Bloomage Biotechnology Corporation Limited(688363) (688363)
Event overview: according to the official account of Bloomage Biotechnology Corporation Limited(688363) , the company’s silk brand held a keynote conference in its own trade pilot area in Hainan in December 26th. It announced that Hainan provincial drug administration has approved the reply of China’s SiC 516 and 532 as the urgent medical devices urgently needed. This action is expected to speed up the time for the entry of medical products such as Sili kinetic energy into the Chinese market. In addition, on December 30, the State Food and Drug Administration announced that the cosmetics raw material safety information registration platform was officially launched, and the raw material submission code will be automatically generated after the submission of raw material safety related information. Each raw material produced by each enterprise corresponds to a submission code. The scope of supervision under the new regulations has been expanded from the previous raw material filing to the actual procurement and use level, The barriers of formal raw material manufacturers have been consolidated.
Event comments: under the policy dividend, the ace product Sili kinetic energy has accelerated the registration process in China through Hainan, and the company is expected to benefit from the broad compliance Shuiguang needle market dividend in the future. 1) Favorable policies: when applying for registration with the State Food and drug administration, overseas medical device manufacturers need to pass multi link certification such as product inspection, clinical verification and quality system assessment, and face great tests in terms of effectiveness and time cost of entering the Chinese market, The “trial first” policy of Hainan Boao music city will speed up the approval of medical device and Drug Import Registration in the pilot area. Innovative products that have obtained medical device registration certificates abroad can be used as special needs of clinical urgently needed imported medical devices. Under the policy bonus, two products 516 and 532 of sili can be used first in the pilot area of Hainan music city, It is expected to further accelerate the “localization” process of sericin by introducing it into the dermis through aseptic skin breaking operation to correct the problem of skin aging; 2) Strong product: Sili kinetic energy element water light needle is mainly used to replenish water and resist oxidation. Its exclusive ct50 patented technology adds 50 kinds of cellular active ingredients such as amino acids, minerals, vitamins, nucleic acids, antioxidants and coenzymes to the product to achieve the effects of replenishing water, narrowing pores and anti-oxidation. SRN grid slow-release technology uses the role of catalyst, The carboxyl group of hyaluronic acid and the diamino group of basic amino acid are linked in the form of “water bridge” to form a three-level network structure of hyaluronic acid and form a soluble skeleton in the solution. The active components in the skeleton are gradually released into the skin with hyaluronic acid metabolism, which has the effect of slow-release dissolution, so that the effect of active components can be maintained for a longer time and the product competitiveness is strong, Good response in the terminal market; 3) Standardization of Shuiguang needle Market: in November, the State Food and Drug Administration issued a notice on soliciting the classification catalogue of medical devices (adjustment opinions), emphasizing that sodium hyaluronate solution for injection (i.e. Shuiguang needle) is supervised according to class III devices. At present, common Shuiguang needle products in the market include makeup brand products prohibited for injection, class I or class II devices and other illegal skin breaking injection products, In addition, there are few compound products approved for compliance in China. With the tightening of the policy, we expect Sili to continue to benefit from the compliance process of the Shuiguang product market after the acceleration of the localization process.
Future development: healthy and beautiful, with clear plate planning. In the short term, under the superposition of innovative business incubation, strategic adjustment of medical and American business, early stage of capacity expansion, impact of equity incentive and other factors, the profit growth rate of the company is lower than that of revenue. The company relies on deep scientific research at the bottom, mature pilot manufacturing and industrial transformation technology, and continuously enhanced market transformation capacity. At this stage, the four major businesses are making concerted efforts. With the steady growth of raw material business, the company’s raw material production barriers are becoming stronger and stronger, and has begun to take shape as an enterprise prototype of bioactive platform. In the future, we will continue to focus on polysaccharides and amino acids that contribute to human health. We are optimistic about hyaluronic acid γ- The future development of raw materials and end products such as aminobutyric acid and etodyne. The medical beauty business accelerates the adjustment process and is expected to usher in a large profit release space after the adjustment period; The top four brands of functional skin care products developed gradually, and maintained a high growth trend. Among them, the core brand of Bai Yan has gradually reduced its dependence on head anchors, and the rate of operating expenses in the private area of Qudi has been decreasing. Mivel has relied on the two advantages of facial mask and toner, and the muscle activity relies on the brown rice essence water, a large single product, with a stable flow base. We believe that the proportion of the company’s C-end business continues to increase. Although there may still be large sales expenses in the short term, the company’s profits in the medium and long term are expected to be released to a large extent when the medical beauty line is straightened out and the profit models of various brands of functional skin care products run through.
Profit forecast and investment suggestion: as a global leader in hyaluronic acid raw materials, the company has prominent cost advantages. Its business expansion to medical terminals, functional skin care products and functional food is natural. The company occupies a high-quality track and has a deep moat, which is worthy of long-term attention. We estimate that the operating revenue of the company from 2021 to 2023 will be RMB 4.347/61.93/83.14 billion respectively (with growth rate of 65% / 42% / 34%, respectively), the net profit attributable to the parent company will be RMB 831 / 12.11/1.838 billion respectively (with growth rate of 29% / 46% / 52%, respectively), and the EPS will be RMB 1.73/2.52/3.83 respectively. The current market value corresponding to PE is 90 / 62 / 41 times respectively. We believe that the reasonable market value range of the company’s performance in 2022 is RMB 110.5-138 billion, The corresponding reasonable price range is 230.21-287.62 yuan, maintaining the company’s “recommended” rating.
Risk tip: capacity expansion of competitors; The progress of new expansion areas is less than expected; The market acceptance of new products is lower than expected; Risk of cosmetic medical malpractice.
