\u3000\u3 Guocheng Mining Co.Ltd(000688) 276 Changchun Bcht Biotechnology Co(688276) )
Event: the company released its 2021 annual report. In 2021, it achieved an operating revenue of 1.2 billion yuan, a year-on-year decrease of 16.6%; The net profit attributable to the parent company was 240 million yuan, a year-on-year decrease of 41.8%; The net profit deducted from non parent company was 230 million yuan, a year-on-year decrease of 41.9%; The net cash flow from operating activities was 140 million yuan, a year-on-year decrease of 32.9%.
Covid-19 vaccination affects the volume of traditional vaccines, and the continuous increase of R & D expenses leads to the decline of profitability. 1) Quarterly, the company’s Q1 / Q2 / Q3 / Q4 single quarter revenue was 2.5/3.4/3.6/260 billion yuan (+ 24.1% / – 16.4% / – 24.9% / – 28.3%), and the net profit attributable to the parent company in the single quarter was 0.6/0.8/1.0/0.10 billion yuan (+ 11.1% / – 36.2% / – 41.7% / – 86.2%). The quarterly decline in the company’s performance growth is mainly due to the centralized vaccination of covid-19 vaccine since February 2021, which affects the traditional vaccination. Especially since the second half of 2021, covid-19 vaccination has been carried out for people aged 3-17, and the applicable population of the company’s nasal spray influenza vaccine is 3-17 years old, which highly coincides with the key population and vaccination time of covid-19 vaccination, resulting in a great impact on the vaccine promotion in the overall influenza season. At present, the basic immunization of covid-19 vaccine in China has basically completed nearly 90%. The vaccination volume of covid-19 vaccine for traditional vaccines will be marginal weakened. Under the low base effect of 21 years, the company’s traditional vaccines are expected to resume growth. 2) In terms of profitability, the company’s gross profit margin in 2021 was 88.3% (-0.02pp), which remained basically stable. The sales expense rate was 37.7% (- 2.4pp), which was mainly due to the decline of the company’s promotion expenses and advertising expenses under the influence of the epidemic. The management fee rate was 9% (+ 0.7pp), which remained stable. The R & D expense rate was 13% (+ 6.6pp), which was mainly due to the increase in the expense of all human anti rabies virus monoclonal antibodies and other products. The financial expense rate was – 0.93% (- 1.2pp), mainly due to the deposit interest of raised funds. Based on the above factors, the company’s net profit margin in 2021 is 20.3% (- 8.8pp), and its profitability has decreased. It is expected that the company’s traditional vaccine will resume growth in 2022, while the amount of impairment of influenza vaccine assets will decrease, and the net profit is expected to resume growth.
The pipeline under research is ready to go, and the herpes zoster vaccine is expected to be on the market in 23 years. At present, the company’s heavy innovative live attenuated herpes zoster vaccine is in the preparation stage of application for production and is expected to be listed in 2023, contributing to the increase of performance. The company’s products have obvious advantages, and the applicable age may be advanced to 40 years old. Moreover, the vaccination procedure is planned to adopt one needle method, and the estimated price positioning is lower than that of GSK vaccine (3200 yuan / person), which is conducive to infiltrating the elderly population with high price sensitivity. Among other pipelines, the rabies vaccine is expected to be put on the market at the end of 22. The whole human anti rabies virus monoclonal antibody and freeze-dried rabies vaccine (MRC-5 cells) are in the stage of preclinical research.
Profit forecast and investment suggestions. It is estimated that the company’s EPS from 2022 to 2024 will be 1.04 yuan, 1.82 yuan and 2.4 yuan respectively, and the corresponding PE will be 43, 24 and 18 times respectively. Considering that covid-19 vaccination in China has been basically completed, the impact on traditional vaccines in 22 years is expected to be marginal weakened. At the same time, the company’s herpes zoster vaccine is expected to become the first approved variety in China, bring large performance increment and maintain the “buy” rating.
Risk tip: the research and development of new products are less than expected, the sales of traditional vaccines are less than expected, and the market competition pattern intensifies.
