Sinopharm (600511): The semi-annual report performance is significantly higher than expected

Sinopharm (600511): The semi-annual report performance is significantly higher than expected

Event: The company’s semi-annual report was announced, and the performance growth rate exceeded expectations.

H1 revenue in 2019 was 210.

2.2 billion, an increase of 11 in ten years.

99%, net profit attributable to mother realized 7.

55 ppm, an 18-year increase.

66%, deducting non-attributed mother 7.

2.8 billion, an annual increase of 14.

64%, the basic EPS achieves 0.

9872 yuan / share, an increase of 19 in ten years.

05%, the company’s net cash flow from operating activities 6.

910,000 yuan, an increase of 34 in ten years.


The speed-up effect of Q2 was obvious, and the income reached 109.

7.3 billion (13.

82% +), net profit attributable to mother realized 4.

6.8 billion (22.

85% +), deducting non-return to mother 4.

4.3 billion (16.

09% +), which are 3 higher than Q1.杭州夜网

8 tablets, 10 tablets

4, 3


Business transformation is setting off, driving the company’s growth faster than expected.

(1) Commercial distribution segment: 19H1 achieved revenue of 205.

09 billion, an increase of 12 in ten years.

6%, an increase of 4 faster than 18 years.


4pct, mainly benefited from the increase in the market share in Beijing, the rapid growth of the fine linen, equipment, and community sectors and the optimization of the variety structure.

In the first half of the year, the company strengthened the import of new products, new dating Eisai Haiwei (treatment of diabetes), Huaxi botulinum toxin, Pfizer Renjie, Beifu increased new specifications; innovative drugs expanded 15 varieties; (2) specialty drug business:The company’s narcotics business has entered the “marijuana” model. The narcotics distribution is expected to achieve a growth rate of more than 20% in the first half of the year, and the primary distribution market will always maintain a market share of more than 80%. In the narcotics industry, the equity-owned subsidiary Yichang Renfu achieved net profit 4.99 ppm, an increase of 21 in ten years.

7%, the expected contribution of refined linen (distribution + industry) accounted for 40% of the profit; (3) industrial sector: accelerate the transformation work.

Affected by the two-vote system, Guorui Pharmaceutical achieved revenue in 19H1.

62 ppm, a decrease of 12 per year.

8%, net profit of 26.55 million yuan, an annual increase of 10%; (4) device business: increase expansion efforts, the device segment is expected to achieve 20% + growth rate in the first half of the year; (5) community hospitals: direct sales business actively develop community innovative servicesIt is expected that the community hospital will achieve a 20% growth rate in the first half of the year.

Subsidiaries accelerated business adjustments and continued to improve performance.

The reorganization and integration of the company’s 19-year H1 performance improved significantly. State-controlled Beijing achieved revenue and net profit of 58 respectively.

7.5 billion (10.

3% +), 1.

3.8 billion (37.
2% +), mainly due to the high-speed growth of community hospitals and the “4 + 7” collectively-approved variety agency authorization, which further expands its advantages in pure sales in Beijing; State-controlled Tianxing achieved revenue and net profit29 respectively.
1.9 billion (14.

0% +), 90.05 million yuan (59.

3% +), mainly due to the improvement of the variety structure, the increase in the development of the equipment field and the active adjustment under policy changes.

Actively respond to the “4 + 7” centralized procurement and grasp the market potential of new drug launches.

According to the semi-annual report, the company currently ranks first among the 40 product regulations collected in Beijing, with 35 product specifications for distribution authorization; it has cooperated with Shanghai Anbisheng and Zhejiang Jingxin regional bidders to obtain montelukast sodium.Tablets, Rosuvastatin Calcium Tablets (10mg) Exclusive distribution qualification in Beijing.

In the first half of the year, 123 approved product regulations (including innovative drugs and generic drugs) have been approved, and the company has realized 42 cooperation, bringing incremental growth to the company.

Expenses were well controlled, cash flow improved significantly, and the decline in financing interest rates was positive for the commercial circulation sector.

H1 sales expense ratio was 2 in the first half of the year.

29%, a decline of 0 per year.

49pct, the overhead rate is 0.

87%, a decrease of 0 every year.

19pct, financial expense ratio is 0.

30%, a decline of 0 every year.

19pc, financial expenses 19H1 was 62.49 million yuan, a decrease of 31 over the previous year.

55%, mainly due to the reduction in bank loans and financing rates.

Accounts receivable turnover days 86.

55 days, estimated to decrease by 3 in the same period last year.

84 days, the shortening of the accounting period and the optimization of collection management led to a marked improvement in cash flow, and the company’s net cash flow from operating activities.

91 trillion, an increase of 34 over last year.


Investment recommendation: Buy-A investment rating, 6-month target price of 29.

25 yuan.

We expect the company’s revenue growth to be 11 in 2019-2021.

3%, 10.

7%, 10.

9%, net profit growth rate was 6 respectively.

1%, 15.

4%, 10.

9%; give Buy-A investment rating, 6-month target price is 29.

25 yuan, equivalent to 15 times the dynamic price-earnings ratio in 2019.

Risk Warning: Lower than expected lower financing costs; lower-than-expected improvement in cash flow; lower-than-expected completion of subsidiary performance