Lianhua Technology (002250): Linhai Pharmaceutical Intermediate Project Drives Future Growth

Lianhua Technology (002250): Linhai Pharmaceutical Intermediate Project Drives Future Growth
Introduction to this report: Lianhua is a leading pharmaceutical and pesticide intermediate company in China, and plans to invest14.The US $ 800 million construction of a pharmaceutical intermediate project in Linhai Park will drive future growth. The pesticide business’s ability to recover in the future will also gradually increase its level from a cautious increase to an increase. Investment Highlights: Upgraded to Overweight Rating.Medical projects were launched one after another, maintaining EPS 0 in 19-21.45/0.57/0.77 yuan, Linhai Pharmaceutical project will drive long-term growth, with reference to comparable companies to give 30 times PE for 20 years, with a target price of 13.30 yuan increased to 17.14 yuan, the rating was raised from cautious overweight to overweight. Leading pharmaceutical and pesticide intermediate company.The company is a leading domestic manufacturer of fine chemical products, and provides customized production, research and development, and technical services for international pesticide and pharmaceutical companies. It has been highly recognized by leading global companies under the strategy of deepening the implementation of major customers.At present, the company has 7 chemical production bases, 2 mechanical equipment production bases and 2 R & D centers in China. Medicine: Proposed investment 14.800 million construction of pharmaceutical intermediate projects in Linhai Park to drive future growth.The company’s pharmaceutical business adopts a contract-based manufacturing (CMO) model, which will benefit from the rapid growth of the Chinese market in the future.In 2019, 400 tons of pharmaceutical intermediate LT822 was put into production, and it can synthesize new cardiovascular drugs with high added value.In addition, the company conducted an environmental assessment report in September 2019: Linhai Lianhua, a wholly-owned subsidiary, plans to invest in9.With 800 million yuan, nine projects including 800 tons of diamide ester, 500 tons of methoxyphenylboronic acid, and 1,000 tons of LT228 will be built in Linhai Park, and the revenue will reach 2 billion and the profit and tax will be 600 million.At the same time, the wholly-owned subsidiary 武汉夜网论坛 Taizhou Lianhua plans to invest 500 million US dollars to build 10 products including 300 tons of benzidine tetrazolium, 500 tons of methoxyphenylboronic acid and 250 tons of chlorobenzyl anisole.Realized income of 100,000 yuan, profit and tax2.500 million. Pesticides: Budget for future resilience.Jiangsu and Yancheng Lianhua are still discontinuing production. Seven of them have production capacity at the remaining bases, accounting for 20% of the actual production capacity in 18 years.The company’s cooperative relationship with core customers is still stable, and the company’s ability to replace and reorganize pesticide business under the guidance of one enterprise and one strategy. Risk reminder: the expansion of production is slow, and the demand for pharmaceutical CMOs is less than expected.