\u3000\u3 Guocheng Mining Co.Ltd(000688) 076 Jiangsu Sinopep-Allsino Biopharmaceutical Co.Ltd(688076) )
Key investment points
Jiangsu Sinopep-Allsino Biopharmaceutical Co.Ltd(688076) : API gene, C (d) Mo sailing
Looking back on the company’s history, from 2009 to 2016, the company mainly developed polypeptide APIs, supplemented by small molecule APIs. From 2017, the company acquired aosano and xinbosi to expand C (d) Mo and generic pharmaceutical business. In 2020, the company’s C (d) Mo revenue accounted for 73% and API and preparation revenue accounted for 27%, which continued to increase. In addition, we noticed that the company’s single quarter performance growth was significantly disturbed by the delivery of large projects. From the perspective of the development stage and competitiveness of the company’s businesses, we expect the revenue CAGR to be 20-25% from 2021 to 2023. Based on the company’s technology in peptide API & knowhow, the peptide cdmo business is expected to accelerate its expansion.
C (d) Mo: new stage of project expansion and BD construction
① in terms of development stage, the company is in the stage of customer concentration (the revenue of the top five customers accounts for 60% +) and high proportion of large projects (the revenue of the top three innovative drugs cdmo projects accounts for nearly 60% in 2020). The innovative drugs corresponding to the main projects are still in a large-scale period (market expansion, increase of indications, etc.), but the company’s C (d) Mo profits may fluctuate significantly quarterly. We believe that the number of projects and the construction of BD team are important variables to evaluate the growth of the company’s C (d) Mo business. We are concerned that in 2021, the company has strengthened the introduction of BD talents and the expansion of new projects outside China. With the more balanced project echelon, it is expected to significantly reduce the volatility of quarterly performance.
② production capacity launch: Jiande plant has about 1.5 million liters of planned production capacity and 490 million fixed assets. New production capacity will be built in 2021q3 and 2022h1 respectively, which will support medium and long-term growth after being launched successively.
③ potential expansion: layout cdmo business based on API technical advantages. We believe that the sales of cdmo polypeptide and peptide synthesis equipment is about US $20 billion, which is mainly due to the relatively high global market of cdmo-50 billion. We believe that the company has knowhow advantages in the fields of solid-liquid fusion peptide large-scale production technology platform, protective group strategy and crystallization purification process, which is helpful to expand peptide cdmo business.
API and preparations: optimistic about new increment of centralized purchase
① products: the company’s global registration and activation of liraglutide, lanruipeptide acetate and other varieties has verified the competitiveness of the company’s polypeptide technology platform. In the Chinese api Association review, the company’s five API varieties of bivalirudin, etibatide, atorvastatin calcium and octreotide acetate have been associated with the preparation, and are in the Seventh Batch of national centralized collection report; Etibatide injection, thymus Faxin injection and agliptin benzoate have been approved to be listed in China. Oseltamivir phosphate API and capsule, bivalirudin injection, olmesartan axetil amlodipine tablets and other varieties are in the application process. We are optimistic about the incremental contribution of China’s centralized collection to the company’s API business.
② preparation: centralized collection accelerates forward integration, and polypeptide preparation has advantages. (1) Centralized procurement of preparations: in June 2021, the company successfully won the bid in the fifth batch of procurement with quantity, with the bid winning amount of about 12.19 million yuan. (2) Preparations to be purchased intensively: etibatide injection, which has passed the consistency evaluation, has been included in the report volume of the seventh batch of centralized purchase. We are optimistic about the performance of the company in the seventh batch of centralized purchase.
Profit forecast and valuation
We expect that the company’s EPS from 2021 to 2023 will be 0.6, 0.65 and 0.81 yuan / share respectively, and the closing price on March 18, 2022 corresponds to 51 times of the company’s PE in 2022. We believe that major customers / projects are the basic market for the growth of the company’s C (d) Mo business. With the release of the company’s new production capacity and richer project reserves, we expect the revenue volatility of C (d) Mo to decrease; Based on the company’s accumulation of technology + knowhow in the field of polypeptide, the business expansion of polypeptide cdmo is expected to contribute to the increment, and the API & preparation business of the company under centralized procurement is expected to maintain steady growth. It is covered for the first time and is rated as “overweight”.
Catalyst
The cooperation project has made significant clinical progress and new customer expansion
Risk tips
Order delivery volatility risk, cdmo customer and order loss risk, product volume less than expected risk, product R & D failure risk, etc
