Beijing Sun-Novo Pharmaceutical Research Co.Ltd(688621) (688621)
Strategic overweight of innovative drug cro business and continuous deepening of generic drug cro business
The company was established in March 2009 and was listed on the science and Innovation Board of Shanghai Stock Exchange in June 2021. In recent years, on the basis of continuously deepening the cro business of generic drugs, Continue to strengthen the layout of innovative drug business lines (clinical cro, bioanalysis, preclinical research cro, etc.), in-depth layout of generic drug tracks such as children's drugs and rare diseases, and continuously enrich the layout of independent products (polypeptide innovative drugs, improved new drugs and generic drugs), and gradually form "generic cro + innovative drug cro + independent products" Cro suppliers with multi business whole process layout. In the first half of 2021, the company signed 439 million yuan of new orders, with a year-on-year increase of 65.85%, and the cumulative stock orders reached 1.347 billion yuan, laying a foundation for future performance growth. Looking forward to the future, the company will continue to strategically overweight the innovative drug cro business and deeply cultivate the generic drug cro business. It is expected that the future performance will continue to show rapid growth.
Cut into the track of clinical cro and preclinical cro of innovative drugs and strategically overweight the cro business of innovative drugs
With the reform of China's CDE drug review and its gradual alignment with the world, and the accelerated access of innovative drugs by the National Health Insurance Bureau through health insurance negotiations, China's innovation has become more and more prosperous in recent years. According to the drug review database of Intranet, 323 class 1 Chemicals and 271 class 1 therapeutic biological products were applied for clinical application from January to November 2021, with an overall year-on-year increase of 69.2%, continuing to show a trend of rapid growth. We judge that the demand for clinical trials in China will show a trend of rapid growth, that is, the clinical cro track will show a high momentum. The company was established in 2016, sunshine delta began to expand its biological analysis business, acquired novo Delta in 2018 to accelerate the layout of clinical cro business, established holding subsidiaries Shanghai paisixin and Nanjing Xianning pharmaceutical through the "partnership model" with holding subsidiaries in 2021, and accelerated the layout of innovative drug cro business such as "clinical cro + biological analysis + preclinical research cro business". Through the "partner model", the company accelerates the layout of innovative drug cro business such as clinical cro and preclinical cro. With the continuous acceleration of business layout and the expansion of new customers, looking forward to the next three years, we judge that the company's innovative drug cro business will be in rapid growth.
There is a high-profile generic cro track with significantly poor expectations. Looking forward to the next three years, the company's generic cro business will continue to show rapid growth
Since its establishment in 2009, the company has been deeply engaged in generic drug cro business, and has formed an integrated service platform of "drug research service + be". Since 2017, driven by the promotion of China's generic drug consistency evaluation policy and the steady promotion of centralized drug procurement by the medical insurance bureau, the company, as the leader of China's generic drug cro, has continued to benefit from the high momentum of the industry, That is, the company's generic drug cro business in 2020 (pharmaceutical research + be) achieved an operating revenue of 310 million yuan, a year-on-year increase of 52.9%, and continued to show rapid growth. In addition, the company's generic cro business had an order size of 992 million yuan at the end of 2020, which also ensured the rapid growth of business in the next 1 ~ 2 years. Looking forward to the next 3 years, the company will continue to deeply cultivate the generic cro business and continue to focus on the characteristic generic drugs such as children's drugs and special dosage forms The layout of the pharmaceutical field will continue to benefit from the industry dividend brought by the centralized volume procurement of generic drugs, and the generic cro business will continue the trend of rapid growth.
Rich independent products under research continue to be distributed, which will bring potential driving force for future performance growth
In addition to developing the varieties specified by customers, the company is also actively reserving self-developed products, mainly polypeptide innovative drugs, improved new drugs and difficult to imitate generic drugs. The company's R & D expenditure in the first three quarters of 2021 was 36 million yuan, a year-on-year increase of 78.96%, accounting for 10.5% of operating revenue. R & D expenditure is mainly used for projects independently approved. At present, more than 80 projects under research have been reserved, including 7 projects of class 1 innovative drugs, 5 projects of improved new drugs and more than 70 projects of generic drugs. Looking forward to the future, the company will continue to enrich the reserve pipeline of innovative drugs, improved new drugs and generic drugs, and continue to contribute to the performance increment for the future performance growth.
Performance forecast and investment suggestions
The company continues to develop the generic drug cro business, while strategically overweight the innovative drug cro business and gradually enrich the layout of independent products contribute to the core growth power for future performance growth. We predict that the revenue in 21-23 will be RMB 497 / 692 / 956 million respectively, EPS will be RMB 1.38/1.91/2.64 respectively, corresponding to the closing price of RMB 122.00/share on December 13, 2021, and PE will be 88.64/63.79/46.19 respectively, First coverage and "buy" rating of the company.
Risk statement
(1) the loss of core technology backbone and management; (2) the risk of future uncertainty in the generic CRO industry; (3) the future strategic layout of clinical CRO business and biological analysis business are uncertain; (4) exchange rate fluctuation risk; (5) the impact of New Coronavirus epidemic.
