Decoding Guobang Pharmaceuticals 2022 quarterly report: pharmaceutical platform leading development momentum, hands on API to accelerate globalization layout

As medical reform continues to deepen, under the influence of policy support, more and more pharmaceutical companies are relying on their own construction to carry out "large and comprehensive" full chain layout.

On April 28, Guobang Pharmaceutical (605507), a leading pharmaceutical platform stock, disclosed its first quarterly report for 2022. During the reporting period, the company achieved total revenue of 1.176 billion yuan, up 2.96% year-on-year; net profit attributable to the mother of 200 million yuan, up 8.26% year-on-year; net profit after deduction of 197 million yuan, up 8.32% year-on-year; net cash flow from operating activities was 68.58287 million yuan, up 283.08% year-on-year. From the data, it is easy to see that Guobang Medicine has been growing strongly since 2022.
This is also inseparable from the development direction that Guobang Medicine has been taking. As a pharmaceutical manufacturing company facing the global market, multi-species, and with the ability to produce many key intermediates in-house, over the years, Guobang Pharmaceuticals has been deeply engaged in two industries, pharmaceuticals and animal health products, and has developed steadily into a multi-species head leader among pharmaceutical platform companies by focusing on seven advantages such as innovation drive, system security and platform operation.

According to BOC Securities, API head enterprises rely on technical cost advantages and gradually become an extremely important link in the global pharmaceutical supply chain, with economic added value continuously improving, and are not affected by domestic medical insurance cost control, so the long-term cycle is strong and worthy of bullishness. As a member of this group, Guobang Pharma's advantageous position should not be underestimated.

How is the quality platform of Guobang Pharmaceuticals built?
At present, China is the world's largest producer and exporter of APIs, with more than 30% of the world's API production capacity. According to the data of the State Drug Administration, the number of domestic API and preparation manufacturers is 4,460 as of the end of December 2020. In the long-term and steady development, Guobang Pharmaceutical Company has a strong comprehensive competitiveness as an API company with a complete and extensive variety layout in the API field.

Founded in 1996, Guobang Pharmaceutical Group Corporation (stock abbreviation: Guobang Pharmaceutical, stock code: 605507) is a leading domestic pharmaceutical manufacturing company for global market, multi-species, with the ability of self-production of many key intermediates, and an important player in the global chemical manufacturing industry chain. The company is mainly engaged in two businesses, namely, pharmaceuticals and animal health products, of which the pharmaceutical segment is mainly focused on APIs, with the mastery of pharmaceutical intermediates upwards and the extension to formulation products downwards. The products mainly include azithromycin, clarithromycin, roxithromycin, (hydrochloric acid, lactic acid) ciprofloxacin, cephalosporin series products, etc.

According to the prospectus, from 2017 to 2019, the company's azithromycin API, clarithromycin API and (hydrochloric acid, lactic acid) ciprofloxacin API exports accounted for the first place in China, and individual product exports accounted for even more than 50% of our total export volume ratio. In addition, the company has more than 20 mature and advantageous products in the fields of antibiotics, cardiovascular system, respiratory system, urinary system and anti-tumor.

In such a situation, Guobang Pharma has all the conditions, and at present, the company is already steadily pushing forward the in-depth cooperation with Abbott Group on clarithromycin formulation to promote CMO business. This also means that, as a Chinese pharmaceutical industry top 100 enterprise for global market, multi-species, with a variety of key intermediates self-production capability and a leading pharmaceutical platform, the company is accelerating its integration into the global API manufacturing regulation system and supply chain division of labor, helping the domestic API industry will have a new upgrade based on long-termism.