\u3000\u3 Guocheng Mining Co.Ltd(000688) 105 Nanjing Vazyme Biotech Co.Ltd(688105) )
The demand for biological reagents in China is growing rapidly, and domestic brands have large replacement space. Biological research reagent products are just needed products in life science research. China’s biological reagent market is expected to grow to US $24.6 billion in 2024. The market scale is growing rapidly, and the CAGR is expected to be 13.8% within five years. China’s biological reagent industry started late, and there is a certain gap between domestic brands and mature multinational enterprises. The market share of imported brands of molecular enzyme reagents is more than 70%, and the market share of imported brands in antibody products is close to 90%. China’s biological reagent market is still mainly occupied by imported products. Due to the strong demand for import substitution, Acrobiosystems Co.Ltd(301080) , Sino Biological Inc(301047) , Nanjing Vazyme Biotech Co.Ltd(688105) and other domestic biological reagent leading companies increased their routine business by more than 30% from 2017 to 2020, up to 70%. During the covid-19 epidemic, domestic brands responded rapidly and their market recognition continued to improve, which will accelerate the process of domestic substitution and internationalization.
Nanjing Vazyme Biotech Co.Ltd(688105) has strong R & D strength, and the company is in a period of rapid growth. The company’s R & D investment continued to increase from 2020 to 2021. In 2021, the R & D expenditure reached 232 million yuan, a year-on-year increase of about 85%, far exceeding the industry average. The company has the advantages of self-development and self-production of self-control core raw materials, stable and reliable product supply, and the revenue contribution of self-produced raw materials is up to more than 95%. Relying on the independently developed technology platform, the company has more than 500 kinds of biological reagent products. The performance of the main products is comparable to the international advanced level. The downstream customers cover more than 1000 universities and more than 1600 industrial customers. The domestic market accounts for the first. It is the leading supplier of molecular enzyme reagents in China. The company launches more than 50 new products every year. The business layout is extensible and forward-looking. The strong synergy between upstream and downstream continues to strengthen, and the scale of the company is expected to achieve sustained and rapid growth. After excluding covid-19 business, the revenue of conventional business in 2021 was about 718 million yuan, with a year-on-year increase of about 92%. The revenue of conventional business CAGR in 20172021 reached 59%. The rapid response during covid-19 epidemic established a good reputation for the company and drove the continuous and rapid rise of the revenue of conventional products.
The core raw materials of biological reagents are self-developed and self-produced, which can quickly respond to the needs of covid-19 epidemic prevention and control. As the raw material for the R & D and production of covid-19 detection reagent, biological reagent has generated a large amount of market demand during the epidemic. With the advantage of self production of core raw materials, the company quickly responded to the needs of covid-19 virus research and prevention and control, and realized the large-scale production of relevant biological reagents. In 2020, it provided more than 300 million copies of relevant biological reagents. It is one of the main suppliers of key raw materials of covid-19 nucleic acid detection reagents in China, and the company’s revenue has increased explosively. In 2021, the total revenue was about 1.864 billion yuan, with a year-on-year increase of 19.13%, of which the revenue of covid-19 related products reached 1.146 billion yuan. Nucleic acid detection is still the gold standard for covid-19 diagnosis. The domestic and foreign sales of relevant detection enzyme products in 2021 are much higher than that in the same period last year. It is expected that the demand for nucleic acid detection enzymes in China and overseas will continue in 2022.
POCT diagnostic reagent business has entered the fast lane Nanjing Vazyme Biotech Co.Ltd(688105) as a domestic leading enterprise of molecular biological reagents, it has the ability of self-development and self-production of POCT key raw materials and has great competitive advantage in the supply chain. During the covid-19 epidemic, the company quickly produced the core raw materials required for covid-19 detection kit by using the technical accumulation in biological reagents, and its self-produced proportion was close to 99%, helping the company quickly seize the market. Covid-19 antibody detection kit is exported to more than 30 countries and regions in Southeast Asia, South America and Europe, with a cumulative sales of 31 million copies in 2020. In 2020, POCT diagnostic reagents achieved a revenue of 560 million yuan, a year-on-year increase of about 19 times. With the recurrence of overseas outbreaks, the export of relevant covid-19 antigen detection reagents still has a certain sustainability.
Cutting into the pharmaceutical R & D field downstream of the supply chain is expected to bring more revenue space to the company. The company has made a breakthrough in the research and development of covid-19 neutralizing antibody, and has carried out transfer authorization and subsequent development in cooperation with pharmaceutical enterprises; By providing relevant immunogenicity clinical cro evaluation services for Chinese covid-19 vaccine enterprises, we can participate in the vaccine R & D process and further provide GMP enzyme raw materials for mRNA vaccine enterprises. Covid-19 epidemic accelerated the company’s entry into the drug R & D and vaccine industry chain.
Profit forecast and investment rating. With the rapid development of the company’s business, it is estimated that the company’s revenue from 2021 to 2023 will be RMB 1.867/19.792214 billion respectively, with a growth rate of 19.3% / 6.0% / 11.9%, and the net profit attributable to the parent company will be RMB 680 / 711 / 785 million respectively, with a growth rate of – 17.2% / 4.5% / 10.4%. The corresponding EPS from 2021 to 2023 is 1.70/1.78/1.96 yuan and PE is 49 / 46 / 42 times. For the first time, give a “buy” rating.
