Guiyang Xintian Pharmaceutical Co.Ltd(002873) (002873)
Key investment points
The inflection point of traditional Chinese medicine policy appears, and the tone of encouraging inheritance and innovation is clear. The new requirements for registration classification and application materials of traditional Chinese medicine defines the registration classification standards of traditional Chinese medicine, and constructs and improves the review and approval mechanism in line with the characteristics of traditional Chinese medicine. Traditional Chinese medicine is divided into four categories: innovative traditional Chinese medicine, improved new traditional Chinese medicine, ancient classic prescription compound, and the same prescription with the same name. The new classification standard desalinates the content requirements of “effective ingredients” and “effective parts” in the original registration classification management, no longer only takes the material basis as the basis for dividing the registration categories, but supports the evaluation of the effectiveness of traditional Chinese medicine based on the theory of traditional Chinese medicine and the clinical practice experience of traditional Chinese medicine, and strengthens the adjustment of curative effect. At the same time, it is also required to establish the evaluation mechanism of traditional Chinese medicine resources and strengthen the quality control of the whole process of traditional Chinese medicine development. After the new registration classification is clear, the number of clinical applications and listing of new traditional Chinese medicine has increased significantly. From 2018 to 2021, the number of new TCM drugs applied for clinical application was 2, 0, 9 and 30 respectively, and the number of new TCM drugs approved for listing from 2019 to 2021 was 2, 4 and 9 respectively.
The company focuses on innovative traditional Chinese medicine. The listed Kuntai Capsule, Ningbitai Capsule and the products to be listed of the company, if they are developed now, they all belong to class 1 new traditional Chinese medicine according to the new classification standard. In the research process, the company does not stick to the identity of “traditional Chinese medicine”, takes the clinical first-line therapy as the control, and pays attention to the research of evidence-based medical evidence and treatment mechanism. The clinical trial design includes head-to-head comparison with the first-line medication, or random and double-blind control with placebo. It adopts modern research methodology for research, and the data can stand the test. At the same time, the company also prospectively arranged the drug traceability system to control the quality of Chinese patent medicine at the source.
The company’s equity incentive target doubled in three years. In terms of product layout, secondary development of old products + research and development of new varieties + tapping the potential of second-line varieties are adopted. The company carries out secondary development of old products and prolongs the product life cycle by expanding indications. The 3 clinical research products: yutun granule, Long Qin pelvic cavity granule and Ku Er Jie Yin gel have finished their clinical practice. While doing a good job in gynecology big single product Kuntai Capsule, the company has formed a gynecology product cluster. In the long term, it will gradually expand to andrology, pediatrics and other fields. At the sales level, expand channels. On the one hand, deepen the in-hospital market and continuously increase the hospital coverage. On the other hand, increase the investment in OTC channels, tap the sales potential of OTC channels, and strive to increase the sales proportion of out of hospital channels from the current 20% ~ 30% to more than 50%. The company has sufficient production capacity and supply guarantee. The equity incentive target has doubled in three years, and we think it will probably be completed more than expected.
Investment suggestion: we estimate that the company’s operating revenue from 2021 to 2023 will be 1.003 billion yuan, 1.319 billion yuan and 1.717 billion yuan respectively, with a year-on-year increase of 33.56%, 31.49% and 30.18% respectively, and the net profit attributable to the parent company will be 100 million yuan, 138 million yuan and 189 million yuan respectively, with a year-on-year increase of 35.07%, 37.66% and 37.41%. We are optimistic about the development of the company in the future and cover it for the first time, Give the company a “buy-b” rating.
Risk tips: industry policy risks; Product R & D risk; Drug quality risk; Risk of high equity pledge rate, etc.
