Xinhua Pharmaceutical: Raw Material Prices To Improve Margins - Bulk Drugs - The Pharmaceutical

Quarterly Bulletin 2009, 3 1-September showed an operating income of 1.806 billion yuan

, an increase of 9.06%; operating profit 88.5 million yuan, an increase of 23.64%; net income attributable to parent company, owner of the 63.17 million yuan, an increase of 147.29 percent; Earnings per share 0.14 yuan, in line with our expectations.

Companies from January to September gross margin of 18.09%, compared with an increase of 5.17 percentage points over the same period, mainly due to decreased raw material costs; Inc. Sell Expense ratio, management fee rates and finance charges increased over last year respectively 1.34,1.44 and 1.04 percentage points; cost rate of 13.44% during the same period last year increased by 3.08 percentage points. Corporate shares held by Bank of Communications, Pacific Insurance corporate shares, options, and other Tiantongzhengquan Financial Assets, so that financial market volatility on the significant changes in fair value. During the reporting period, changes in fair value of the company contribution to the profit 7.59 million yuan, accounting for 8.56% of business profits, changes in fair value over the same period last year to -2,281 million.

Contribution of investment income during the reporting period while the profit 6.68 million yuan, up 236.64 percent from a year earlier. If released from the change in fair value and investment income, operating profit increased by 55.78% real.

Raw material prices increased gross margins. Company is antipyretic analgesics API Leading, main products including dipyrone, Aspirin, Ibuprofen, caffeine. Antipyretic and analgesic raw material medicine because the relative concentration of markets, market demand is stable, small fluctuations in prices, product gross margin was mainly affected by the cost. And Antipyretic and analgesic raw material medicine Mainly Chemical industry The main raw materials, chemical materials production costs with price volatility. Raw material prices decreased during the reporting period. Which methanol prices from 3211 yuan in 2008 / ton down to 2100 yuan / ton, 99% acetic acid price from 6,567 yuan / ton down to 5,133 yuan / ton. Because of lowered costs, gross profit margin during the reporting period increased by 5.17 percentage points. From the supply and demand, we will continue to the next industrial chemicals at low levels, product margins to remain relatively stable.

Preparation business is expected to use the "medical reform" to achieve rapid growth. Preparation company in 2008 product sales of 4.04 billion yuan, up 18.79 percent, with fast development. The main products Pipemidic film and the market share of nimodipine tablets 67% and 23%. With The new medical reform The advent of the domestic market must be expansion, antipyretic and analgesic drugs company as a leading enterprise, is expected to expand market share and achieve rapid growth. Antipyretic and analgesic drugs, such as dipyrone, aspirin, ibuprofen and other drugs are commonly used to enter Essential Drugs List There is no suspense. Companies need to do is to increase input formulation, open up the upstream and downstream industry chain, to achieve bulk drugs, formulations and commercial business synergies play out its advantages, and strive to operate not only increase in the number, but also to achieve structural adjustment of the "quality "leap.

Profit forecast and rating: We maintain the profitability of the company's 2009-2011 forecast EPS of 0.20 yuan, 0.22 yuan and 0.29 yuan, respectively, corresponding to the dynamic PE of 35 times and 31 times and 24 times higher valuation, for the time being maintain the "neutral" rating.

by: gaga

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