Tonghua Dongbao (600867) Interim Report 2019: Cash Flow Improves Insulin Glargine Expects Approval

Tonghua Dongbao (600867) Interim Report 2019: Cash Flow Improves Insulin Glargine Expects Approval
Performance was basically flat, and channel adjustments were basically completed. Tonghua Dongbao achieved revenue in the first half of the year14.35 billion (-1.96%), net profit attributable to mother 5.3.2 billion (-0.85%); second quarter revenue 7.20 billion (-3.2%), net profit attributable 佛山桑拿网 to mother 2.5.9 billion (-1.7%), the performance is basically the same as the same period last year.Net operating cash flow for the first half of the year was 5.7.8 billion (+27.26%), the significant improvement in cash flow indicates that the company’s business has improved, and the channel adjustment has basically been completed.Taking into account the base estimate resulting from destocking in the third quarter of last year, it is expected that this year’s performance growth will be around 15%. The diabetes business remained stable, and the revenue share further increased the revenue of the parent company in 2019H113.5.6 billion (+4.6%) and a net profit of 5.10 billion (+1.5%).Real estate business revenue of subsidiaries was 0.6.9 billion (-56.1%) and net profit of 22.37 million (-42.7%), unless there is a significant decline.We expect that the company’s main business of diabetes will maintain a high growth this year, and its proportion in total revenue will further increase. Insulin glargine is going to be marketed. Insulin glargine from a company with a wide range of diabetes medications has completed production site inspections and on-site sampling. The samples currently being sampled are in the review stage of the Chinese Academy of Sciences and are expected to be approved in the second half of this year.Registrations for insulin aspart, sitagliptin phosphate tablets, and sitagliptin dimethylbisbutyl tablets have been replaced and are expected to be approved in 2020.The company is widely distributed in three major areas of analogs, agonists and hypoglycemic agents. Risk reminder: The progress of insulin glargine market is less than expected, and the second-generation insulin growth rate conversion investment suggestions: rapid performance, wait for insulin glargine market, continue to recommend “buy” Tonghua Dongbao is an inevitable leader in China and has strong grassroots sales capabilities.After the second-generation insulin was adjusted through the channels, the growth pressure was released.The heavyweight insulin glargine is expected to be available this year and will open up new market space.The company’s extensive distribution of diabetes drugs will provide the company with continued growth momentum.Expected 2019?2021 company revenue 29.38/33.94/38.0.74 million yuan, an increase of 9 in ten years.1% / 15.5% / 14.2%, net profit 9.63/11.64/13.870,000 yuan, an increase of 14 in ten years.8% / 20.9% / 19.1%, corresponding to the current expected PE of 33.7/27.8/23.4x, continue to recommend “Buy”.