Pulike Biological Engineering Inc(603566) (603566)
Core view
Industry: the short-term downturn in pig prices affects immunization enthusiasm, and there is still room for growth in the long term.
Short term: the breeding loss in 2021 will affect the downstream immune enthusiasm. Vaccine immunization sentiment was strongly disturbed by the pig price. In the first half of the year, the production capacity of pigs continued to recover, and the immunization enthusiasm of the lower and lower reaches of breeding profits was OK. However, the continuous decline of pig price in the second half of the year seriously impacted the immunization sentiment of breeding subjects, especially after a significant loss in the third quarter, retail investors stopped the use of most vaccines to save costs. According to the data of the national veterinary drug basic database, the batch issuance data of major swine vaccines decreased significantly month on month in October and November.
Long term: the promotion of large-scale pig breeding in China and the promotion of high-quality market seedlings are the core driving force for pig seedling expansion; The successful commercialization of African classical swine fever vaccine will drive the expansion of this sector; In the long run, China's pet medical market has a broad space, and pet drug seedlings are expected to be replaced by domestic ones.
The company is a leader in China's veterinary medicine industry.
The company focuses on the R & D, production and sales of veterinary drugs. Its main products include veterinary biological products and veterinary chemicals. Seizing market opportunities, relying on strong technical R & D strength and industrialization ability of basic achievements, the company has achieved stable growth in assets, income and profitability, and has become one of the leading enterprises in China's veterinary medicine industry.
Core focus of the company:
(1) Over the years, the company has been deeply engaged in R & D and adhered to innovation driven growth. The company adheres to the innovation path of focusing on independent R & D and supplemented by cooperative R & D. in recent three years, the average annual R & D investment accounted for more than 10% of revenue. At present, it has been engaged in vaccine virus (bacteria) strain breeding and purification technology, cell cloning technology, new vaccine adjuvants, multi linked multivalent vaccine technology, genetic engineering vaccine technology Chemical synthetic (semi synthetic) drugs, new drug forms and other technical fields have formed international and Chinese industry-leading or advanced technical advantages.
(2) The product matrix layout is gradually improved, and the large quantity of single products drives the improvement of performance. The company has a wide range of market-oriented vaccine categories. Porcine circovirus type 2 inactivated vaccine and porcine pseudorabies gE gene deletion inactivated vaccine (epidemic strain) are the first in China. Through equity participation and acquisition, the company has entered the two compulsory immunization single product markets of foot-and-mouth disease and avian influenza. In 2021, the company's pig vaccine sales increased significantly to support the performance. In the first three quarters, the company achieved a revenue of 821 million yuan, a year-on-year increase of 26.8%, and a net profit attributable to the parent of 231 million yuan, a year-on-year increase of 43.7%, including a pig seedling revenue of 290 million yuan, a year-on-year increase of 71%.
(3) There are abundant reserves of products under research, which is expected to continue to contribute to the performance increment. Many products of the company, such as pseudorabies (epidemic strain) live vaccine, ring Mycoplasma subunit vaccine, avian new branch flow method gland five vaccine, have entered the application stage of new veterinary drugs, and are expected to continue to increase their performance in the next 2-3 years. The clinical trial of canine distemper and canine parvovirus live vaccine (DP) has been basically completed, and it is preparing to apply for the registration of new veterinary drugs. It is expected to accelerate the domestic substitution of pet drug vaccines in the future.
(4) The company's African CSFV subunit vaccine R & D project is expected to become the strongest catalyst. The company gives full play to the advantages of subunit platform and cooperates with Lanzhou Institute to actively promote the R & D project of non plague compound subunit vaccine. If the subsequent subunit vaccine is successfully commercialized, the company is expected to take the lead in benefiting.
Investment advice
We believe that the company has the technical advantages of independent innovation and joint research and development, rich product reserves, and has a variety of industry-leading advantageous products in the field of genetic engineering vaccine and joint vaccine. At the same time, in line with the corporate purpose of "gold medal quality and benefiting mankind", the company actively promotes the healthy breeding of animal husbandry and the safety of animal derived food, and has built a brand advantage, Form a high popularity. In addition, the company has steadily promoted the research and development process of non plague vaccine, and the front-end layout of pet vaccine market. In the future, with the continuous introduction of new products, it is expected to continue to contribute to the performance increment. We expect the company to realize net profit attributable to parent company of RMB 276 million, RMB 310 million and RMB 384 million respectively in 2021, 2022 and 2023, with a year-on-year increase of 21.37%, 12.26% and 23.82%, corresponding to EPS of RMB 0.86, 0.97 and 1.20 respectively. Considering the historical valuation of the company and its long-term growth, 35 times PE will be given in 2022, corresponding to the target price of 33.80 yuan, and the "buy" rating will be given for the first time.
Risk statement
(1) The R & D process of the enterprise is less than expected;
(2) Large scale outbreak of animal diseases;
(3) Changes in immunization policy.
