Lianhua Technology (002250): Medicine business accelerates agricultural chemical business bottoms out

Lianhua Technology (002250): Medicine business accelerates agricultural chemical business bottoms out
Investment points The company is a professional military custom-made pesticide and pharmaceutical intermediate company: the company’s business includes three major sectors of pesticides, pharmaceuticals and functional chemicals. The long certification period is the common point of custom processing of pesticides and pharmaceutical intermediates. The 北京夜网 pesticide intermediate business has basically bottomed out: The pesticide varieties that the company is involved in are mainly multinational corporations’ generic drugs or those whose patent protection period is about to expire.FMC is its largest custom production customer, DuPont, BASF, Syngenta are also important custom customers to catch up with in the future of the company.At the front end, the company’s agrochemical business was impacted by the comprehensive improvement of the northern Jiangsu chemical park.But it is just that after the nationwide comprehensive improvement of environmental protection, the company’s technological advantages and environmental protection advantages are gradually being transformed into order advantages, and the company’s influence in the procurement system of multinational companies has continued to rise.At the same time, the company has taken measures such as backup of production capacity to cope with the comprehensive impact of environmental protection. The pharmaceutical intermediate business is accelerating: the company’s pharmaceutical intermediate products include antifungal drugs, hypoglycemic drugs, cardiovascular drugs, antitumor drugs, antiviral drugs and antidepressant drug intermediates.After years of accumulation of pipeline products, the company has a series of products in the early stage of commercialization or about to be in the phase of volume.In terms of products, the company has also covered advanced intermediates that require GMP in the original drug.In terms of revenue, since 2016, the company’s pharmaceutical division has achieved an increase in operating income of more than 50% for two consecutive years. The company’s business has a reverse indicator.The domestic comprehensive environmental protection improvement started at the end of 2015. From the report data, it can be seen that the company’s influence in the pesticide intermediate procurement system of multinational companies has continued to increase, and the revenue of the pharmaceutical intermediate business has achieved stable and rapid development. Earnings forecast and investment grade: What do we expect in 2019?In 2021, the company’s operating income will be 42.8.7 billion, 53.9.8 billion, 64.9.4 billion yuan, net profit attributable to mothers was 4.3.7 billion, 6.4 billion, 8.29 trillion, EPS is 0.47 yuan, 0.69 yuan, 0.90 yuan, the current expected corresponding PE is 27X, 19X, 14X.Considering that the pesticide business of the existing company is at the bottom, the development of the pharmaceutical business is accelerating, and it is covered for the first time, giving an “overweight” rating. Risk warning: the risk of shutdown of Xiangshui base, the risk of sluggish pesticide demand.

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