Kanghong Pharmaceutical (002773): Rapid increase in R & D expenses drives growth in biopharmaceuticals

Kanghong Pharmaceutical (002773): Rapid increase in R & D expenses drives growth in biopharmaceuticals

The event company released the first half of 2019 performance report, and achieved operating income of RMB 15 in the first half of the year.

19 ppm, an increase of 9 in ten years.

79%; net profit attributable to mother RMB3.

4 ‰, an increase of 9 in ten years.

67%; net profit of RMB 3 deducted from non-attributed mothers.

160,000 yuan, an increase of 18 in ten years.

07%; net cash flow from operating activities 2.

390,000 yuan, an increase of 71 in ten years.

14%; EPS is 0.

39 yuan.

The performance of the assessment was in line with expectations. Biopharmaceuticals continued to grow rapidly. The company’s 武汉夜网论坛 biological products sales continued to grow rapidly. Chinese patent medicines, chemical drugs and other businesses made steady progress.

Operating income for the first half of 201915.

19 ppm, an increase of 9 in ten years.

79%, net profit attributable to mother 3.

40,000 yuan, an increase of 18 in ten years.

07%, the company’s net asset income in the first half of 2019 increased by 8.

06%, maintaining a high level.

The company’s operating cash flow was 2.

39 trillion US dollars, an annual increase of 71.

14%, the cash liquidity has improved, the first of which is the receivable supplement.

The company strongly supports R & D investment and enhances core competitiveness.The R & D investment in the first half of 2019 was 2.

840,000 yuan, an increase of 125 over the same period last year.


Biological products have driven revenue growth and their 苏州夜网论坛 proportion has further increased.

In the first half of the year, revenue from biological products was 5.

60,000 yuan, an increase of 26 in ten years.

81%, biological products accounted for 31% of total revenue from the same period last year.

90% increase to 36.

85%, the biological products business has gradually become the company’s new growth force.

Initially, the subsidiary Kang Hong Biological achieved net profit in the first half of the year.

7.3 billion, accounting for 50% of net profit, an annual increase of 62%.

Compaq’s third indication, “Diabetes-induced macular edema (DME), caused visual impairment” was approved for marketing in May 2019. An attempt is made to negotiate medical insurance through price during the year.Growth, which boosts company performance.

Chemical and traditional Chinese medicine have stabilized and are expected to pick up in the second half of the year.

Chemical income 5.

6 ppm, an increase of ten years.

76%, accounting for 36% of total revenue.
85%; Chinese patent medicine income is 3.

9.7 billion, accounting for 26% of revenue.
16%, an annual increase of 1.


The sales of chemical drugs and proprietary Chinese medicines have stabilized, and their proportion in total revenue has decreased compared to the same period last year. Considering that the company began to promote marketing reforms in the second half of 2018, the sales channels and marketing teams were adjusted, and the base was reduced. It is expected to increase in value in the second half of this yearSpeed up.

Revenue from other businesses and medical devices was 47 million and 1.31 million yuan, respectively, which accounted for a large proportion of total revenue, and both did not exceed 0.


R & D expansion has grown, key product approvals have progressed The company’s R & D expansion has continued its efforts to promote the development and listing of new products and the approval and registration of key products. In 2019, the R & D investment reached 2 in the office year.

840,000 yuan, an increase of 125 over the same period last year.


The Compaq Air Force has been approved internally for the treatment of wet age-related macular degeneration (wAMD) and visual impairment (pmCNV) caused by choroidal neovascularization secondary to pathological myopia.

In addition, Compaq International Multicenter III clinical trials, another indication for retinal vein stenosis (RVO), is currently in Phase III clinical trials in China, and related research is progressing as planned.

Except for Compaq, the company’s research and development of other products is progressing smoothly.

KH906 eye drops is a product under application for the treatment of trauma, chemical burns, and corneal transplantation-induced neovascularization. It is a Class 1 biological innovative drug with independent intellectual property rights independently developed by the company.Approved, currently patients have been enrolled for treatment.

KH903, a new class 1 biological drug applied for the treatment of colorectal and other organ tumors, has entered clinical phase II.

KH901 is a new class 1 biological drug with an international patent for therapeutic tumor vaccines, and is also in clinical phase II.

In terms of proprietary Chinese medicines, the company applied for a new drug KH110 (Wujia Yizhi Granules) for the treatment of Alzheimer’s disease, which has been approved by the State Drug Administration.

In terms of chemical drugs, epiprazole orally disintegrating tablets have obtained clinical approval from the State Drug Administration.

The company’s supporting capacity construction continued to advance, ensuring clinical and commercial capacity supply.

Kanghong Pharmaceutical’s solid oral preparations for off-site reconstruction and expansion project has been invested 80%, and it is expected to be put into use soon; KH series bio-new drug industrialization construction project is expected to be put into use in July 2020; Compaqop Eye DropIndustrialization projects have invested over 90% and are expected to be completed and used soon.

Earnings forecast and investment rating We expect the company to achieve net profit attributable to mothers for 2019-2021 of 8, respectively.

4.9 billion, 10.

4.5 billion and 12.

76 trillion, the corresponding growth rate is 22.

2%, 23.

0% and 22.

1%, EPS is 0.

97 yuan / share, 1.

20 yuan / share and 1.

46 yuan / share, corresponding to price-earnings ratios of 36 times, 29 times, and 24 times respectively, covering for the first time, giving an overweight rating.

Risks suggest that the sales price will drop, the review progress may be less than expected, the drug development failure, and the lack of talent.