Menova (603538): Preparations of bulk drug prices and prices rise, preparations are ready
The report reads that the rise in volume and price of Varsartan products is the main factor driving the company’s short-term performance growth. The stockpile of APIs and the R & D pipeline for preparations are the cornerstones to support the company’s continued growth. Benefits of investment: The industry’s prosperity has improved, and the company’s valsartan products are expected to usher in the golden development period. The company’s blood pressure business is one of the company’s core driving forces. Valsartan APIs are the company’s main blood pressure products, and are mainly sold to Europe.And other regulated markets, sales volume is increasing.Sales in 2018 were around 140 tons.In the “Valsartan Incident” in 2018, most domestic valsartan producers contradicted overseas sales, and the industrial layout 合肥夜网 shifted. The price of valsartan bulk medicines rose sharply, rising from around 600 yuan / kg in 2018 to 1900.RMB / KG.We expect that the industrial structure of Valsartan will maintain a state of supply less than demand in the past two years, and return to stable supply in 2021.The product quality of Menova valsartan has passed, and it has become a major domestic exporter of valsartan after the “event”, and the company’s new valsartan capacity will soon be put into use. The company’s current valsartan output is about 270 tons, and it is expected to expand to 470 tons in the future.Around the next three years, it is expected that the volume and price will rise.We believe that the market does not expect Valsartan to further increase the price, market inventory consumption is nearing the bottom, and in the short term, the expansion of production capacity completely replaces the gap, and Valsartan has room for further price increase. Based on the advantages of APIs, the company has strong R & D capabilities in multi-directional R & D and new product development. At present, the company has obtained 95 invention patents and a number of international or domestic leading research results, and has successfully developed and produced valsartan, rosuvastatin, Azerbaijan.APIs and intermediates for blockbuster drugs such as atorvastatin, clopidogrel and esomeprazole.In 2018, the company’s main products valsartan, clopidogrel, perindopril tert-butylamine salt, vitagliptin, pregabalin, esmeprazole, and duloxetine were registered in the CDE, of which valsarTan and duloxetine APIs have passed the CDE technical review; esomeprazole trihydrate and duloxetine APIs have obtained the EU CEP certificate; mirtazapine and Rebapatin received the Japanese PMDA’s MF certificate.The company’s existing bulk drug projects have entered the registration stage, and plans to carry out a number of new research and development projects such as sitagliptin, rivaroxaban, A pipeline sandban. Entered the research and development and production of preparations, ready to open up the entire industry chain. Through the company’s high-quality specialty drug substance business foundation, the company actively deployed the chemical preparations business.In March 2015, the company obtained 19 pharmaceutical preparations by acquiring 100% equity of Tiankang Pharmaceutical. At present, Tiankang Pharmaceutical has a total of 21 pharmaceutical preparations.At the same time, the company plans to cooperate with PHARMSOL in the perindopril formulation project, and to develop strategic cooperation with the United States Amerigen in the production of esomeprazole formulations. The supplementary cooperation project is in the process of confirmation with the Ministry of Commerce.The company has also established a wholly-owned subsidiary, Menovo Pharma USALLC, in the United States. In the future, it will become the management center of the Americas pharmaceuticals business and promote the development strategy of the company’s pharmaceuticals business.The company also co-invested with the strategic partner KRKA to set up Ningbo Kercoma Novartis Pharmaceuticals, which effectively promoted the development of the company’s preparation business and enriched the company’s preparation product categories.The expansion of Minorva’s raw material drug production capacity has provided a good foundation for the development scale of the company’s formulations. Through the strategy of both endogenous growth and epitaxial expansion, the business scale will be further expanded. Profit forecast and estimation We expect the company to achieve operating income in 2019-2021.9.1 billion, 12.5.7 billion, 14.31 trillion, the growth rate was 28.51%, 15.26%, 13.83%.Net profit attributable to parent company1.53 billion, 2.10 billion, 2.50 ppm, the growth rate is 58.83%, 37.49%, 18.94%.The company’s EPS is expected to be 1 in 2018-2020.03, 1.41, 1.68 yuan / share, corresponding to PE of 20.27 times, 14.74 times, 12.40 times. Risk Warning 1. The cost of raw materials for pharmaceutical manufacturing has increased significantly. 2. Formulation development and approval progress is less than expected