26/05/2020

Hualan Biological (002007): The blood products industry continues to recover and expects flu vaccine season performance

Hualan Biological (002007): The blood products industry continues to recover and expects flu vaccine season performance

The Q1-3 2019 results are in line with our expectations of Hualan Bio’s first three quarters of 2019 results: revenue 26.

$ 3.8 billion, an increase of 29 per year.

60%; net profit attributable to mother 9.

6.4 billion, an annual increase of 26.

89%, corresponding to a profit of 0.

69 yuan, performance in line with expectations.

  Development trend The industry continues to recover, and operating improvement inventories have fallen.

The company’s revenue and net profit increased by 29 in the first three quarters.

60%, 26.

89%; of which the third quarter income was 12.

3.6 billion, an annual increase of 48.

05%; net profit 4.

5.7 billion, an annual increase of 48.

96%, single quarter revenue and net profit are much higher than the first half, the industry continues to recover.

The high growth of revenue and net profit is maximized due to the low base last year, so we expect to have a certain relationship with the overall batch issuing cycle this year.

Inventory continued to improve, the company’s inventory in the first three quarters11.

9.2 billion, down 4 each year.

86%.

Q3 single quarter sales rate of 15.

61%, an increase of 1 over the same period last year.

11ppt, we expect to be related to the promotion of influenza vaccine in the third quarter.

  Issued Q3 in batches to resume and steadily sell.

The domestic approval and issuance of July and September resumed well, especially Jing Cing, which was approved in the third quarter46.

910,000 bottles (converted to 5g specifications), an increase of 65 over the same period last year.

13%; Affected by the base, albumin was approved in the third quarter of 64.

700,000 bottles (converted to 10g specifications), basically the same as last year, but compared to the first half, especially in the second quarter, there has been a clear recovery.

The business structure was adjusted, with a combined gross profit margin of 63 in the first three quarters.

41%, up 2 every year.

13ppt.

Blood products have recovered for two years, and vaccines will be the highlight in the second half of the year.

Blood products recovered in the two years of 2019-2020. We believe that the performance elasticity in 2019 comes from the improvement of the rate side after the improvement of the supply-demand relationship; the performance elasticity in 2020 comes from the increase in supply after active pulp extraction in 2019.

The company’s quadrivalent influenza vaccine is currently the only high-end vaccine approved in China. The flu vaccine volume in the second half of the season is highly expected.

  Earnings forecast and forecast remain unchanged. We expect EPS forecast for 2019/2020 to 1.

04 yuan, 1.

28 yuan, an annual increase of 27.

6% / 23.

9%, currently sustainable corresponding to 36 times / 29 times price-earnings ratio in 2019/2020.

Taking into account the recent improvement in the assessment of the pharmaceutical industry, we raise our target price by 12.50% to 45.

00 yuan, corresponding to 43 times / 35 times the P / E in 2019/2020, which 青岛夜网 has accumulated 21% upside compared with the previous one, and maintains the “Outperform Industry” rating.

  Risks Industry policy risks, volatility of vaccine sales.