Kelun pharmaceutical CHUANNING project passed the environmental protection acceptance and further established the turning point of performance in 2018

[chinapharma.com Pharmaceutical Engineering] affected by environmental issues, CHUANNING's performance contribution has been lower than the market expectation in the past After seven years of construction and adjustment, the current investment budget has been increased to 6.8 billion yuan The original intention of the company is to form a non infusion product system with a complete industrial chain, which combines antibiotic raw material intermediates, antibiotic API, antibiotic powder injection, freeze-dried powder injection and antibiotic oral preparation, so as to enhance the overall competitiveness of the company in the field of antibiotics However, due to the environmental protection problems, CHUANNING's performance contribution has been lower than the market expectation Since the production approval was obtained in 2013, it only made a small turnaround in 2016 In 2017, due to the second phase environmental protection acceptance, the production capacity was not fully released, and it is estimated that the annual loss is tens of millions of yuan Unswervingly, the CHUANNING project has passed the environmental protection acceptance and the performance flexibility is huge, which means that the environmental protection problem has been solved We expect that the CHUANNING project will contribute about 500 million profits and the performance flexibility is huge From the perspective of supply and demand, most antibiotic products are in a state of oversupply But in recent years, with the increasingly strict pressure of environmental protection, part of the production capacity is in the state of long-term shutdown, the high pressure of the environmental protection red line will make small enterprises unable to invest in environmental protection be eliminated, and the short-term supply gap will bring the driving force of price rise At present, the price of antibiotics is firm: as of March 12, 6-APA has quoted 230 / kg; as of the end of February, 7-ACA has quoted 450 yuan / kg, sulfur red 360 yuan / kg; all of the above prices are the same as those at the beginning of 2018 Considering that the production cost of CHUANNING project still has some room for reduction, and the company's current product quotation is mostly lower than the market transaction price (in order to seize customers at the beginning), we believe that the profit contribution of CHUANNING project will be further expanded after entering the mature period It is suggested to pay attention to the performance elasticity brought by the consistency evaluation CDE website shows that on March 8, the supplementary application of citalopram hydrobromide tablets was accepted and entered the consistency evaluation sequence; on February 12, the first one of citalopram oxalate tablets passed the consistency evaluation Both of them are antidepressants The original manufacturer, Lingbei, Denmark, has a global sales peak of over US $1.1 billion In 2016, the sales volume of PDB sample hospitals in China was 355 million yuan (+ 20.33%), and it was estimated that the terminal market exceeded 1 billion yuan, of which the original research accounted for more than 60%, Shandong Jingwei accounted for 29%, and the company accounted for less than 10% At present, the company is the first manufacturer (faster than Shandong Jingwei) that passed the consistency evaluation, with huge space for substitution Assuming replacing 30% of the market, it is expected to generate hundreds of millions of report revenue, which will contribute a lot to the new drug business line At present, the company has filed a total of 18 consistency evaluation varieties and more than 30 product specifications, and it is expected that 1 / 2 of them will be approved for listing in the next three years The varieties with large market scale include: levofloxacin hydrochloride tablets (1.2 billion), azithromycin (500 million), ornidazole tablets (400 million), fluconazole tablets (350 million), omeprazole (1.4 billion), and the company's original market share is not high With the progress of the company's consistency evaluation gradually accelerated, it is expected to contribute more performance flexibility in the future Profit forecast: considering the consolidation factor of 20% equity of shisiyao and the performance elasticity of CHUANNING project, we raised the profit forecast value of 2018-2019, and calculated that the EPS of the company in 2017-2019 was 0.50/0.87/1.19 yuan respectively, corresponding to PE of 60 / 35 / 26 times At the same time, the target price was raised to 42 yuan, 60 billion market value, and the rating of "strongly recommended" was maintained Risk tip: risk of industrial policy change, environmental protection risk, drug quality risk, etc Original title: Kelun pharmaceutical: CHUANNING project passed the environmental protection acceptance, and the turning point of 2018 performance was further established