\u3000\u3 China Vanke Co.Ltd(000002) 317 Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) )
Key investment points:
Company profile In 1979, the two companies were founded as the “South China Pharmaceutical Factory”, which was officially listed in the “South China Pharmaceutical Factory”, and the code was “Shilong” for short The company’s products cover the fields of Ophthalmology, cardio cerebrovascular, respiration, digestion, senile degenerative diseases and other major diseases.
The company’s traditional business is the production and sales of Chinese patent medicine. In 2019, the company realized an operating revenue of 2.532 billion yuan, and the sales of Chinese patent medicine accounted for 56.19%. Among them, compound Xueshuantong and Naoshuantong are the two leading products of the company.
The transformation of innovative drugs started early. After listing in 2009, the company began to gradually cooperate with Chinese scientific research institutes, Wuxi Apptec Co.Ltd(603259) and other scientific research enterprises to lay out the field of chemical drugs. It is one of the enterprises that have earlier transformed to innovative drugs in China. At present, the proportion of chemical drugs in the company is stable at 4-50%. The layout of innovative drug pipelines has been steadily promoted.
Turn losses into profits in 2021. The company’s annual performance forecast shows that the company expects to realize the net profit attributable to the shareholders of the listed company in 2021 between 330 million yuan and 390 million yuan. After deduction, the net profit attributable to the shareholders of the listed company is 350 million yuan to 410 million yuan, with a significant year-on-year turnaround, and the expected earnings per share is 0.41 yuan to 0.49 yuan. The reasons for the significant turnaround are: the performance of the previous year was affected by the provision for goodwill impairment, resulting in a loss, which was eliminated in 2021; At the same time, the good epidemic control in 2021 has restored the sales of the company’s leading products.
1273 project progress. Affected by the year-on-year decrease in the number of influenza after the epidemic, the company’s 1273 phase III clinical project is still in the process of entering the group. It is expected that the entry progress of phase III clinical project will be postponed to the end of 2022. Foreign clinical has obtained the FDA drug clinical trial approval notice in March. From the current clinical results in China, 1273 has good advantages in virus inhibition and drug resistance. With the remission of the epidemic, it is expected to carry out clinical trials abroad. The chief project leader of the clinical trial of the project is academician Zhong Nanshan. Once the follow-up clinical conditions are mature, the success rate is expected to be high.
Drug progress in NASH field. The company has laid out six products in the field of Nash, namely zsp1601, zsp0678, zsym008, rcym001 and ray001. Ray002 has laid out product pipelines covering different action targets such as liver fat, inflammation and fibrosis and having the potential of combined medication. Among them, zsp1601 has completed phase Ib / IIa clinical trial, which has achieved positive results and reached the main end point. It supports zsp1601 tablets to continue to carry out phase IIB clinical trial, and its R & D progress is in the first echelon in China.
Nash has huge market space. Nonalcoholic steatohepatitis (NASH) is a serious progressive state of nonalcoholic fatty liver disease, which is mainly characterized by hepatic steatosis, ballooning and inflammation, with or without fibrosis. Nonalcoholic fatty liver disease (NAFLD) is a liver disease caused by excessive deposition of fat in hepatocytes caused by nonalcoholic factors.
The pathology of Nash is complex and it is difficult to develop new drugs. At present, only India approved the PPAR of zydus Cadila in March 2020 α /γ The agonist saroglitazar is used for this indication. Statistics show that there are about 50 million patients with NASH in China. At present, the disease has not been approved for marketing in the world. It is expected that the market scale of international Nash will reach 35-40 billion US dollars in 2025.
Progress in other innovative drugs. Zsp1603, a class of innovative drugs for the treatment of idiopathic pulmonary fibrosis (IPF) and malignant tumors, is currently carrying out phase Ib / IIa clinical research for the treatment of IPF. The first subject has been enrolled and belongs to an innovative drug that is not listed at home and abroad. Tumor R & D pipeline, a class of innovative drug zsp1241 for the treatment of liver cancer, gastric cancer and other malignant tumors, and a class of innovative drug zsp1602 for the treatment of malignant tumors are progressing smoothly. At present, phase I clinical trials are being carried out. At the same time, the company has developed two nano preparations for the treatment of ovarian cancer, lung cancer and other malignant tumor injections of docetaxel polymer micelles and Paclitaxel For Injection polymer micelles for treating breast cancer and lung cancer. Clinical trials have been approved. All of them are conducting phase I clinical trials. Ophthalmic pipeline is a new drug for treating diabetic macular edema (DME). ZSYM011 is an important layout of innovative drugs in ophthalmology. The target is relatively complete, and it can be orally administered to DME, which can show good efficacy in animal models with moderate and severe pre clinical DME.
The company announced the draft of restricted equity incentive plan on February 12. The draft plans to provide equity incentives to 79 middle-level managers, core technology and business backbone of the company with shares repurchased in the early stage. The number of restricted shares to be granted is 5.84 million shares (adjusted to 5.78 million shares in the announcement on March 1), accounting for about 0.72% of the total share capital of the company at the time of the announcement of the draft incentive plan (adjusted to 0.71%). The implementation of equity incentive is conducive to the unity of the company’s management and core employees and promote the growth of the company’s performance.
According to the earnings forecast, the company’s earnings per share in 2021 is expected to be 0.42 yuan, 0.47 yuan in 2022 and 0.53 yuan in 2023, corresponding to the closing of 16.34 yuan on March 21. The P / E ratios in 2021, 2022 and 2023 are 38.90 times, 34.77 times and 30.83 times respectively. Considering the company’s first mover advantage in the field of respiratory innovative drugs, the company is given an investment rating of “buy”.
Risk tip: Guangdong alliance lost its bid for centralized procurement, the epidemic development exceeded expectations, and the research and development density of innovative drugs was lower than expected
