\u3000\u3000 Shenzhen Yhlo Biotech Co.Ltd(688575) (688575)
Event: covid-19 antigen self-test kit of the company has successively obtained Japan PMDA certification and purchase order
On February 10, the company announced that the covid-19 antigen detection kit of its Japanese partner MBL had obtained the Japanese PMDA certification. The product can be used for home self-test, and the company designated the manufacturer for the product; On February 13, the company announced again that it had received the purchase order from MBL, with a total price and tax of US $52.9417 million (including freight and insurance premium), and would complete the delivery within 30 days after the company received the advance payment from MBL.
Japanese market: the antigen self-test incremental market is opened, and the rapid admission is expected to make a lot of profits
Affected by the global outbreak of Omicron variant, the number of covid-19 confirmed cases in Japan has risen rapidly since 2022, once exceeding 100000 in February. In the face of the severe epidemic situation, Japan issued a policy on January 24, requiring qualified people to self-test through covid-19 test kit to divert medical institutions; At the same time, covid-19 self-test kit was provided free of charge in Tokyo on February 8. The implementation of the above policies has brought a huge demand for covid-19 antigen self-test kit, accelerated the approval of products and opened the incremental market.
In terms of market scale, according to the data of Johns Hopkins University, the current covid-19 daily detection rate in Japan is about 1.8 ‰, which is significantly lower than that of other European and American developed countries. We assume that under the influence of the epidemic situation and policies, the apparent daily detection rate rises to 3.6 ‰, all the detection comes from antigen self-examination, and the reporting rate is 50%, Then the daily consumption of covid-19 antigen self-test products is about 7.2 ‰ of the population, that is, about 900000 people / day; In terms of price, at present, the terminal retail price of similar products in the Japanese market is generally more than 1000 yen. Considering that the subsequent supply and demand tension may be alleviated, we calculate according to the terminal price of $5 / person, the corresponding annual market scale is about 1.64 billion US dollars. Considering the first mover advantage and brand effect, Shenzhen Yhlo Biotech Co.Ltd(688575) is expected to receive further orders and continue to benefit.
Long term view: the overseas expansion ability has been verified again, and there is broad room for development
The covid-19 self-test kit of the company took the lead in entering the Japanese market. We believe that this is a sign that the company’s overseas expansion ability and product quality have been further verified after obtaining the EU CE certification. From the previous experience of covid-19 molecular testing products related companies, the export of anti epidemic materials has played a certain role in “paving the way” for the overseas registration, sales and even overseas investment, M & A and factory establishment of the company’s non covid-19 high-quality products. Therefore, in addition to the contribution of the long-term demand for covid-19 testing products to the performance, we pay more attention to the continuous acceleration of the company’s internationalization and the development space for the company’s non covid-19 products that have been recognized by the customers of China’s top three hospitals.
Profit forecast and valuation
Considering the export profit of covid-19 kit, we raised the company’s EPS from 2022 to 2023 to 1.37 and 1.56 yuan / share. The closing price on February 13, 2022 corresponds to 32 times of PE in 2022, maintaining the “overweight” rating.
Risk tips
The installation of chemiluminescence instruments is less than the expected risk; Risk that the sales volume of reagent products is lower than expected; Industry competition intensifies and the risk of product price decline; Risk that the R & D Progress of new products is less than expected; Upstream raw material price fluctuation risk; Policy risk, etc
