Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) (603456)
Event: on January 3, 2022, the company issued an announcement on the equity acquisition of Nanjing kangchuanji Pharmaceutical Technology Co., Ltd., which plans to acquire 25.76% equity of kangchuanji pharmaceutical with its own capital of 40 million yuan, and invest 80 million yuan to increase the capital of kangchuanji pharmaceutical. After the completion of this transaction, kangchuanji pharmaceutical will become the holding subsidiary of the company, and the company holds 51% equity of kangchuanji pharmaceutical in total.
comment:
Kangchuanji pharmaceutical – a powerful pharmaceutical R & D company. Kangchuanji pharmaceutical was founded in 2013. Its main business is CMC research of innovative drug preparations, R & D of new dosage forms of improved drugs and consistency evaluation services. The company has strong R & D strength in the field of drug preparations, has advanced preparation technology platforms such as slow and controlled release, soft capsule, oral instant, topical preparations and injection agents, and has the ability to deliver phase I and II clinical trial samples of innovative drugs. The company has more than 60 R & D personnel, and its core team is composed of several senior professors from China Pharmaceutical University, with more than 20 years of rich R & D experience. At present, the company has project experience and about 70 projects under research, has achieved more than 30 high-end generic technology transfers, has completed more than 10 project applications, and has obtained 6 drug registration approvals.
Frequent acquisitions, accelerate the integrated layout of API + Preparation cdmo, and consolidate and enhance China’s leading position. The traditional advantageous business of Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) is the API CMO business. After more than ten years of development, it has gradually formed two major sectors: cdmo business, API and intermediate business. In recent years, the company has carried out a number of mergers and acquisitions around these two businesses: for example, it acquired Suzhou Novartis factory in September 2019 to greatly improve the API production capacity; In the same month, it acquired pharmagra labs, Inc. and pharmagra holding company, LLC. to improve its R & D capability; In August 2020, a joint venture subsidiary was established with Shanghai Pharmaceuticals Holding Co.Ltd(601607) to layout the integrated business of API preparations; In November 2021, Teva Hangzhou plant was acquired to enhance the production capacity of API. This acquisition will enhance the company’s R & D capacity of cdmo preparations, improve the company’s integrated layout from CMC R & D to commercial production in small molecule APIs and preparations, enhance customer stickiness, further consolidate the company’s leading position in China’s cdmo industry, and realize the company’s long-term sustainable and rapid development.
Profit forecast: it is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 3.814 billion, 4.984 billion and 6.224 billion, with a year-on-year increase of 44.1%, 30.7% and 24.9%; The net profit attributable to the parent company was RMB 655 million, RMB 888 million and RMB 1114 million respectively, with a year-on-year increase of 72.2%, 35.5% and 25.5%, corresponding to 71 / 53 / 42 times of PE from 2021 to 2023.
Risk factors: the risk of intensified industry competition, the risk of policy impact, the risk of international policy change, the risk of loss of core technicians, etc.
