Shandong Pharmaceutical Glass (600529) 2018 Annual Report & 2019 First Quarterly Report Review: Product Structure Continually Upgrades and Profit Level Significantly Increased

Shandong Pharmaceutical Glass (600529) 2018 Annual Report & 2019 First Quarterly Report Review: Product Structure Continually Upgrades and Profit Level Significantly Increased

The results of Q1 in FY18 and FY19 increased by 36, respectively.

3%, 33.

5%, EPS0.

84, 0.

26 yuan The company realized operating income of 25 in 2018.

9 trillion, with an increase of 10.

9%, net profit attributable to shareholders of listed companies.

600 million, an increase of 36.

3%, budget benefit 0.

84 yuan.

Profit distribution plan and capital reserve plan for capital increase: RMB 3 cash dividends (including tax) will be distributed for every 10 shares, and 4 shares for every 10 shares will be transferred to all shareholders in the form of capital reserve capitalization.

The company achieved operating income in the first quarter of 20197.

1 trillion, the same increase of 10.

4%, net profit attributable to shareholders of listed companies1.

1 trillion, the same increase of 33.

5%, budget benefit 0.

26 yuan.

The gross profit margin level has increased significantly, and the fee rate during the period decreased slightly. The company’s comprehensive gross profit margin was 36 in 2018.

0%, an increase of 3 a year.

8 units; sales rate, management rate (including R & D expenses), and financial rate are 8.

5%, 9.

5%, -1.

2%, change 0 every year.

1.

0 and -1.

9 units; period rate is 16.

8%, a decline of 0 per year.

8 single; the company’s revenue increased by 6 in the single quarter of 2018

1%; comprehensive gross profit margin 38.

1%, with the same increase of 6.

2 units; sales rate, management rate (including R & D expenses) and financial rate are 11 respectively.

0%, 17.

2% and -0.

3%, change by 1 every year.

5, 9.

8 and -1.

3 averages, period rate 27.

9%, an increase of 10.0 averages.

In the first quarter of 2019, the company’s comprehensive gross profit margin was 38.

0%, an increase of 5 a year.

8 units; sales rate, 武汉夜生活网 management rate (including R & D expenses) and financial rate are 7 respectively.

2%, 9.

8% and 0.

7%, change by 1 every year.

2, 3.

3 and -2.

0 averages, period rate 17.

7%, an increase of 2 per year.

5 units.

In 2018, due to environmental protection, supply-side reforms and Sino-U.S. Trade frictions caused the average price of raw fuels to rise, but the company continued to carry out technological innovation and production line technical reforms, and achieved significant results in reducing costs and improving efficiency. At the same time, downstream demand steadily developed, and the company’s productsPrices have risen steadily, the structure has been continuously optimized, and revenue has grown steadily; under the overall effect, profitability has increased significantly.

The company’s expense ratio decreased slightly, the increase in interest income and the increase in exchange income brought about by the depreciation of the RMB resulted in a substantial decrease in the company’s financial expenses and its performance maintained rapid growth.

Demand structure has been upgraded and product structure has continued to be optimized in 2018. In terms of products, the operating income of molded bottles, brown bottles and butyl rubber stoppers increased by 10 respectively.

8%, 21.

0%, -6.

0%, the proportion is 40.

8%, 28.

3%, 8.

8%; gross profit margins are 48.

9%, 30.

9%, 40.

2%, an increase of 7.
.

2, 1.

9,9.

4 units.

Sales of mold-resistant bottles in molded bottles have declined, but demand for a type of molded bottles and cosmetic bottles has grown rapidly. Under the influence of product structure upgrades and price increases, revenue has grown steadily; brown bottles benefit from strong domestic and foreign health product market demand.Continued funding for job hunting and rapid sales growth; butyl rubber stoppers were affected by the production line’s technological upgrading and upgrading, but sales of high-end product R & D and production technology achieved breakthroughs, and future product structure will help improve.

By region, domestic and foreign operating income is increasing by 17 per year.

9% and -4.

0%, accounting for 65% and 24% respectively; gross profit margins were 37.

2% and 32.

1%, an increase of 3 over the previous 17 years.

5 and 3.

7 units.

The company’s strategic repositioning and incentive mechanism are further improved. Strategic repositioning: Committed to independent innovation and upgrade existing products to become world-class products, comprehensively control costs and improve product competitiveness, and provide first-class services to stabilize customer relationships.

Incentive mechanism is further improved: In order to fully mobilize and give play to the sense of responsibility of the company’s managers and business backbones, to ensure the realization of development goals, the “Fund Management Measures” plan is proposed, and the incentive fund will be drawn at 25% of the net profit growth part of the previous year.24.48 million yuan.

The accrual plan still needs the shareholders’ general meeting to approve the rear performance.

Consolidation of innovation and R & D advantages: In-depth research on a class of glass molding and regulation production technology, new product development and integration of product quality upgrades in progress; butyl rubber stopper high-end product development and upgrades continue to advance; industrial equipment automation technology upgrades, cost reduction and increaseEffectively carried out in an orderly manner; basic research on compatibility of medicinal packaging materials and drugs continued to accumulate and achieved good results; and other related technological reforms continued to be invested.
Accelerate the unanimous evaluation and the rapid growth of the demand for neutral borosilicate. In 2019, relevant policies of the pharmaceutical industry have been continuously implemented. Accelerate the unanimous evaluation to promote innovation, quality assurance, price reduction, and the general trend of benefiting the people’s livelihood.The drug list is expected to be released this year.
The direct contact of drug packaging materials with the time of drug implantation has a bearing on the quality of the drug and the safety of medication. Supervision has gradually promoted the upgrade of drug packaging materials.

Neutral borosilicate glass materials are gradually replacing the low-borosilicate and soda-lime glass replaced by the domestic market, and demand is expected to grow rapidly.

The company is the only company in China that has the production technology of neutral borosilicate glass molded bottles. It has also successfully developed a new type of alkali-resistant glass to respond to domestic medical safety regulatory measures. The research and development of neutral borosilicate glass adjustment related technologies is continuing.

Profit forecast and investment rating Shandong Pharmaceutical Glass is a leader in the domestic pharmaceutical glass segment market, with leading production scale and cost advantages in the industry, and product quality benchmarking international standards; benefiting from rising industry concentration and strict city safety regulations due to strict drug safety regulationsImprovement, and optimization of the structure of high-end products; superimposed technological innovation and production line technical reform, the efficiency has been significantly improved, the profitability has increased steadily, and the performance has grown rapidly.

The company has made breakthroughs in the research and development of a number of high-end new products, and achieved mass production and market promotion. The domestic and foreign markets have been further expanded; the incentive mechanism has been further improved, integration and employee motivation have been promoted, etc., which will continue to increase the company’s performance.

We raised the company’s EPS forecast for the 19-20 year EPS to 1.

06, 1.

29 yuan (previous forecast 1).

00, 1.

22 yuan) plus 21 years of EPS 1.

54 yuan, maintain “Buy” rating.

Risk Warning: Demand growth is slower than expected risk, raw material fuel price rise risk, product price rise is lower than expected risk, exchange rate risk caused by exchange rate changes.