Shenzhen Yhlo Biotech Co.Ltd(688575) (688575)
Event: the company’s covid-19 antigen self-test kit obtained EU CE certification
The company has recently disclosed its independent research and development New Coronavirus (SARS-CoV-2) antigen detection kit (colloidal gold immunochromatography) has recently obtained the EU CE certificate, which can be sold in the EU countries and the EU accredited CE certification countries. The reagent can be used for home self testing.
Short term: European covid-19 self inspection products are highly competitive, and the performance contribution remains to be seen
On the one hand, the international covid-19 epidemic continues to be severe. Being fast, simple and decentralized has become the core requirement for covid-19 screening and testing products in the overseas market. In the long run, the antigen home self-test kit has great market potential. On the other hand, at present, the covid-19 antigen detection products of many IVD enterprises in China have been approved in the EU market and even occupy a large market share, such as Baotai biology and Beijing Hotgen Biotech Co.Ltd(688068) which have won orders in the UK and Germany, and Guangzhou Wondfo Biotech Co.Ltd(300482) and Getein Biotech Inc(603387) which have obtained the EU CE certification of covid-19 antigen self-test kit in June and early August 2021 respectively. Considering the fierce market competition, Due to factors such as the digestion cycle of product inventory and dealers’ preparation in advance before Christmas, we are cautious about the short-term performance improvement of the product.
Long term: optimistic about accelerating the pace of internationalization and seizing the highland of markets outside China
The company previously announced that 14 chemiluminescence kit products obtained ivdrce certificate on October 23, and announced the company’s iflash1800 chemiluminescence immunoanalyzer and iflashtotal on December 16 β hCG The human chorionic gonadotropin (hCG) kit has passed the FDA review. In combination with the approval of the covid-19 test product this time, we pay more attention to the continuous acceleration of the company’s internationalization pace than the sales profit of the simple covid-19 test product. The company’s products have outstanding quality and high cost performance recognized by the customers of the third class hospital in China, and we are optimistic about the company’s continuous implementation in the international market The development strategy of “seizing the highland”.
Profit forecast and valuation
Considering the severe impact of the overseas covid-19 epidemic situation, we expect the company’s EPS to be 0.57, 0.80 and 1.10 yuan / share from 2021 to 2023. The closing price on December 17, 2021 corresponds to 51 times of PE in 2021 (36 times of PE in 2022), maintaining the “overweight” rating.
Risk statement
The installation of chemiluminescence instruments is less than expected risk; Risk that the sales volume of reagent products is lower than expected; Industry competition intensifies 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.
