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According to statistics, in the first half of 2021, the total revenue of the 12 representative companies in the specialty API segment was 16.
458 billion yuan, an increase of 11.
72% year-on-year; non-net profit was 2.
063 billion yuan, a year-on-year decrease of 11.
47%
.
Among these 12 companies, some companies have experienced a year-on-year slowdown in revenue and profit growth due to the impact of epidemic disturbance, transformation investment, and exchange rate fluctuations.
However, some companies have both increased their revenue and net profit growth
.
On the whole, the specialty API sector is under significant pressure in the short term.
However, in the view of securities professionals, the specialty API sector may usher in an inflection point of growth in the second half of the year
.
On the one hand, with the advancement of consistency evaluation and the normalization of centralized procurement, the substitution of domestic generic drugs and a substantial increase in output will be realized, thereby increasing the demand for domestic APIs by the bid-winning formulation companies.
The upstream specialty API manufacturers have stronger Bargaining power will give rise to the industry's prosperity
.
Judging from the centralized procurement carried out in the first half of the year, API companies have gained a lot.
The industry believes that centralized procurement is good for API preparation integration enterprises.
The logic has not changed.
In the future, the concentration of leading generic drugs in the field of generic drugs will continue to accelerate
.
In this context, API companies with integrated layout and global competitive advantages are expected to gain huge room for development
.
On the other hand, as labor and cost pressures increase, the production capacity of European and American APIs is gradually shifting to emerging market countries represented by China and India.
China has a mature basic industrial system, cost advantages, and advantages in fermentation products, and it is expected to undertake some overseas markets.
Relevant companies (especially in the field of specialty APIs) are expected to continue to benefit from the demand for orders
.
This is mainly because specialty APIs are mainly chronic disease drugs, antiviral, anti-tumor, and contrast agents.
Compared with bulk APIs, specialty APIs have relatively higher technical barriers, and the market competition pattern is relatively loose, so the gross profit margin is relatively high.
Higher
.
It is worth noting that with the tightening of domestic environmental protection policies and the gradual elimination of small and medium-sized enterprises, industry concentration is also expected to increase
.
According to statistics, the number of raw materials and preparation companies that have become tired of environmental protection has decreased significantly.
In 2016, there were 889 fewer than 2015, a drop of 18%; in 2017, the amount of fixed asset investment experienced the first negative growth, and the supply of raw materials had shrunk significantly.
The output of chemical raw materials decreased by 18.
8% in 2018 and further decreased by 7.
2% in 2019
.
In addition, the superimposed correlation review is formally entered into the law, and the quality of APIs directly affects the approval results of preparations, which may be an opportunity for excellent API suppliers
.
Zhongtai Securities believes that the bottom of the API sector is basically established and the inflection point is approaching, focusing on two types of opportunities
.
First, Davis double-clicked the upgrade of API to CDMO: The CDMO business performance of various companies in the interim report has been steadily verified.
We look forward to further double-click opportunities, focusing on Jiuzhou Pharmaceutical, Prologue, Tianyu, etc.
.
Second, pay attention to the integration opportunities of API preparations: the bottom interval is established, the inflection point is approaching, and the double-click will always come: Under multiple disturbance factors such as exchange rate, price, epidemic situation, and emergencies, API preparation integration companies have experienced more than half a year of adjustments and performance The stock price of Hehe is already in the bottom range, and the short-term negatives are expected to be exhausted.
The industry upgrading logic that the bank continues to emphasize is still advancing, and the price-performance ratio is highlighted at low valuation levels.
We are optimistic about the API preparation integration leader, Stellite, Tianyu, Xianju pharmaceuticals
.
458 billion yuan, an increase of 11.
72% year-on-year; non-net profit was 2.
063 billion yuan, a year-on-year decrease of 11.
47%
.
Among these 12 companies, some companies have experienced a year-on-year slowdown in revenue and profit growth due to the impact of epidemic disturbance, transformation investment, and exchange rate fluctuations.
However, some companies have both increased their revenue and net profit growth
.
On the whole, the specialty API sector is under significant pressure in the short term.
However, in the view of securities professionals, the specialty API sector may usher in an inflection point of growth in the second half of the year
.
On the one hand, with the advancement of consistency evaluation and the normalization of centralized procurement, the substitution of domestic generic drugs and a substantial increase in output will be realized, thereby increasing the demand for domestic APIs by the bid-winning formulation companies.
The upstream specialty API manufacturers have stronger Bargaining power will give rise to the industry's prosperity
.
Judging from the centralized procurement carried out in the first half of the year, API companies have gained a lot.
The industry believes that centralized procurement is good for API preparation integration enterprises.
The logic has not changed.
In the future, the concentration of leading generic drugs in the field of generic drugs will continue to accelerate
.
In this context, API companies with integrated layout and global competitive advantages are expected to gain huge room for development
.
On the other hand, as labor and cost pressures increase, the production capacity of European and American APIs is gradually shifting to emerging market countries represented by China and India.
China has a mature basic industrial system, cost advantages, and advantages in fermentation products, and it is expected to undertake some overseas markets.
Relevant companies (especially in the field of specialty APIs) are expected to continue to benefit from the demand for orders
.
This is mainly because specialty APIs are mainly chronic disease drugs, antiviral, anti-tumor, and contrast agents.
Compared with bulk APIs, specialty APIs have relatively higher technical barriers, and the market competition pattern is relatively loose, so the gross profit margin is relatively high.
Higher
.
It is worth noting that with the tightening of domestic environmental protection policies and the gradual elimination of small and medium-sized enterprises, industry concentration is also expected to increase
.
According to statistics, the number of raw materials and preparation companies that have become tired of environmental protection has decreased significantly.
In 2016, there were 889 fewer than 2015, a drop of 18%; in 2017, the amount of fixed asset investment experienced the first negative growth, and the supply of raw materials had shrunk significantly.
The output of chemical raw materials decreased by 18.
8% in 2018 and further decreased by 7.
2% in 2019
.
In addition, the superimposed correlation review is formally entered into the law, and the quality of APIs directly affects the approval results of preparations, which may be an opportunity for excellent API suppliers
.
Zhongtai Securities believes that the bottom of the API sector is basically established and the inflection point is approaching, focusing on two types of opportunities
.
First, Davis double-clicked the upgrade of API to CDMO: The CDMO business performance of various companies in the interim report has been steadily verified.
We look forward to further double-click opportunities, focusing on Jiuzhou Pharmaceutical, Prologue, Tianyu, etc.
.
Second, pay attention to the integration opportunities of API preparations: the bottom interval is established, the inflection point is approaching, and the double-click will always come: Under multiple disturbance factors such as exchange rate, price, epidemic situation, and emergencies, API preparation integration companies have experienced more than half a year of adjustments and performance The stock price of Hehe is already in the bottom range, and the short-term negatives are expected to be exhausted.
The industry upgrading logic that the bank continues to emphasize is still advancing, and the price-performance ratio is highlighted at low valuation levels.
We are optimistic about the API preparation integration leader, Stellite, Tianyu, Xianju pharmaceuticals
.
