Sinopharm (600511): Increasing profit growth of refined hemp business promotes the company’s forecast to rise steadily

Sinopharm (600511): Increasing profit growth of refined hemp business promotes the company’s forecast to rise steadily

Core point of view: China Pharmaceutical Group’s Beijing distribution platform, the profit of refined hemp business in the first half of 2019 accounted for about 45%.

The company is the Beijing pharmaceutical distribution platform of China National Pharmaceutical Group.

In the first half of 2019, the distribution business accounted for about 90% of the revenue; the first-class wholesale business of refined linen had a gross profit margin of about 12-14% and strong profitability. The company has the best quality upstream refined linen industrial enterprise Yichang Renfu 20% equity, Sinopharm’s overall fine linen business profit accounted for about 45%.

  The whole industry chain of the fine linen business implements a fixed-point system with extremely high barriers to entry.

The only designated enterprises in China’s refined hemp products can participate, and the barriers to entry are extremely high.

The company builds a strong competitive advantage in the field of refined hemp: the company is one of the three first-class wholesalers of refined hemp products in the country, with a market share of more than 80% per year, and nearly two-thirds of the second-tier wholesalers belong to Sinopharm.Owns Qinghai Pharmaceutical 47.

1%, Yichang Renfu 20.

0% equity are all key manufacturers of refined hemp products.

  The volume of key new linen products will help promote the growth of the company’s linen business.

Yichang Renfu and Hengrui Medicine are the most competitive companies in the industry of refined hemp products: in the first half of 2019, revenue increased by 24.

45%, net profit increased by 21.

95%, the growth rate has an increasing trend; Hengrui 深圳桑拿网 Pharmaceutical Esketamine was approved in November 2019, which is the company’s most important new product in the field of hemp. Considering Hengrui ‘s current market influence and sales capacity in the field of hemp, we expectEsketamine will be released quickly.

The company’s fine linen wholesale business revenue and profit growth will increase.

  High barriers and high growth of the fine linen business, the performance in 19-21 were 2 respectively.

05, 2.

51, 3.

07 yuan / share.

  Calculate the corresponding price-earnings ratio based on the latest closing price of 13.
.

32 times, 10.

87 times, 8.

88 times.

We calculated based on segment estimates. The refined linen business and commercial sectors gave 21 times and 10 times PE estimates in 2020, respectively, and the company has a reasonable value of 36.

28 yuan / share, maintain BUY rating.

  risk warning.

The increase in the price reduction of volume procurement may have an impact on the overall growth of the industry; changes in the cost of funds caused by changes in interest rates; and the risk of increased regional competition.