Event: on February 8, 2022, the Bureau of industry and security of the U.S. Department of Commerce issued an updated “unverified list (UVL list)”, which added 33 Chinese units, including Yao Ming biology. Combined with the short-term, medium and long-term impact of the “UVL list”, we believe that the impact of this UVL list on Chinese CXO companies such as YaoMing biology is limited, and the prosperity of CXO industry continues.
UVL has limited impact on China’s CXO company, and the prosperity of CXO industry continues: on February 8, 2022, the Bureau of industry and safety of the U.S. Department of Commerce issued an updated “unverified list (UVL list)”, which included 33 Chinese units such as YaoMing biology. The “UVL list” is different from the “entity list”, and its impact is mainly reflected in the temporary inability to accept U.S. exports through licensing exceptions, but the entity can be removed from the UVL list after being verified by the U.S. Department of Commerce. For Yaoming bio, in the short term, the controlled commodities involved include bioreactors and some filters. At present, the Shanghai and Wuxi companies involved have completed production capacity construction and do not need to import controlled commodities in the short term. In the medium and long term, the use of controlled commodities imported by Yaoming biology is compliant, and the company will cooperate with the U.S. Department of Commerce to verify it in order to remove it from the UVL list. In addition, there are alternative suppliers of bioreactors and some filters in Europe and China. To sum up, we believe that this UVL list has a limited impact on Chinese CXO companies such as YaoMing biology. Its global industrial advantages are prominent, and R & D and production outsourcing orders are expected to continue to transfer to China.
The prosperity of China’s CXO industry continues, and the valuation of CXO listed companies returns to a reasonable range: according to the exclusive CXO multi-dimensional tracking system of Anxin pharmaceutical, China’s CXO industry still maintains a high outlook. At the macro level, according to the data of CrunchBase, in January 2022, the investment and financing amount of global and China Meheco Group Co.Ltd(600056) industry VC & PE was US $7.729 billion and US $1.072 billion respectively, with a year-on-year increase of 10.44% and 138.28% respectively, and the investment and financing of innovative drugs continued to grow; At the meso level, combined with the disclosed performance forecast of CXO listed companies, the performance will continue to grow at a high rate in 2021; At the micro level, the continuous investment in fixed assets / construction in progress and the rapid growth in the number of employees indicate that the future performance of CXO listed companies is expected to grow high; At the valuation level, as of February 7, 2022, the current PE of CXO listed companies in 2022 was 49 times, lower than the average PE in 2019, and the valuation returned to a reasonable range.
Risk tip: the industry boom is less than expected, the risk of major changes in industry regulatory policies, increasingly fierce competition from similar overseas enterprises, rising labor costs and exchange rate risk.
