Puluo Pharmaceutical (000739) 2019 First Quarterly Report Review: High performance growth, refined raw materials, strong CDMO, and rapid development of excellent preparation strategy

Puluo Pharmaceutical (000739) 2019 First Quarterly Report Review: High performance growth, refined raw materials, strong CDMO, and rapid development of excellent preparation strategy

Core point of view The company’s high-performance growth in the first quarter of 2019 is in line with expectations; the logic of volume and price rise continues to materialize, and overseas preparations export business opens a new blue ocean, and the coordinated development of preparations and APIs deserves long-term optimism; continue to recommend, upgrade to “buy”.

2019Q1 high growth performance, in line with expectations.

The company achieved revenue of 16 in 2019Q1.

75 ppm, an increase of 15 in ten years.

86%; net profit attributable to mother 1.

110,000 yuan, an increase of 64 in ten years.

62%; deduct non-attributed net profit1.

08 million yuan, an increase of 70 in ten years.

24%; net operating cash flow1.

80 ppm, a decrease of 10 per year.

77%; EPS0 achieved.

09 yuan, an annual increase of 64.


The company’s performance in the first quarter of 2019 increased rapidly, in line with expectations.

Profitability continued to improve, and the expense ratio improved significantly during the period.

Reported that the gross profit margin of first-tier companies increased by 0 in the short term.

95PCT to 31.

66%, profitability has continued to improve, and it is expected to benefit mainly from: ① the prices of cephalosporins, polymyxin sulfates, and hydroxy acids in large-scale varieties such as traditional APIs have risen; ② the reported RMB exchange rate is relatively weak,Interest rates have a positive effect.

Taking into account the CDMO sector’s gradual deadline for some business orders, and the existence of rising prices of raw materials to the order price, the company’s gross profit margin may still be underestimated. It is expected that the company’s gross profit margin will remain stable and increase, further verifying the industryThe logic of rising volume and price.

The reported company’s sales expense ratio increased by 0 due to the low-to-high turn of the preparation.

94PCT to 12.

20%; management expense ratio (including R & D) decreased by 1.

09PCT to 9.

63%, mainly benefiting from the company’s continuous integration of the management team, the operational efficiency impact brought by the division structure; the financial expense ratio fell to 0.

91PCT to 1.

26%, mainly due to the decrease in the annual average of reported temporary interest expenses and exchange losses.

Overseas formulation export business opens a new blue ocean, and long-term optimistic about the coordinated development of formulation + raw materials.

With the continuous tightening of domestic environmental protection policies, the profitability of the company’s dominant API business is trying to continue to improve.

In addition, the company’s overseas business sales accounted for 40% in 2018.

33%. The adjustment of export tax rebate rate will increase the proportion of overseas raw material exports and the increase of gross profit margin in the future, and gradually increase the company’s 2019 performance.

At present, the company’s bupropion hydrochloride sustained-release tablets have been applied for ANDA assessment in the United States. Through the perfect international raw material business marketing network and channels, the formulation export business of listed companies in 2019 will promote rapid development.

In addition, the company is committed to opening up the integrated layout of raw materials + preparations in the field of advantageous raw material varieties, and multiple high-end preparation varieties will promote their landing in the future.

The company is actively conducting consistency assessments for the domestic market. By the end of 2018, 16 varieties have been completed, of which 2 have been declared. The company’s internal preparation market is expected to be consolidated.

In the field of innovative drugs, sofadil’s phase II clinical trial has been completed.

After the division of the pharmaceutical distribution business, the company focused on making the industry stronger and stronger, and creating a path of coordinated development of preparations + APIs with long-term value.

Risk factors: Overseas export risks; CDMO strategy advances less than expected.

Investment suggestion: As a leading domestic manufacturer and exporter of chemical raw materials, the company’s forward-looking layout of CDMO and overseas preparation export business are expected to usher in new growth points.

Maintain the company’s EPS forecast for 2019-2021.42/0.


72 yuan, refer to comparable companies to give companies 30 times PE in 2019, and give target price of 12.

6 yuan, upgrade to “Buy” 杭州桑拿网 rating.