Since the beginning of this year, the stock price of the pharmaceutical industry has continued to decline, which has not only impacted the pharmaceutical fund, but also put pressure on the pharmaceutical new shares.
Data show that since the beginning of last year (February 16), 565 companies (Shanghai, Shenzhen and North) have successfully landed in the A-share market. Among them, the share prices of 76 companies still fall below the issue price, accounting for 13.45% of the total number of companies issuing A-Shares during the period.
It is worth noting that of the more than 70 companies that fell below the issue price, 11 are pharmaceutical manufacturing enterprises. In addition, the share prices of 28 companies fell by more than 20% compared with the issue price. Among them, Aojie technology fell 44.58%, Maiwei biology fell 38.76%, Baiji Shenzhou fell 38.11%, Dizhe medicine fell 37.98% and Liaoning Chengda Biotechnology Co.Ltd(688739) fell 37%, ranking among the top five declines.
unprofitable pharmaceutical stocks broke in depth
Since the release of the new regulations on IPO inquiry, A-share innovation is no longer “steady profit without loss”.
Since the beginning of last year (February 16), 565 companies (Shanghai, Shenzhen and North) have successfully landed in the A-share market. Among them, the share prices of 76 companies still fall below the issue price, accounting for 13.45% of the total number of companies issuing A-Shares during the period. It is worth noting that of the more than 70 companies that fell below the issue price, 11 are pharmaceutical manufacturing; Four of the top five new shares were pharmaceutical companies.
As of November, the price of Baxter bio fell by 38.00% and Baxter bio fell by 16.38% compared with that of Baxter bio, which fell by 872.00%.
On January 18 this year, Maiwei biology, which landed on the science and innovation board, broke off at the opening, with an intraday decline of more than 30%. As of the closing of the day, it fell 29.6% to 24.50 yuan, while as of February 16, Maiwei biology had fallen 38.76% compared with the issue price
Maiwei bio is an innovative biopharmaceutical enterprise established in 2017. Its main business is the R & D, production and sales of therapeutic biological products, mainly including a variety of antibody drugs. However, up to now, Maiwei biology has no products on the market. All varieties of the company are in the research and development stage, and have not yet carried out commercial production and sales, and there is no drug sales revenue.
With no revenue source and continuous large-scale R & D investment, the loss of Maiwei biology gradually expanded. From 2018 to 2020, the net losses of Maiwei biology were 225 million yuan, 928 million yuan and 643 million yuan respectively. From January to September 2021, the net loss of Maiwei biology was 515 million yuan. Maiwei biology originally planned to raise 3.165 billion yuan in IPO, and eventually raised more than 3.477 billion yuan.
Compared with Baiji Shenzhou, whose offering price has fallen by 38.11%, it broke off on the first day of listing on December 15 last year. Founded in 2010, Baiji Shenzhou focuses on research, development, production and commercialization of innovative drugs. At present, Baiji Shenzhou has 49 commercial products and clinical stage candidate drugs, including 12 commercial stage drugs and 37 clinical stage candidate drugs. In addition, among the company’s more than 50 ongoing preclinical projects, many research projects have “first in class” potential.
However, Baiji Shenzhou is not profitable at present. According to the prospectus data, from 2018 to the first half of 2021, the net profits of Baiji Shenzhou were -4.747 billion yuan, – 6.915 billion yuan, 1.384 billion yuan and -2.493 billion yuan respectively. As of June 30, 2021, the accumulated undistributed profit of the company has reached -30.076 billion yuan.
The main reason for the loss came from the high R & D investment of Baiji Shenzhou. From 2018 to the first half of 2021, Baiji Shenzhou’s R & D expenditure was 4.597 billion yuan, 6.588 billion yuan, 8.943 billion yuan and 4.151 billion yuan respectively, and the proportion of R & D in revenue was as high as 350.88%, 223.03%, 421.78% and 84.88% respectively. Both the volume scale and R & D expense rate are much higher than those of comparable companies.
Yahong pharmaceutical, which has not yet made a profit, fell 33.12% compared with the issue price as of February 16.
unprofitable pharmaceutical enterprises have attracted much attention
The superposition of high issue price has not been profitable, which is a major reason for the intensive breaking of new pharmaceutical shares. Maiwei biology, Baiji Shenzhou and Dizhe medicine, which ranked among the top four in the decline, are unprofitable companies.
Some market participants pointed out that in the past two years, although the capital market has opened the door to unprofitable biomedical enterprises and more and more innovative pharmaceutical enterprises have flocked to the capital market, with the passage of time, in the face of investors, how to fulfill the value commitment through commercialization has become the core question that many listed pharmaceutical enterprises must answer.
Overall, 34 new shares of pharmaceutical manufacturing industry have been listed since last year. As of February 16, 11 new ones had been broken, accounting for 32.35%. Among them, there are 6 new shares on the science and innovation board that have fallen by more than 20% compared with the issue price.
However, since last year, 11 new shares in pharmaceutical manufacturing industry have doubled. Among them, Xinxiang Tuoxin Pharmaceutical Co.Ltd(301089) , Shenzhen Bioeasy Biotechnology Co.Ltd(300942) increased by more than 400% compared with the issue price. The shares of the above two companies rose sharply due to the concept of covid-19 detection reagent.
Since this year, with the continuous downward trend of the pharmaceutical sector, the breaking range of new shares in the pharmaceutical manufacturing industry listed recently has also been greater.
Some market participants pointed out that the current medical sector is the adjustment after the sharp rise, and may not have been adjusted in place. However, in the long run, we are still optimistic about medical treatment. From the length of 3 to 5 years, the return of medical treatment sector will be good. If the target quality is high and the positions are scattered, we will get a higher return on investment.
Looking back on the trend of the pharmaceutical industry, in the fourth quarter of 2018, due to the double blow of “vaccine incident” and “volume procurement”, the market also fell to despair. These two “Black Swans” made the market lose the “anchor” of enterprise value judgment for a time. But then the pharmaceutical industry also walked out of the recovery channel.
With regard to the income of new shares under the registration system in the future, Guotai Junan Securities Co.Ltd(601211) at the cloud annual meeting of capital market in 2022, Guotai Junan Securities Co.Ltd(601211) chief analyst of new shares Wang Zhengzhi said that from the perspective of the process of market-oriented reform in the history of a shares, market-oriented issuance will bring fierce game confrontation between buyers and sellers, Finally, the equilibrium pricing level of the whole buyer and seller is reached. Therefore, in the process of making new quotations in the future, we must accept that the invincibility of new shares is a thing of the past, and the breaking rate of 20% in the future may be the norm. Secondly, we need to be more cautious about the selection of individual shares with certain breaking characteristics (high raising ratio, high absolute value issuance, etc.).
