Hualan Biological (002007) Annual Report Tracking: Steady Growth of Blood Products, 4-valent Flu Significantly Boosted Performance
Event: The company released its 2018 annual report.
The company achieved revenue of 32 in 2018.
170,000 yuan, an increase of 35 in ten years.
84%; realized net profit attributable to shareholders of listed companies11.
400,000 yuan, an increase of 38 in ten years.
83%; net profit deducted from non-attribution to 10 was realized.
20,000 yuan, an increase of 31 in ten years.
Implement EPS 1.
10 send 4 get 5.
In the fourth quarter of 2018, the company achieved revenue11.
81 ppm, an increase of 68 in ten years.
24%; net profit attributable to mother 3.
80 ppm, an increase of 88 in ten years.
34%; Realize deduction of non-attribution net profit3.
22 ppm, an increase of 68 in ten years.
85%, achieving EPS 0.
In terms of expenses, the selling expenses are 5.
380,000 yuan, an increase of 100 every year.
91%, mainly due to the increase in promotion consulting fees; management costs1.
82 ppm, an increase of 14 per year.
38%; R & D expenses1.
46 ppm, an increase of 13 per year.
17%; financial expenses 55.
50,000 yuan, an increase of 107 every year.
48%, mainly due to the increase in discount interest on bills in the current period.
Net operating cash flow increases by 628 annually.
58%, mainly due to the increase in cash received for sales of goods.
Net investment cash flow decreases by 1410 each year.
13%, mainly due to the increase in cash paid for investment.
Our Analysis and Judgment (1) The 4-valent flu has led to a faster performance and operating cash flow has improved significantly.
18 years company operating income 32.
1.7 billion (+35.
84%), realizing net profit attributable to mother 11.4 billion (+38.
83%), realizing a net deduction of non-attributed net profit of 10.
2 billion (+31.
Among them, the company achieved revenue 11 in the fourth quarter.
810,000 yuan (+68.
24%), realizing net profit attributable to mother 3.
8 billion (+88.
34%), realizing deducted non-attributed net profit3.
2.2 billion (+68.
The company’s fourth-quarter performance has improved significantly, and we believe it is mainly driven by the quadrivalent influenza vaccine.
The sales reform of blood products and the increase in sales of influenza vaccines have significantly increased sales expenses.
Report statutory selling expenses 5.
3.8 billion (+100.
9%), accounting for 16.
7%, an increase of 5 per year.
In addition, management costs are 1.
8.2 billion (+14.
4%), accounting for 5.
7%, a decrease of 1 per year.
R & D efforts continue to increase.
At the end of 18, the company had 523 R & D personnel, an increase of 55.
R & D funding1.
55 ppm, an 18-year increase.
Of which expensed expenses1.
460,000 yuan, an increase of 13 in ten years.
By business segment, blood products revenue was approximately 24.
08 million yuan, an increase of 15 in ten years.
89%; Revenue from vaccine business 7.
9.8 billion yuan, an annual increase of 183.
The company’s operating cash flow has improved significantly in 18 years.
9.3 billion, an increase of 628 every year.
58%. Accounts receivable stabilized, ending at 9.
10 ppm, an increase of 16 over the beginning of the period.
9%, accounting for 0% of total assets.
Among them, accounts receivable for blood products are about 3.
700 million, compared with 6 at the beginning of the period.
A significant reduction of 0.6 million yuan.
Inventory decreased at the end of the period, ending at 12.
04 trillion, compared with the beginning of 12.
110,000 yuan has decreased, and its proportion in total assets has fallen4.
(2) The overall growth of blood products has maintained steady growth, and there has been differentiation among varieties. The blood product business as a whole has maintained rapid growth, and marketing reforms have increased sales expenses.
The company’s blood products income for 18 years24.
08 million yuan, an increase of 15 in ten years.
We estimate that the sales revenue of 18Q4 blood products reached nearly 600 million, which is basically the same as the same period last year.
At the same time, the company’s blood product marketing reform was obvious (strengthening the sales team construction, increasing academic promotion efforts, and strengthening sales distribution to second- and third-tier cities and third-tier hospitals). As of the end of the reporting period, there were 220 sales staff, an increase of 19.
We estimate that the annual sales cost of blood products is about 2 trillion, an annual increase of about 160%.
Among them, the sales expense of blood products in the fourth quarter was about 90 million yuan, an increase of more than 70% from the previous quarter.
Accounts receivable for blood products decreased significantly from the beginning of the period: about 3 at the end of 18 years.
7 trillion, by comparison: the end of Q3 period is about 6.
270,000 天津夜网 yuan at the end of the second quarter 6.
80,000 yuan at the end of the first quarter 6.
8.2 billion, beginning of period 6.
In terms of pulp extraction volume and pulp station construction: We estimate that the two companies report that the pulp extraction volume is close to 1,000 tons.
At the same time, the pulp station in Lushan County has obtained a pulp collection certificate. There are currently 25 apheresis plasma stations, of which 4 are in Guangxi, 1 in Guizhou, 15 in Chongqing (including 6 sub-stations for plasma collection) and 5 in Henan.
It is expected that the pulp output in 19 years will exceed 1,100 tons.
In terms of varieties, the growth rate of albumin has been mutated for 18 years, and the static propane has continued to slump. The growth of coagulation factors and exemptions has accelerated significantly, and the product structure has been adjusted significantly.
Albumin sales revenue10.
2.5 billion (+11.
45%), gross profit margin 52.
53pp), income as a whole blood products 42.
18H1 revenue, gross profit margin and percentage were 4 respectively.
7.3 billion, 53.
62% and 41.
In terms of price, the average conversion price in 18 years exceeded 340 yuan, and 356 yuan in 17 years.
Jing Cing sales income 6.
0.4 billion (+10.
77%), gross margin of 60.
27pp), income accounted for 25% of total blood products.
18H1 revenue, gross profit margin and percentage were 2 respectively.
7.2 billion, 60.
69% and 23.
In terms of price, the average conversion price in 18 years was slightly over 500 yuan, and 514 yuan in 17 years.
Aggregate sales of clotting factors and exempt categories7.
7.9 billion (+61.
91%), gross profit margin is 65.
61pp), income accounted for 32 of blood products as a whole.
18H1 revenue, gross profit margin and percentage were 4 respectively.
1 million yuan, 65.
49% and 35.
0% of the company’s blood product batch issuance in 2018 is as follows: albumin batch issuance increased quarter by quarter, 18 years to achieve batch issue 253.
100,000 bottles (converted to 10g specifications), an annual increase of 7.
5%, accounting for 13 of domestic albumin batches issued.
The volume of pre-issued Jing Cing batches has improved.
Achieve batch issue 110.
60,000 bottles (take 2.
5g specification conversion), reducing 28 per year.
0%, accounting for 10.
Coagulation factors and exemptions (except for exemptions) are among the top in the industry.
According to the report summary, the company’s eight factors, PCC, human immunoglobulins, vaccinations and B exemptions accounted for 41 domestic approvals.
8% and 18.
9%, ranking first in the industry.
The exemption accounted for 17 of the domestic approvals.
6%, ranking second in the industry.
From the perspective of the number of batches issued, the eight factors achieved a batch of 64.
60,000 bottles (converted to 200IU specifications), an annual increase of 26.
1%; PCC achieved batch issuance 45.
60,000 bottles (converted to 200IU specifications), a reduction of 30 per year.
3%; Human Fibrin was issued in batches 7.
30,000 bottles (take 0.
5g specifications), an annual increase of 4.
2% is optimistic that the company’s blood products business will resume rapid growth in the future.
The company actively responded to the impact of the two-vote system through marketing reforms. The sales staff of the report scale grew rapidly, and the company’s sales layout and academic promotion efforts were strengthened. The cost of blood products sales increased significantly.
We believe that the company’s blood products business is expected to resume rapid growth for the following reasons: (1) The emerging events in Shanghai at the beginning of the year strengthened the supervision of the blood products industry, and the industry’s concentration has promoted further improvement.
(2) For albumin: from the beginning to the end of the year, the batch of imported albumin has been greatly reduced, the domestic production has increased slightly, and the terminal has raised prices.
(3) For Jing C: Due to the need to transport through the cold chain, the recovery speed is slower than albumin; resulting in a huge market space, the domestic per capita usage far exceeds that of foreign countries, and the potential for academic promotion is huge.
(4) The company is a domestic leader in blood products with complete product lines and strong ability to adjust product structure.
(3) The performance of the vaccine caused by the 4-valent influenza has improved, and it is expected to further boost the report that the performance of the vaccine subsidiary will turn around and improve, mainly due to the 4-valent influenza vaccine.
Reported that the legal vaccine subsidiary achieved operating income8.
30,000 yuan, an increase of 181 every year.
8%; net profit achieved 2.
70 ppm, an increase of 451 per year.
We believe that it is mainly due to the exclusive listing of the quadrivalent influenza vaccine.
In addition, we believe that the settlement price of trivalent influenza vaccine has improved and also contributed to the performance.
From the batch of issued data, the company’s AC polysaccharide vaccine (0.
5ml specifications) batch issued 123.
7%); hepatitis B vaccine (0.
5ml specifications) batch 174 issued.
5%); trivalent influenza vaccine (0.
5ml specifications) batch issued 213.
2%); trivalent influenza vaccine (0.
25ml specifications) batch 126 issued.
30,000 sticks (-45.
3%); 512 were issued for the quadrivalent influenza vaccine.
Reported a total of 852 issued for lethal company influenza vaccine approval.
30,000, accounting for 52 of the total number of national approvals.
We are optimistic that the company’s influenza vaccine business will further accelerate for the following reasons: (1) US market data proves that tetravalent influenza will effectively replace trivalent products.
The quadrivalent influenza vaccine was approved for marketing by the FDA in 2012. According to the prediction of the Centers for Disease Control and Prevention (CDC), about 1 will be produced in 2017-2018.
6.6 billion doses of influenza vaccine, of which about 1 is a quadrivalent influenza vaccine.
1.9 billion doses, accounting for up to 70-80%.
(2) In 19 years, the company has ample production time for the 4-valent influenza vaccine, and the number of approved issuance attempts to double.
Potential and even successful approval to market may also face problems such as insufficient production time.
(3) Influenza outbreaks have occurred in China for two consecutive years. The flu epidemic has continued to be valued, and mass awareness and demand for promotion have been promoted.
(4) From the perspective of approval and issuance, the company has approved the issuance of approximately 10 in the first quarter of the year.
50,000 pieces of trivalent influenza were approved and issued about 203.
40,000 pieces will be issued in the same period last year, which is expected to increase performance.
(IV) The development of monoclonal antibodies in order to advance the reported denizumab, ipilimumab and panitumumab was approved for clinical use.
The monoclonal antibody business is one of the company’s “three-wheel drive” development strategies.
The current overall research and development is progressing in an orderly manner: panitumumab was approved for clinical trials on July 16; ipilimumab and denitumumab were approved for clinical trials on October 10 and 11, respectively.
At present, a total of 7 monoclonal antibodies of the company have obtained clinical trial approvals, of which adalimumab, trastuzumab, rituximab, and bevacizumab are passing phase III clinical trials.
We are optimistic about the company’s layout in the area of monoclonal antibodies, and the rich product research team strives to contribute to the flexibility of performance.
Investment recommendations The company’s 18-year performance was slightly higher than expected, mainly due to the 4-valent influenza vaccine.
We are optimistic that the company’s future performance will maintain rapid growth.
First, we are optimistic that the company’s blood products business will resume rapid growth.
The company’s blood product marketing reform and reform continued to advance, and at the same time, the supervision of the blood product industry will be stricter after the emerging events in Shanghai.
As a steady leader in blood products, the company is committed to introducing the advantages of complete product lines and strong product structure adjustment capabilities, and to restore rapid growth.
Temperature, we are optimistic about the company’s vaccine business to maintain rapid growth driven by the flu vaccine.
The company’s 4-valent influenza vaccine has been in production for ample time since 19 years, and the epidemic of influenza infection has been erupting for a long time and it has been recognized that the accumulation rate is expected to increase and open up market space.
Finally, the R & D of the monoclonal antibody business is progressing smoothly, and the rich product research echelon is expected to contribute to the performance flexibility.
We expect net profit attributable to mothers to be 14 in 2019-2021.
86 trillion, corresponding to EPS 1.
23 yuan, corresponding PE is 28/24/20 times.
Maintain the “Recommended” level.
Risks suggest that the competition for quadrivalent influenza vaccines is intensifying; the progress of marketing reform of blood products is less than expected; the price of blood products declines more than expected; the risk of failure to develop monoclonal antibody drugs.