\u3000\u30 Zhongyan Technology Co.Ltd(003001) 42 Walvax Biotechnology Co.Ltd(300142) )
Event:
The company released its 2021 annual report, realizing an operating revenue of 3.463 billion yuan, a year-on-year increase of + 17.82%; The net profit attributable to the parent company was 428 million yuan, a year-on-year increase of – 57.36%; Deduct the net profit not attributable to the parent company of 591 million yuan, a year-on-year increase of – 17.33%; Operating net cash flow was 705 million yuan, a year-on-year increase of + 517.62%; EPS0. 27 yuan. The performance is in line with market expectations.
Comments:
The changes in R & D investment and fair value affect the current profits, and the cash flow situation has improved significantly: from 2021q1 to Q4, the company’s operating revenue in a single quarter was RMB 434 / 916 / 779 / 1334 million respectively, with a year-on-year increase of + 286.45% / + 98.63% / – 21.53% / – 2.82%; The net profit attributable to the parent company was 32 / 287 / 0.45 / 0.63 billion yuan, a year-on-year increase of + 277.50% / + 260.56% / – 87.92% / – 88.84%; Deduct the net profit not attributable to the parent company of RMB 75 / 165 / 145 / 206 million, a year-on-year increase of + 476.98% / + 113.34% / – 61.34% / – 27.05%. The main driving force of the company’s revenue growth was the sales revenue of 13 valent pneumonia conjugate vaccine, which was 2.746 billion yuan, a year-on-year increase of + 65.59%, and the batch issuance of 4.9508 million doses, a year-on-year increase of + 10.88%; Most other vaccine varieties showed negative growth. It is estimated that the covid-19 epidemic and the mass vaccination of covid-19 vaccine affected the vaccination rate of conventional vaccines. The negative growth in profits was mainly due to the company’s increased investment in R & D, with a total R & D investment of 754 million yuan, a year-on-year increase of + 138.68%, of which 621 million yuan was expensed, a year-on-year increase of + 252.13%; Moreover, the profit and loss from changes in fair value was -281 million yuan, of which the greater impact was the decline in the stock price of Jiahe biology, resulting in a gain from changes in fair value of -422 million yuan. The company’s net operating cash flow improved significantly, mainly due to the significant increase in operating activities such as sales receipts of vaccine products and project grants.
Orderly promotion of R & D projects and innovation driven future growth: in 2021, the company fully promoted various products in the stage of clinical research and industrialization, and made positive progress. Some key projects include:
Bivalent HPV vaccine: the verification of clinical trial site and production site has been completed and included in the list of priority review varieties in July 2021, and the relevant review and approval is in progress;
9-valent HPV vaccine: various preliminary preparations for phase III clinical research are being carried out;
Covid-19 mRNA vaccine: in phase III clinical research stage;
Covid-19 adenovirus vector vaccine: in phase II clinical research stage;
Recombinant New Coronavirus vaccine (CHO cells) is in phase II clinical research.
The company has laid out a number of cutting-edge technologies in the past year. In April 2021, the company signed an agreement with Cheng Du Sheng Nuo Biotec Co.Ltd(688117) to cooperate in the development of siRNA drugs for general influenza viruses; In August 2021, it signed an agreement with blue magpie biology to cooperate in the development of influenza virus mRNA vaccine and respiratory syncytial virus mRNA vaccine. The layout of the world’s cutting-edge siRNA and mRNA vaccine technologies will further enrich the company’s R & D technology route and lay a solid foundation for long-term development.
The industrialization construction has been carried out steadily to provide solid support for commercialization: the company’s HPV vaccine industrialization project is designed and constructed according to whopq pre certification standard and other prevailing international standards. At present, the industrialized production workshop has been completed; The vaccine international preparation center has completed the system verification in December 2020 and will undertake the production task of exporting products such as meningitis series vaccine and pneumonia series vaccine to the international market in the future; The construction project of “Beijing Watson innovative vaccine Industrial Park” in Daxing District, Beijing has completed the main structure construction of plant 1 and plant 2, and the clean plant decoration is under way; The construction of Walvax Biotechnology Co.Ltd(300142) science and technology innovation center project in Kunming high tech Zone is nearing completion; A new mRNA vaccine modular plant has been built in Yuxi vaccine Industrial Park, which has been delivered to Yuxi Watson in September 2021, and equipment commissioning and verification are being carried out continuously.
Profit forecast, valuation and rating: considering that the company’s R & D investment continues to increase and there is some uncertainty in the change of fair value, the forecast of net profit attributable to the parent company from 2022 to 2023 is lowered to RMB 1.199/1.874 billion (the original forecast is RMB 1.442/2.105 billion, down 17% / 11% respectively). The new forecast of net profit attributable to the parent company in 2024 is RMB 2.363 billion, with a year-on-year increase of 180.23% / 56.34% / 26.07%. EPS calculated according to the latest share capital is RMB 0.75/1.17/1.48 respectively, The current price corresponding to PE is 80 / 51 / 41 times respectively. The mRNA and other new technology platforms laid out by the company have great potential, and are expected to explore the international market and maintain the “buy” rating in the future.
Risk warning: the approval progress or sales of new varieties are lower than expected; Risks of industrial regulatory policy adjustment.
