restore the body’s anti-tumor immunity, and form cancerBasics of immunotherapy.
It is mainly applicable to regenerative / refractory classic Hodgkin’s lymphoma that has often received at least second-line systemic therapy (including autologous hematopoietic stem cell transplantation).
The company ‘s PD-1 monoclonal antibody was separately listed on the CDE priority review list on April 23, 2018. At present, the company has completed the review of supplementary information. The indication is Hodgkin’s lymphoma, and it is expected to be approved in H1 in 19 years.
Prior to this, Junshi and Cinda’s PD-1 mAbs have been approved for marketing in December 18, with indications of melanoma and Hodgkin lymphoma, and Hengrui’s Karelizumab is expected to be domestically produced.The third PD-1 monoclonal antibody approved for marketing.
At the same time, the company’s PD-1 production capacity is continuously expanding, combined with the advantages of the sales division, if it is successfully listed, it will promote rapid volume expansion.
In addition, Carrelizumab has multiple indications in clinical trials.
With reference to published trial progress and related data, Karelizumab has achieved excellent test results in indications such as second-line liver cancer, first-line nasopharyngeal cancer, second-line esophageal cancer, and first-line non-squamous non-small cell lung cancer.
Current indications for phase III clinical studies include liver cancer, esophageal cancer, non-small cell lung cancer, and nasopharyngeal cancer.
The combination of PD-1 / PD-L1 based drugs has become a hot spot in tumor immunotherapy. The combination of carelizumab and apatinib can be expected in the future.
Karelizumab combined with apatinib has improved the response rate to advanced lung cancer, gastric cancer and liver cancer to a certain extent. Among them, the treatment effect of liver cancer is the most ideal. At present, all the clinical schemes for the first-line treatment of advanced liver cancer have been approved by the FDAMulti-center clinical phase III trials can be launched.
In addition, Karelizumab combined with apatinib for clinical trial applications for advanced hepatocellular carcinoma (HCC) has also been approved by the CFDA.
In the competition, the full autonomy of Apatinib will become the advantageous advantage of Hengrui.
We believe that the company’s carizolizumab is even slightly behind the domestic counterparts for its approval, but it will take advantage of its advanced development of multiple indications, combined use of drugs, and a strong anti-cancer drug promotion and sales team to achieve rapid development after approval.Heavy volume.
(3) R & D investment continued to grow, and innovation capabilities led domestic companies to have a competitive advantage in R & D, and innovation capabilities led China.
Mainly reflected in: (1) R & D expansion continued to grow.
In terms of absolute R & D approval, R & D investment in the first quarter of 20196.
62 ppm, an increase of 56 in ten years.
57%; from the perspective of revenue ratio, the ratio of R & D investment / revenue in the first quarter of 2019 was 13.
32%, has been in a leading position among domestic pharmaceutical companies.
(2) Rich variety of R & D pipelines.
The company has basically formed a benign development trend in which innovative drugs are applied for clinical trials every year and every 2-3 years.
Thiperifilastine injection, pirlotinib maleate tablets have been approved for marketing, INS068 injection, SHR0302 tablets, SHR0410 injections have been approved for overseas clinical trials, PD-1 mAb, remazol tosylateLun is divided into CDE priority approval list, and it is likely that it will be approved for listing in 2019.
(3) Strengthen the construction of R & D teams.
The company has built a R & D team with more than 3,000 people, including more than 2,000 doctors, masters and more than 100 foreign employees, and has R & D centers in the United States, Japan and China.
We believe that the company’s continuous investment in research and development will strongly support the company’s project research and development, ensure continuous technological innovation, and help the company’s long-term sustainable development.
Investment recommendations The company’s first quarter 2019 results are in line with expectations, and we continue to be optimistic about the company’s future development prospects.
The company is an absolute leader in domestic pharmaceutical innovation, and has overlapped and led in anti-tumor, anesthesia, contrast agents and other fields.
In terms of domestic business, the company ‘s heavy new drugs, Apatinib, Irecoxib, have achieved high-speed volume, Thipefigelastine Injection, and Pirostatinib Maleate have been approved for marketing.The advantages of the company’s sales force quickly increased.
At the same time, Karelizumab was given priority review list, with a high probability of approval in 19 years, which is expected to further increase performance.
In terms of international business, the company’s international strategic layout continues to advance, and the formulation export business is expected to contribute to performance flexibility.
Free radicals, products represented by cyclophosphamide continued to contribute steadily, and iodixanol injections were approved for overseas listing.
At the same time, the company’s internationalization of innovative drugs is also continuing. Karelizumab combined with apatinib for first-line treatment of advanced liver cancer has been approved 天津夜网 by the FDA. Global multi-center clinical phase III trials canstart up.
We are optimistic about the company’s future performance to maintain rapid growth, and predict that the net profit attributable to mothers in 2019-2021 will be 53.
500,000 yuan, the corresponding EPS is 1.
87 yuan, corresponding to PE is 54/43/35 times.
Risks prompt increased competition in the industry; risk of loss of core technical staff; capacity expansion is less than expected.