WuXi PharmaTech (603259): Strong revenue growth empowers platform with obvious advantages
Event On April 30, WuXi AppTec released the 2019 first quarter report, realizing revenue, net profit attributable to mothers, and net profit attributable to mothers after deduction of 27 respectively.6.9 billion, 3.8.6 billion and 4.950,000 yuan, ranking 29 in the same period in 2018 respectively.31%, 32.97% and 87.54%, the company’s adjusted non-IFRS net profit attributable to mothers further increased 28.3%, the first quarter achieved EPS of 0.33 yuan / share. Brief comment on the first quarter of strong revenue growth, strong investment income, adjusted profit margins and income basically matched the company’s strong revenue growth, while the same period last year increased.31%, slightly higher than expected. At present, the domestic new drug research and development market is hot, and it is expected that the average price of the company’s other main businesses will maintain a good growth; in terms of profit, the company’s net profit will increase.97%, net profit after deducting non-attribution to mothers increased by 87.5%, the difference in caliber is mainly due to the decline in the fair value of the company’s investment in UnityBiotechnology, etc. (about 1).USD 8.9 billion, and investment income from joint ventures’ commitment capital (2.1.1 billion, mainly due to the income obtained from the IPO of Cornerstone Pharmaceuticals Hong Kong Stocks). The two projects are distributed online and are basically offset. Investment income is recorded in ordinary profit and loss, and changes in fair value are recorded in non-recurring profit and loss.There is a convergence difference between the caliber of the female and the female who does not belong to the female.Excluding the effects of equity incentives, exchange rate fluctuations, and investment income, the company’s adjusted non-IFRS return to net profit is 5.19 ppm, an increase of 28 in ten years.30%, basically matching the growth rate of income. The company realized operating cash flow in the first quarter.90 million US dollars, compared to -3169 million US dollars in the same period last year, achieving growth growth, mainly due to the growth of main business and stable cash flow, meanwhile, in the first quarter of last year, the tax base was paid for the PDS part of Hequan Pharmaceutical, so the base was small.The company’s overall gross profit margin was 38.14%, a decrease of 0 compared to the same period last year.96 units. In terms of expenses, the company achieved sales in the first quarter (1.0.5 billion, +43.58%), management (2.95 billion, +47.49%), R & D (1.12 billion, +61.89%), finance (1.2.6 billion, -8.80%) expense ratios are 3.78%, 10.65%, 4.03% and 4.56% year-on-year growth of 0.38, 1.31, 0.81 and decrease by 1.90 units.Among them, sales, management, and research and development expenses continue to increase, related to the increase in the number of related personnel and investment; management costs also include 32 million in the first quarter of the distribution of incentive costs.In addition, the relatively relatively improved financial costs of exchange rate fluctuations have declined, and the overall cost of the period has been basically stable compared with the same period last year. In the main business, we expect the company’s revenue to maintain a strong and steady growth, and continue to expand the scale of production 深圳桑拿网 capacity, research and development projects, and build the foundation for subsequent business improvement: ① China’s laboratories are expected to maintain stable overall growth.The drug discovery and analysis and testing business continued to grow steadily. At the same time, along with the service fee + gradual growth model of the DDSU department, the Qidong R & D Center officially launched operations in the first quarter, gradually generating growth momentum replacement; ② The company’s clinical CRO is in the early rapid improvement stage, and the SMO business is growing.Strong, CMO / CDMO benefit from heavy commercialization projects and early project extensions. We expect clinical CRO revenue growth to exceed 50% in the first quarter, CMO / CDMO growth to exceed 40%, and two high-growth sectors are expected to contribute to overall performance.It has a pulling effect; ③ In the laboratory business in the United States, the device testing business gradually improved year by year due to the impact of customer churn, and the cell therapy CDMO business is also in a rapid growth stage. It is expected that there will be significant improvement in the first quarter and this year. Participation: The company’s current investment in R & D has increased due to new production capacity, new business, personnel development, and the advancement of R & D in some joint ventures.For example, the company’s increased investment in equity incentives, the expansion of its total production capacity, the construction of cell therapy GMP bases in Wuxi and Philadelphia, and major products such as Wuxi MedImmune and WuXi Juno are all promoting phase II clinical improvement, with some improvements. Outside of the main business: The platform has obvious advantages, huge investment income and returns, and actively engages in cross-sector cooperation to invest extensively in high-quality pharmaceutical fields and obtain investment returns.Based on its main pharmaceutical outsourcing platform, WuXi AppTec has established a comprehensive and healthy ecosystem.The company has invested in companies in the pharmaceutical field through relevant investment platforms, and has built a sound large health ecosystem, which has also brought generous investment returns for the company.The investment in Hualing, Unity Biotechnology, Cornerstone and other companies has brought substantial investment income for WuXi. Recently, the company has a clear medical treatment (joint venture). Jinxin Fertility has submitted a listing application to the Hong Kong Stock Exchange.Models promote continuity. Establish a large health ecosystem and actively carry out cross-domain cooperation.The company actively cooperates with companies in various fields to establish joint ventures to provide forward-looking coverage of emerging businesses.WuXi PharmaTech has established joint ventures with well-known multinational companies, such as WuXi Juno, CLP WuXi, WuxiMedImmune, etc., mainly for the development of big data and innovative therapies.Although these companies are still in the development stage, they have huge potential in the future and are an important part of WuXi AppTec’s great health ecosystem. It will bring rich resources and performance bonuses to the company in the future. The follow-up companies are expected to further strengthen clinicalCapacity building of platforms such as trials. The service fee + step-by-step model continued to advance, and fully enjoyed the domestic R & D bonus for innovative drugs.The company’s internal new drug research and development department (DDSU) has developed rapidly. In 2018, the company completed 27 IND declarations, obtained 17 CTAs, and obtained revenues of 16.8 million yuan.At present, most of the company’s projects are still in the early development stage. The continuous progress of the subsequent gradual projects and the coordination of the company’s business platform will gradually achieve rapid revenue growth, adding momentum to the company’s future sustainable development. Acquisition of minority shareholders ‘equity in Hequan Pharmaceuticals, further integration of business platform advantages. The company has decided to delist the holding subsidiary Hequan Pharmaceuticals on the New Third Board, and acquire its minority shareholders’ equity, which has added a certain value to the net profit of Wuming Kangde’s return to motherhood.thick.Although Democracy Pharmaceuticals is also a subsidiary of WuXi AppTec, it will often need to be separated in terms of longer and receiving orders. After this further completion of equity acquisition, there can be more and more convenient full-process signing and business.The synergy opportunities also help the internal business synergy of various departments, and help WuXi PharmaTech’s overall integrated business operation, fully reflecting the advantages of WuXi Pharma’s small molecule field from drug discovery to commercial production of a full-service coverage platform. The domestic pharmaceutical outsourcing leading platform has obvious advantages, and enjoys the overvalued premium WuXi AppTec’s pharmaceutical outsourcing business has achieved full industry chain coverage, thereby expanding its business strength and scale to the domestic leading scale.At present, domestic enterprises are accumulating momentum for transformation and upgrading. The domestic pharmaceutical outsourcing industry will usher in a golden period of development. WuXi PharmaTech provides one-stop innovative drug services to meet the needs of domestic enterprises. In this context, the expansion of the pharmaceutical industry has priority to benefit.We believe that the source of the company’s overestimated premium lies in: ① the world’s strongest ability to integrate resources in the industry: the advantages of transferring platforms have the ability to integrate global resources, which are obviously contradictory; ② the vision of excellent forward-looking layout: continuous forward-looking in the development processEmerging business layout to consolidate the future industry leadership pattern; ③ integrated business model: provide integrated services from early drug development to production, with the best order and customer stickiness in the industry; ④ platform incubation capabilities: establish “capital”, research and development,”Integrated production platform” has excellent innovation incubation capabilities; ⑤ Industrial capital recognition and synergy: It has a high degree of recognition within the pharmaceutical and capital industries and has a synergistic effect on business development. Earnings forecast and investment rating take into account the impact of various aspects, we expect that WuXi PharmaTech’s net profit attributable to mothers will be 21 in 2019-2021.300 million, 26.7 ppm and 34.400 million yuan, the corresponding growth rate is -5.6%, 25.3% and 28.6%; if the impact of changes in fair value is not considered, the growth rate of net profit attributable to the parent is estimated to be approximately 23.2%, 28.3% and 29.3%, maintaining the “overweight” rating. Risks suggest that investment income fluctuates significantly; the number of new drug developments is less than expected; fierce competition in the industry; the impact of Sino-US trade and exchange rate changes.

Bright Dairy (600597) Third Quarterly Report Review: Room temperature products stopped falling and rebounded, revenue accelerated significantly

Event company 9M19 achieved revenue of 171.

3.7 billion, +8 a year.

25%, net profit attributable to mother 4.

4.4 billion, +11 per year.

27%, of which 60 in 19Q3.

4.7 billion yuan, +21 per year.

10%, net profit attributable to mother 0.

7.7 billion, +29 in ten years.

98%.

The initial gain is zero.

36 yuan.

　　Investment points Normal temperature products stopped falling and rebounded, and low temperature performance was considerable. Q3 revenue growth significantly increased.

The company’s 9M19 achieved revenue of 171.

3.7 billion, +8 a year.

25% (first quarter: +5.

51%; second quarter: +1.

12%; Q3: +18.

86%).

In terms of categories, the company’s 9M19 liquid milk / other dairy products / breeding products accounted for 60.

67% / 27.

92% / 8.

10%, ten years +8.

8% / + 21.

43% /-27.

17%, of which 19Q3 + 17 are ten years.

23% / + 28.

38% / + 0.

twenty three%.

The speed of liquid milk has increased significantly, mainly because room temperature products have achieved efficiency improvements after the adjustment of the business unit leadership, including Moslien, You +, and other large room temperature products have achieved positive growth in the third quarter.Flat (19H1 is 12% for hypertension).

In addition, the low-temperature products also maintained a good growth trend in the first half of the year, and are expected to grow by more than 10% in 19Q3 (of which single products such as truthfulness have achieved more than 50% growth).

In terms of channels, the company’s 9M19 direct sales / dealers accounted for 28.

12% / 68.

84%, revenue +5 for ten years.

17% / + 14.

42%.

By region, the company 9M19 Shanghai / field / overseas accounted for 26.

13% / 52.

47% / 21.41%, revenue +13 for ten years.

41% /-0.

14% / + 26.

09%.

Dealer budgets in Shanghai / fields increased by 149/444 in the current period, totaling 4,208.

　　Gross margin continued to be under pressure, and fee control helped 3Q’s profit improvement.

The company’s gross profit margin for 9M19 was 32.

20% (first quarter: 32.

24%, second quarter: 33.

34%, Q3: 31.

11%), at least -1.

33pct, where Q3 is at least -2.

54 points are mainly due to: 1) raw milk price rises by 5% every quarter, and costs are under upward pressure; 2) relatively low gross profit of the new Wright business increased the proportion of revenue, resulting in lower overall gross profit margin.

In 19Q3, the company’s sales / management / R & D / financial expense ratios were 23 respectively.

66% / 3.

37% / 0.

31% / 0.

42% each year -3.

09pct / + 0.

18pct / -0.

02pct / -0.

25 points.

The increase in the sales expense ratio has clearly landed. We judge that the company has optimized its marketing methods and narrowed its advertising expenses. The company’s expense ratio as a whole declined in 19Q3.

18pct, offsetting gross margin pressure.

Company 9M19 achieved net profit attributable to mother 4.

4.4 billion, +11 per year.

27% (first quarter: 4.

03%, second quarter: +10.

75%, third quarter: +29.

98%), 9M19 net profit is 3.

58%, of which Q3 net margin reached 1.

71%.

It is worth pointing out that the company’s non-current asset disposal losses in 19Q3 decreased by 3271 every year.

260,000 yuan, 19Q3 after deducting non-attribution to the mother’s net profit for two years +12.

09%.

　　Overall optimization of products and channels; internationalization process is still advancing.

New reserve products are expected to be launched in 19H2: The company launched the “Yinduoduo” series of flavored fermented milk in 19 years, leading to the promotion of new products such as Youjuanshan fresh milk. It is expected to boost dairy revenue and gross profit margin; strengthen channel controlPower: The company promotes the implementation of CRM projects. It will use mobile terminal systems to strengthen the frequency of visits to terminal outlets, directly establish customer service relationships with terminal outlets, control related data of terminal outlets, use big data to guide terminal sales, and strive to improve sales outlets.Single point of effort.

Promote internationalization in an all-round way: In the future, the company will rely on the overseas subsidiary New Zealand New Light and the hosting company Israel TNUVA Group to play the synergistic role of the three markets of China, Israel and New Zealand, increase the proportion of overseas business revenue, and meet the global market and Chinese demand.

It is worth pointing out that 18H1 New Wright reached an agreement with important customers, extended the exclusive supply agreement, and reached a 10-year liquid dairy supply agreement with New Zealand South Island Food Co., Ltd., gradually opening up the liquid milk business layout and pursuing future revenueAccelerate growth.

　　Profit forecasting and investment advice The company is a leading dairy product company, with considerable growth in the overseas market. At the same time, its 杭州夜网论坛 product upgrades and price increases capabilities, and its performance promotes steady and good performance.Based on the company’s third quarter report, we raised the company’s profit forecast and expect the company’s 2019 revenue to be 229.

1.6 billion yuan (+9 per year).

2%), with a net profit of 4.

8.5 billion (+41.

9%), corresponding to the closing price on October 28, 2019, which is estimated to be 26x, and maintains a “prudent increase” rating.

　　Risks prompt increased industry competition, rising raw material costs, and food safety issues