Tonghua Dongbao (600867) first quarter report of 2019 comment: the high base dragged down the apparent growth of operating cash flow significantly improved

Tonghua Dongbao (600867) first quarter report of 2019 comment: the high base dragged down the apparent growth of operating cash flow significantly improved
Event: First quarter report of 19: Realized revenue7.1.4 billion, net profit attributable to mother 2.7.4 billion, net of non-attributed net profit2.70 trillion, respectively -0 per year.70%, -0.06%, +0.41%; EPS 0 achieved.13 yuan.Operating net cash flow 3.91 ppm, previous + 131%, a significant improvement; performance was slightly below market expectations. Comment: The high base of 18Q1 channel pressure and real estate settlement dragged down the apparent growth rate of 19Q1. The actual main business has resumed steady growth and the operating cash flow has improved significantly.In 19Q1, the income and profit side were basically the same, mainly due to the high base of 18Q1 channel sales and real estate settlement of about 70 million yuan, which replaced this part of the impact. The actual growth rate of the income side is expected to be 5-10%, which has returned to positiveincrease.Among them, it is estimated that the revenue of budget series products is about 500 million US dollars, which is more than about 5% of value added, but the terminal growth rate is expected to be higher, reaching more than 10%; the revenue of medical equipment is about 100 million US dollars, and the value added each time exceeds 20%;Settlement, the significant increase in the revenue of proprietary Chinese medicines dragged down the overall growth rate.In addition, the company’s cash flow situation has improved significantly, with operating net cash flow in 19Q13.US $ 9.1 billion, a significant increase of 131% previously; accounts receivable and bills were 5 in the 18-year reporting period and 19Q1.9.9 billion / 6.02 trillion, maintained at a very healthy level. Insulin glargine is about to be approved, and the hypoglycemic drug echelon will successively report to produce a rich product line.The company has a rich pipeline reserve, and the progress of the third-grade synthetic saccharin is already awaiting inspection at the production site, and it is expected to be approved for marketing; insulin aspart, sitagliptin phosphate tablets, and sitagliptin 南京夜生活网 dimethylbisdiol tabletsIn the production stage of declaration; insulin aspart 30, insulin aspart 50 injection, liraglutide injection, adalimumab injection are in phase III clinical trials; reglinide tablets are in the BE trial process.The company’s R & D pipeline is gradually entering the harvest period, and a complete transformation of hypoglycemic drug products is about to be established. Earnings forecast and investment rating: The company’s consolidation in the Chinese insulin basic market leader is solid, and the next generation of insulin will open up new growth space; in the future, the company will complete and improve the replacement of diabetes products, with the “blood glucose monitoring + medication + chronic disease management” trinityBig platform for diabetes management.We maintain that the company’s EPS for 19-20 years is zero.49 yuan / 0.60 yuan / 0.74 yuan, the annual growth rate is 20% / 22% / 23%.Currently, the corresponding PE is 31/26 times in 19/20, maintaining the “overweight” rating. Risk reminder: Budget manufacturers continue to increase competition and bring about price reduction risks; new product development progress is not up to expectations.