Before the share price of vaccine companies retreated to covid-19, we believe that this reflects the decline of profit contribution margin of Chinese vaccine companies ① covid-19: repeated epidemic + increase of vaccination rate + impact of specific drugs on the market; ② Low level of innovation: under the application of leading new technologies (mRNA, etc.) of overseas vaccines, the me too projects of Chinese vaccine companies are centralized, and the production process is relatively backward; ③ Pessimistic growth expectations: the new vaccine pipeline has a long listing cycle, scattered sales channels, and the birth rate continues to decline. We can’t see the growth curve of China’s vaccine consumption attribute. Our view is:
China vaccine company will have the opportunity to overtake on the curve in the next 5-10 years. The consumption / procurement environment determines the pipeline competitiveness gap between Chinese and foreign companies. In the next 5-10 years, the application of new technologies (vaccine structure design and platform technology) will bring opportunities for overtaking in pipeline bends.
China’s vaccine is still a good business, but the key is a forward-looking product project. We estimate that the decline of birth rate has limited impact on product space / company performance, and large single products pile up, but it solves the problems of supply side and market promotion. The core variable is the potential change of “optimal purchasing power”.
Recommendation: looking for “large-scale window period + technical capability” α” ， In the short term, we should look at the attributes of consumer goods, and in the medium and long term, we should look at the attributes of scientific and technological products.
DCF valuation and investment advice
We suggest that in the short and medium term, we should pay attention to the structural improvement under consumption upgrading (multiple high prices + vaccines with lower side effects) + supply release (centralized listing), the investment window brought by the large volume of single products, pay attention to the upgrading of pipeline under research, and the opportunity of overtaking on the curve of me better or even first in class varieties.
Investment suggestion: it is suggested to pay attention to Chongqing Zhifei Biological Products Co.Ltd(300122) , Cansino Biologics Inc(688185) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Changchun Bcht Biotechnology Co(688276) , Chengdu Kanghua Biological Products Co.Ltd(300841) , Chengdu Olymvax Biopharmaceuticals Inc(688319) and other companies.
Risk warning: the risk that the clinical promotion speed of vaccine is lower than expected, the risk of vaccine supervision / procurement policy change, and the risk of production / transportation safety accidents.
