On January 21, 2022, Xinhua Pharmaceutical (000756) announced that CICC Liu Xiyuan Zhang Yu, Yuanxin Investment Zhou Yang, Southwest Securities Li Genlin, Wells Fargo Fund Guo Shujie, Defu Capital Pei Yanchun Li Yang, Boyuan Fund Tan Fei, Jingling Investment Song Jiuwei, BOC Fund Wang Fangzhou, Guo Pan of Guojin Securities, Guo Zhe of Orient Securities, IDG Capital Roger, Penghua Fund Lang Chao, Industrial Securities Asset Management Diao Jupeng, Jiupeng Asset Management Deng Ke Lu Manman investigated our company on January 19, 2022.
The main contents of this survey are:
Q: Since the third quarter of 2021, the price of APIs has generally risen, as far as the current situation is concerned, what is the trend of price changes? How does the company guarantee the gross profit margin of APIs?
A: Since 2021, due to the epidemic, "double control" and other factors, the price of chemical raw materials has risen, logistics costs have increased, and affected by exchange rate fluctuations, the company's operating costs have risen sharply, the price of APIs has risen, and the production capacity of some enterprises has been insufficient, resulting in changes in market supply and demand, thus contributing to the rise in API prices. Under the national macro policy regulation, the prices of some bulk raw materials have declined, but they are still running at a high level. The price of the company's APIs remained basically unchanged. The company to maintain a reasonable gross profit margin as the principle, timely increase the price of products, on the one hand, for the long orders that have been signed, actively communicate with customers, negotiate to increase the price; short orders with the market.
Q: The company's reserves of new varieties of APIs? Advantage analysis of future API development?
A: The company's API sales have always been promoted simultaneously at home and abroad, and the international market is dominated by high-end markets such as Europe, the United States and Japan, and the standardized market, and continues to strengthen strategic cooperation with well-known enterprises around the world. Among the existing products, 5 products such as pyridine and triphenylbizine are exclusively produced, and the market share of 10 products such as ibuprofen, metamizole, aminopyrine, aspirin, and levodopa ranks first. In recent years, on the basis of the original antipyretic and analgesic APIs, the company has continued to strengthen the commercial transformation of research and development results, and the varieties with better development are EPA series, carbidopa, carbapic aspirin calcium, carbonate thinking ram, glimepiride and so on. At the same time, it also carries out research and development work around the popular layout of many blockbuster varieties in the generic drug market, such as apixaban, italicine, epprodone, esomeprazole magnesium, etc., which is expected to be put into production in the next few years, and the company's API product line will be greatly enriched.
Q: Please introduce the EPA series products in detail, as well as the advantages and future plans of Xinhua Pharmaceutical in this product series?
A: EPA, or eicosan-pentasaclic acid, is an unsaturated fat component extracted from fish animals, which is an important fatty acid that the human body cannot produce but is indispensable, and must be ingested externally to meet its needs. EPA is known as a "vascular scavenger" and is easily converted into high-density lipoprotein (HDL) in the human body to perform physiological functions. Studies have shown that EPA can reduce the synthesis and/or secretion of hepatic very low-density lipoprotein triglycerides (VLDL-TG) and enhance the clearance of TG by circulating VLDL granules. In terms of technical advantages, Xinhua Pharmaceutical has entered the EPA industry field since 2013, and has made all-round preparations from the aspects of technology, regulations and production, conquered the key technologies of pharmaceutical-grade fish oil, and mastered the complete set of technologies for high-purity fish oil production. The company's fish oil separation and purification technology has reached the international advanced level, the whole process of production adopts anaerobic operation, the DHA content is more than 95%, the EPA content is more than 98%, and a single unknown impurity can be controlled within 0.05%, and the product quality has a leading advantage in the world. API self-production advantages, in 2016 invested in the construction of a production capacity of 500 tons / year production line, in 2021, the company on high-purity fish oil raw materials after the expansion and transformation of production capacity of 1000 tons / year, the company has become the world's main high-purity fish oil raw materials producers, fish oil products in the United States, Europe for the record, into the international market. In 2022, the company will add two new sets of molecular distillation units, and the company's fish oil production capacity will be doubled. In terms of fish oil health products and pharmaceutical preparations, relying on the advantages of self-produced high-purity EPA fish oil raw materials, the company actively lays out the market of fish oil health products and pharmaceutical preparations. In the fourth quarter of 2021, Xinhua Pharmaceutical launched three Fuyaan series of health care products, Zebai brand fish oil soft capsules, with an EPA content of ≥ 90% (EPA-EE ≥95%), almost no DHA; Baiping brand fish oil soft capsules (EPA ≥65%); Ruishou brand high-purity mixed fish oil soft capsules, omega-3 fatty acid label content of 70%, of which EPA 40%, DHA30%. The company has set up a special team to fully roll out sales online and offline, and JD.com and Tmall have sales. The research and development registration of DPA (docosapentaenoic acid) health products and DHA health care products has been officially launched. At the same time, the company actively promotes the research and development registration of medicinal fish oil at home and abroad, and it is expected that the raw materials and preparations of medicinal fish oil will be approved in the next year.
Q: What is the company's marketing strategy for formulation products?
Answer: 1, the company is actively promoting the strategic development plan of large preparations, domestic preparation sales through market segmentation, regional management, the establishment of nearly a thousand people sales team; 2, actively participate in bidding and procurement, through targeted bidding and quotation, the company has 6 varieties of 8 specifications won the bid, product sales have increased significantly, such as glimepiride, cefladin and other varieties of sales have risen sharply; 3, the selection of strategic varieties, the development of special implementation plans, and active cultivation, For example, the sales of self-produced raw material varieties Jiening exceeded 80 million yuan in 2021, and the sales of rabeprazole sodium exceeded 200 million yuan, all of which hit a record high; 4, continue to promote quality general medicine, give full play to the advantages of the industrial chain of APIs, enhance brand effect, and improve product market share, such as the company's exclusive variety of pyridine, high quality and low price, good effect, good reputation in the mouth of the people; 5, through the Xinhua health e-commerce platform and pharmacy sales; 6, the preparation CMO business, in recent years with the world's leading pharmaceutical companies Roche, Bayer, BailiGao has cooperated one after another, and the export of preparations has become an important measure of the company's internationalization strategy.
Q: The company has repeatedly launched internal incentive plans and proposed future performance appraisal goals, what are the main considerations?
A: The company launched the first phase of the equity incentive plan in 2018, and the conditions for the first and second exercises have been achieved, and all eligible incentive objects have been successfully exercised; in 2021, a new phase of the equity incentive plan has been launched, and the first grant of incentive objects has been completed. Equity incentive is mainly to establish a long-term incentive mechanism of the company, effectively combine the interests of shareholders with the interests of operators, stimulate the enthusiasm and initiative of key personnel, retain talents, and make continuous efforts to complete the performance appraisal goals, and ultimately achieve a win-win situation for shareholders and employees.
Q: The company launched the "Phoenix Needle" and other medical aesthetic device products, the company as an auxiliary product or pillar products?
A: The first generation of "Phoenix Needle" is an exclusive strategic cooperation product reached by Xinhua Health and Shandong Provincial Tissue Function and Regenerative Medicine Engineering Laboratory, and is currently launched as the first medical aesthetic product of Xinhua Health Company. The two sides jointly established the "Skin Regeneration Research Center", and will increase research and development efforts in the future, continue to launch recycled material products and customized products and services, Xinhua Health will contribute to the medical aesthetic industry from safety and compliance, and provide better products and experiences for beauty lovers.
Q: The company's research and development expenditure is about 300 million yuan, what are the main directions of its investment?
A: The company has maintained a high R&D investment for 2 or 3 years, adhering to the idea of innovation leading the development of enterprises, and the R&D expenditure is mainly invested in the following aspects: 1. New product research and development, mainly around innovative drugs and large varieties of generic drugs; 2, consistency evaluation, this aspect of investment is higher; 3, basic development, such as new processes, new technologies, new equipment and environmental protection technology development.
Q: Strategies for product selection?
A: 1, around the field covered by the enterprise, such as antipyretic analgesia, metabolism, anti-infection, tumors, etc., when selecting products, we will also focus on the advantages of the enterprise, such as paying more attention to cardiovascular and cerebrovascular products; 2, relying on the advantages of existing APIs, innovating in improved dosage forms; 3, continuing to pay attention to natural medicines and promoting the current EPA series product model.
Q: What are the cooperation opportunities and future plans for hormone products?
A: Hormone products are the last product to achieve overall relocation after the realization of technological breakthroughs, cooperation with the common pharmaceutical industry is based on the company's extension and establishment of a consolidated API, intermediate industry chain and enhance the competitive advantage of the hormonal products market demand, the two sides of the cooperation with the new pharmaceutical industry not only laid out the anecotate project, but also laid out the 7α-hydroxyprogesterone project, on the basis of steroid hormones will continue to expand the field of hormone products, such as progesterone, and then enhance the market share of hormone products.
Xinhua Pharmaceutical's main business: development, manufacturing and sales of chemical APIs, pharmaceutical preparations, chemicals and other products.
Xinhua Pharmaceutical's 2021 third quarter report shows that the company's main revenue was 4.94 billion yuan, up 6.5% year-on-year; the net profit attributable to the mother was 285 million yuan, up 15.96% year-on-year; the deduction of non-net profit was 252 million yuan, up 16.31% year-on-year; among them, in the third quarter of 2021, the company's single-quarter main revenue was 1.389 billion yuan, up 2.69% year-on-year; the single-quarter net profit attributable to the mother was 85.254 million yuan, up 15.59% year-on-year. In the single quarter, the non-net profit was 66.0518 million yuan, up 6.01% year-on-year; the debt ratio was 50.09%, the investment income was 5.8677 million yuan, the financial expense was 38.9461 million yuan, and the gross profit margin was 28.05%.
The unit has not had an institutional rating in the last 90 days. According to the Valuation Analysis Tool of Securities Star, Xinhua Pharmaceutical (000756) has a good company rating of 3 stars, a good price rating of 3 stars, and a comprehensive valuation rating of 3 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)
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