Chongqing Zhifei Biological Products Co.Ltd(300122) company comment report: the employee stock ownership plan was successfully completed, and common prosperity demonstrated confidence

\u3000\u30 Zhongyan Technology Co.Ltd(003001) 22 Chongqing Zhifei Biological Products Co.Ltd(300122) )

Event: the company issued an announcement on the completion of stock purchase of the employee stock ownership plan for common prosperity (2022).

Comments:

The employee stock ownership plan was successfully completed and committed to common prosperity. According to the announcement of the company, as of the closing of March 18, 2022, the employee stock ownership plan of the company’s common prosperity (2022) has purchased a total of 29.1 million shares of the company’s shares through the secondary market (centralized bidding transaction and block transaction), accounting for about 1.82% of the total share capital of the company. The transaction amount is 2917741000 yuan, and the transaction price range is 100.00 yuan / share to 139.39 yuan / share, There are no more than 2000 core backbone employees, including 14 directors, supervisors and senior managers. The shares purchased under this ESOP will be locked in accordance with relevant regulations, and the lock-in period is from March 18, 2022 to March 17, 2023. The large-scale and wide coverage of ESOP funds helps to fully stimulate the enthusiasm of employees and help the subsequent rapid development of the company.

HPV vaccine market demand is strong and is expected to maintain a rapid growth trend. At present, the demand for HPV vaccine in China is large and the penetration rate is low, so there is still room for growth several times. From 2017 to 2021, the total number of HPV vaccine batches issued in China exceeded 60 million, but only about 20 million people completed the whole process of immunization; The number of female target population aged 9-45 in China is as high as 380 million, and the penetration rate is only about 5%. Among them, the price of four / nine price HPV vaccine is higher, which has certain advantages in the scope of disease prevention and protection efficiency. With the improvement of HPV vaccination rate, the overall market capacity of the industry will continue to expand, which is expected to drive the rapid growth of the company’s performance.

The products under research are progressing smoothly and gradually enter the harvest period. 1) TB EC diagnostic reagent + preventive biological products micro card pipeline is exclusive in China and is expected to enter the mass production stage in 2022; 2) Diploid crazy vaccine, tetravalent influenza vaccine and AC Hib triple vaccine will be applied for production soon; 3) Phase III clinical trials of 15 valent pneumonia conjugate vaccine, bivalent dysentery conjugate vaccine and other products are being carried out; The company’s heavy self-developed products have successively entered the harvest period, which is expected to gradually increase the company’s performance.

Profit forecast: excluding the contribution increment of covid-19 vaccine performance, it is estimated that the operating revenue from 2021 to 2023 will be 209.392590129936 billion yuan respectively, and the net profit attributable to the parent company will be 47.84/64.117638 billion yuan respectively, corresponding to 42 / 35 / 29 times of PE from 2021 to 2023.

Risk factors: the risk that the issuance or sale of product approval is less than expected, the risk that the progress of product R & D is less than expected, and the risk of uncertain covid-19 epidemic situation.

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