\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 276 Jiangsu Hengrui Medicine Co.Ltd(600276) )
Events
On March 13, 2022, Jiangsu Hengrui Medicine Co.Ltd(600276) announced that it planned to buy back the company’s shares for employee stock ownership plan or equity incentive. The repurchase price was no more than RMB 60.22/share, and the total repurchase fund was RMB 600 million to 1.2 billion.
Comments
The company plans to buy back its shares with its own funds. The implementation period of repurchase is within 12 months. The repurchase method is centralized bidding transaction through Shanghai Stock Exchange. The repurchased shares will be used for employee stock ownership plan or equity incentive, which is conducive to improving the long-term incentive mechanism of employees and fully mobilizing the enthusiasm of employees.
The repurchase price shall not exceed 60.22 yuan / share (inclusive), and the upper limit of the repurchase price shall not be higher than 150% of the average trading price of the company’s shares 30 trading days before the board of directors deliberated and approved the repurchase plan. The total amount of funds to be used for repurchase by the company shall not be less than 600 million yuan and not more than 1.2 billion yuan. Based on the calculation of the maximum repurchase capital of RMB 1.2 billion and the maximum repurchase price of RMB 60.22/share, the number of shares repurchased is expected to be about 199269 million, accounting for about 0.31% of the current total share capital of the company. This repurchase demonstrates the company’s confidence in future development prospects and its determination to safeguard the interests of the company and investors.
Jiangsu Hengrui Medicine Co.Ltd(600276) ‘s proportion of innovative drug revenue has increased from 34% in 2020 to about 40% in the first half of 2021. Since the second half of 2021, the company has made breakthroughs in innovative drugs. On December 3, 2021, the national medical insurance administration announced the adjustment results of the national medical insurance drug catalogue in 20216 Qingdao Gon Technology Co.Ltd(002768) innovative drugs that have been listed are all included in the medical insurance catalogue, and new products are about to usher in a large-scale period. In December 2021, Jiangsu Hengrui Medicine Co.Ltd(600276) of the innovative drugs darcilil tablets and hengglijing tablets were approved by nmpa. Carrelizumab was approved for two indications: first-line squamous non-small cell lung cancer and first-line esophageal cancer. With the continuous listing of innovative drugs in the pipeline and the continuous expansion of indications, Hengrui innovative drugs are expected to gradually usher in the harvest period. We are optimistic about the development prospect of the company for a long time.
Profit adjustment and investment suggestions
We maintain the company’s profit forecast of 6.4/74/8.1 billion yuan from 2021 to 2023, corresponding to 38 / 32 / 30 PE from 2021 to 2023, maintaining the “buy” rating.
Risk tips
The risk of sales falling short of expectations, the risk of medical insurance negotiation falling short of expectations, the risk of innovative drug research and development, the risk of internationalization falling short of expectations, the risk of market competition, the risk of centralized purchase, the risk of lifting the ban on restricted shares, etc.
