Praco (603566): Poultry seedlings are expected to continue high growth, optimistic about R & D and innovative enterprises

Praco (603566): Poultry seedlings are expected to continue high growth, optimistic about R & D and innovative enterprises

Brief evaluation of performance The company released the report for the third quarter of 2019, and the company achieved operating income in the first three quarters of 20194.

7.1 billion, an annual increase of 9.

28%; net profit attributable to mother is 0.

950,000 yuan, an increase of -20 in ten years.

17%; of which the net profit attributable to the mother in the third quarter was approximately 0.

300 million.

The business analysis was affected by the non-epidemic situation. The company ‘s poultry seedlings and chemical drugs grew rapidly, and pig seedlings declined. Under the influence of the epidemic, the company ‘s revenue was stable and increased.

28%, in terms of business, the revenue of poultry vaccines and antibodies in the first three quarters was 2.

11 million yuan, an increase of 38 in ten years.

17%, the revenue of the chemical medicine sector was 1.

590,000 yuan, an increase of 32 in ten years.

44%, technology license or transfer business income was 17.62 million yuan, an annual increase of 37.

01%, the income of pig vaccine was 7475.

460,000 yuan, an increase of -46 in ten years.

93%; the company achieved net profit attributable to mother 0.

950,000 yuan, an increase of -20 in ten years.

17%, deducting non-net profit increased by -19 in ten years.

60%, mainly due to the decline in sales of high-margin product pig vaccines affected by downstream demand. Secondly, the company expanded research and development technology cooperation, and the research and development costs 杭州桑拿 increased by 44.

71%.

Poultry seedling business is expected to continue high growth; benefiting from tight supply, the poultry industry has entered a boom cycle, and at the same time, the substitution effect brought by the non-plague epidemic has greatly lengthened the boom cycle; the company’s product upgrades are fast, the technology is advanced, and the core products are new.The new tributary genetically engineered seedlings ushered in high sales growth, followed by abundant product reserves. A series of genetically engineered products such as chicken Newcastle disease (genotype) and chicken infectious rhinitis are expected to be approved for marketing in the next few years, and continue to be maintained in the poultry market.Directional lead.

Optimistic about the company’s high R & D investment for multi-product conversion: The company is one of the few companies with independent R & D capabilities in the veterinary drug industry. The company’s R & D investment accounted for 14 in the first half of 2019.

21%, ranking first in the industry; in the third quarter, the company newly obtained a number of new veterinary medicine certificates for swine vaccines: the first domestic swine circovirus type 2 and Haemophilus parasuis inactivated vaccine (SH strain +4 type)JS strain + ZJ strain 5), the first domestic one-shot aqueous adjuvant vaccine Mycoplasma hyopneumoniae pneumoniae inactivated vaccine (HN0613 strain), swine atrophic rhinitis inactivated vaccine (HN8 strain + rPMT-N protein + rPMT-C protein), Breakthrough in research and development capabilities, the company currently uses its advanced genetically engineered vaccine research and development technology platform to fully support the development of non-pest vaccine, and is expected to expand its wide product matrix through its research and development platform in the future.

Investment suggestion: The company has high R & D investment + multi-product layout. The EPS for 2019-2021 is 0.

45/0.

54/0.

61 yuan / share, corresponding to PE of 45/38/33 times, given a “buy” rating.

Risks suggest fluctuations in the downstream aquaculture industry, risks of epidemics, risks of new product sales falling short of expectations and increased market competition, risks of changes in government bidding and procurement policies, and risks of brain drain.

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