Phillip Securities Group
Please note that the Day Light Saving of Europe and US will be effective on April 1st and March 11th respectively. The trading hours for those relevant contracts will be 1 hour earlier. Any questions, please contact us at 22776677.For details, please visit our foreign futures website or contact us at 22776677.Moreover,the spread of USD/JPY is low as one pip.Please click here for details
Research Report: Stock codeG
  18-10-2018 (�|)    Jumpcan Pharma (600566.SH) - Strong 18H1 Results with Core Products Growing Fast
  16-10-2018 (�G)    Jumpcan Pharma (600566.SH) - Strong 18H1 Results with Core Products Growing Fast
  24-07-2018 (�G)    Jumpcan Pharma (600566.SH) - Three products entered into Hunan drug integration list
  26-04-2018 (�|)    Jumpcan Pharma (600566.SH) - Pudilan Entered into Shandong PDRL; Robust FY17&18Q1 Results
  25-04-2018 (�T)    Jumpcan Pharma (600566.SH) - Pudilan Entered into Shandong PDRL; Robust FY17&18Q1 Results
[1 / @3]
Jumpcan Pharma(600566)
18-10-18
  Share this articleG    
Recommendation on   18-10-18 
Recommendation Accumulate
Price on Recommendation Date $ 36.750
Suggested purchase price N/A
Target Price $ 42.200
Weekly Special - 601021.CH SPRING Airlines
Written by: Eurus Zhou( Research Analyst )
Tel:
+852 2277 6515

Email:
euruszhou@phillip.com.hk

Jumpcan Pharma (600566.SH) - Strong 18H1 Results with Core Products Growing Fast

Investment Summary

The company reported solid 18H1 results, given topline/profit attributable recorded 35.36%/44.81% growth yoy. Due to higher expectation for whole year performance, we raise 18E/19E EPS forecasts to RMB2.11/2.97. Considering recent market volatility, we adjust 6-month target PE to be 20x to derive TP of RMB42.2, suggest to prudently trade and accumulate during price trough. (Closing price at 12 Oct 2018)

Business Overview

Solid 18H1 results. In 18H1, Jumpcan revenue was RMB3.8bn up by 35.36% yoy, net profit attributable to shareholders RMB842mn up by 60.58% yoy, and NPATS excluding non-recurring items RMB820mn up by 73.6% yoy. Selling expenses went up by 45%, while impairment increased sharply due to accounts receivable surged. Higher profit margin growth was due to effective cost control measures in selling and administration. Net cash flow from operation reported yoy growth of 43.72%, mainly resulting from enlarging sales scale and higher capital turnover.

Wide coverage of fast-growing core products. Pudilan Oral Liquid is an exclusive dosage form, which is mainly used for treatment of mumps, pharyngitis, tonsillitis, furuncles, etc. Child Chiqiao Qingre Granule is an exclusive drug, mainly for children cold. In 2018, the two drugs were recommended for the prevention and treatment of influenza in Jiangsu Province in a diagnosis and treatment plan (¦¿Ä¬¬Ù¬y¦æ©Ê·P«_¤¤Âå¶EÀø¤è®×¡]2018ª©¡^). Also they are recommended for the treatment and prevention of hand foot mouth disease in a provincial medical document (¼sªF¬Ù¤¤ÂåÃĨ¾ªv¤â¨¬¤f¯f±M®a¦@ÃÑ). Due to the exclusive nature of both products and the availability in hospitals and OTC pharmacies, selling growth momentum will continue to be strong in the future.

Strong marketing channels. The company mainly focuses on academic promotion with distributors as supplement, and has established a professional academic promotion department. Its marketing offices cover 30 provinces, municipalities and autonomous regions in China, and have more than 3,000 marketing staff. Its sales terminals involve hospitals, OTC drugstores, and primary medical institutions. For OTC, the company sets up an OTC management team, which carries out product display and promotion.

R&D progresses. During the reporting period, the company completed the BE test of two drugs (Prucalopride Succinate Tablets and Tadalafil Tablets). As up to the end of first half, the company has obtained 17 clinical trial batches, launched one BE test, completed two BE tests, and applied for 16 production approvals. The company cooperated with the Institute of Chinese Materia Medica (¤¤°ê¤¤Âå¬ì¾Ç°|¤¤ÃĬã¨s©Ò) to carry out the second-stage development project of POL, ensuring good quality of follow-up products. During 18H1, the company obtained five patents including: a Pudilan Antibacterial and Antipruritic Bath Lotion and its preparation method; posaconazole oral suspension and its preparation method; a synthesis method of Citafloxacin; a preparation method of Citafloxacin Granules and its preparation method; a Chinese herbal compound and its application in preparation of drugs for chronic pelvic inflammation.

Investment Thesis & Risks

Our target price is adjusted to RMB42.2. We suggest to accumulate Jumpcan during price trough due to its better fundamentals than peers, given higher-than-average growth performance in FY18H1 and FY17. We increase EPS estimates to be RMB2.11/2.97 for 18E/19E based on good operation results in first half, and derive 6-mon TP of RMB42.2, targeting 20x PE. Risks include: Slow-than-expected sales growth; Share selling of major shareholders; Policy risks.

Financials

Click Here for PDF format...

Back to Top


Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable. However, we do not verify such information. We do not guarantee its accuracy or completeness, nor do we take responsibility for any loss occasioned by reliance placed upon the contents hereof. Any statements nonfactual in nature constitute only current opinions, which are subject to change. Phillip Securities (HK) Ltd (or one of its affiliates) or their officers, directors, analysts, or employees may have positions in securities or commodities referred to herein, and may, as principal or agent, buy and sell such securities or commodities. An employee, analyst, officer, or a director of Phillip Securities (HK) Ltd, or its affiliates, may serve as a director for companies mentioned in this report. Neither the information nor opinion expressed in this report shall constitute a solicitation to buy or sell any securities. There may be instances when fundamental, technical, and quantitative opinions may not be in concert. This firm (or one of its affiliates) may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any company mentioned in this report.
There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange rate fluctuations, and limited availability of information on international securities. We recommend that you obtain the advice of your Financial Advisor regarding this or other investment in order to conform to your financial resources and risk preference

Copyright © 2011 Phillip Securities Group. All Rights Reserved [ Risk Disclosures Statement ] [ Terms and Conditions ] [ Personal Data Policy ]