\u3000\u3000 Heilongjiang Zbd Pharmaceutical Co.Ltd(603567) (603567)
Recommendation logic: 1) secondary development improves the quality standard of traditional Chinese medicine preparations. The compound annual sales growth rate of the company’s 100mg Xuesaitong injection sample hospital from 2019 to 2021 is 128%, and the new specifications are expected to promote the continuous growth of revenue in the future; In recent years, the state has issued a number of policies to encourage the inheritance, innovation and development of traditional Chinese medicine. The company’s oral traditional Chinese medicine preparation is expected to open up new channels and accelerate the large-scale production; The layout of upstream medicine trading center, traditional Chinese medicine innovative drugs, in-hospital preparations, traditional Chinese medicine formula particles and variety M & A has brought new performance growth points. 2) Invest in tress, whose pipeline under research covers 2 biological analogues and 4 ADCs, and carry out Sino US double reporting on a variety of products. Bevacizumab biological analogue trs003 is expected to be approved by FDA in recent years and become the first interchangeable bevacizumab biological analogue; The target of the innovative ADC drug trs005 is CD20. There is no similar product on the market all over the world, which is expected to bring new treatment methods to patients with non-Hodgkin’s lymphoma.
Favorable policies, channel expansion + new varieties promote the growth of traditional Chinese medicine. In recent years, the state has issued a number of policies to encourage the inheritance, innovation and development of traditional Chinese medicine. The company has launched a new specification of 100mg Xuesaitong for injection, and the secondary development has improved the quality standard. The new specification is expected to promote the continuous growth of its revenue; The company’s Xueshuantong capsule and other oral preparations of traditional Chinese medicine have been included in the medical insurance. In 2021, the new version of the medical insurance abolished the restriction that the payment of the above products is only limited to outpatient clinics and designated pharmacies of medical insurance, and the volume of relevant products is expected to accelerate; The company established Bozhou medicinal materials trading center to integrate into the upstream of the industrial chain and help the development of downstream products; The company cooperates with medical institutions in key provinces to develop in-hospital preparations, and speeds up the filing of formula particles by purchasing and supplementing innovative traditional Chinese medicine and creating exclusive varieties.
Invest in tress and layout innovative biological drugs. The company and shareholders jointly invest in tress, of which the listed company holds 16.67% equity of tress. Tress’s senior management team has a deep international industry background. The founder, Dr. Wu Youling, has worked in many well-known overseas pharmaceutical companies such as Squibb, Johnson & Johnson, Sanofi (jianzan) and Seattle gene. The pipeline under research by tres covers biological analogues and innovative ADC. The products are mainly self-developed, supplemented by introduction. A variety of products carry out Sino US double reporting. The product with the fastest development progress, bevacizumab biological analogue trs003, is currently in the global multi center phase III clinical research, and is expected to be approved by FDA in recent years and become the first interchangeable bevacizumab biological analogue. Trs005, an innovative ADC drug targeting CD20, is currently in phase I clinical research and is expected to bring new treatments to patients with non-Hodgkin’s lymphoma.
Profit forecast: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 520 million yuan, 620 million yuan and 760 million yuan, with an annual compound growth rate of 21%, corresponding to EPS of 0.55 yuan, 0.66 yuan and 0.80 yuan respectively, and corresponding PE of 27 times, 23 times and 19 times. The company’s traditional Chinese medicine injection and oral preparations are expected to accelerate their growth due to favorable policies. It is expected to invest in tress’s layout, innovate the internationalization of biological drugs, and its future development is worth looking forward to.
Risk tips: centralized purchase policy risk of Chinese patent medicine, R & D risk and deterioration risk of competition pattern.
