\u3000\u3 China Vanke Co.Ltd(000002) 007 Hualan Biological Engineering Inc(002007) )
Event: on the evening of March 29, 2022, the company released its annual report for 2021. During the reporting period, the company achieved an operating revenue of 4.436 billion yuan, a year-on-year decrease of 11.69%; The net profit attributable to the parent company was 1.299 billion yuan, a year-on-year decrease of 19.48%; The non net profit deducted was 1.201 billion yuan, a year-on-year decrease of 18.71%.
Vaccine business: covid-19 vaccination affects sales, and the approval of children’s dosage form is expected to help accelerate the volume in 22 years. In 2021, the revenue of vaccine sector reached 1.825 billion yuan, a year-on-year decrease of 24.63%; The sales volume of influenza vaccine was about 15.54 million, a year-on-year decrease of 28.51%; Mainly affected by the run on covid-19 vaccination, the company’s influenza vaccine is expected to achieve restorative growth in 2022 with the orderly promotion of covid-19 vaccination in China. In addition, the company’s tetravalent influenza virus split vaccine (children’s dosage form) obtained the drug marketing approval in February 2022. The vaccination scope of tetravalent influenza vaccine has been expanded to people under the age of 3, which is expected to gradually replace trivalent influenza vaccine. In the long run, due to the high incidence of influenza and covid-19 epidemic education lasting for 2-3 years, the awareness of influenza vaccine continues to improve. We expect the penetration rate of influenza vaccine to continue to increase in the future. As the leader of tetravalent influenza vaccine, the company is expected to maintain rapid growth.
Blood products business: the performance is stable and the inventory has warmed up. At present, the company has 25 single plasma collection stations, with a plasma collection volume of more than 1000 tons in 2021. In 2021, the revenue of blood products business was 2.598 billion yuan (year-on-year + 0.25%), and the gross profit margin was 55.26%, a year-on-year decrease of 1.86pp; The revenue of albumin was 1.011 billion yuan (year-on-year + 5.6%), and the gross profit margin was 53.29% (year-on-year -2pp); Jingbing’s revenue was 709 million (year-on-year – 13.98%), and its gross profit margin was 55.54% (year-on-year – 3.11pp); Other blood products amounted to 878 million (year-on-year + 8.33%), with a gross profit margin of 57.29% (year-on-year -0.44pp). In 2021, the inventory of blood products was about 2.34 million bottles, with a year-on-year increase of 64.06%, and the inventory has warmed up.
Sales expenses decreased with the scale of vaccine revenue. In 2021, the company’s sales expense was 775 million yuan (a year-on-year decrease of 27.93%), and the expense rate was 17.47%, a decrease of 3.94pp compared with the same period in 2020. The management expense was 254 million yuan (year-on-year + 0.24%), the expense rate was 11.43%, and the expense rate increased by 6.40pp. It is expected to be related to the spin off and listing of Hualan vaccine, a subsidiary. In 2021, the company’s R & D expenses were 254 million yuan (year-on-year + 18.96%), the expense rate was 5.72%, and the expense rate increased slightly by 1.48pp.
The proportion of inventories and accounts receivable remained stable, and the cash flow remained good. In 2021, the ending inventory balance of the company was 1.359 billion yuan, accounting for 11.78% of assets, which was basically the same as the same period in 2020. Accounts receivable and bills amounted to 1.83 billion yuan, accounting for 41.25% of revenue, an increase of 6.34pp compared with 2020, and the overall collection was basically normal. In 2021, the net operating cash flow was 1.433 billion yuan, with a year-on-year increase of 8.09%, and the cash flow situation remained good.
Profit forecast and investment suggestions: according to the company’s 2021 annual report, we adjusted the profit forecast, taking into account: 1) benefiting from the 14th five year plan of pulp stations in many provinces, the company’s blood products business maintained steady growth; 2) The vaccine business benefited from the increased penetration of influenza vaccine and the approval of children’s dosage forms. As the leader of influenza vaccine, the company achieved rapid and large-scale production, but at the same time, other manufacturers in China will be approved one after another, and the competition will intensify; It is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 6.481 billion, RMB 7.718 billion and RMB 9.189 billion respectively, with a year-on-year increase of 46.08%, 19.09% and 19.06%, and the net profit attributable to the parent company will be RMB 2.085 billion, RMB 2.536 billion and RMB 3.069 billion respectively (before adjustment from 2022 to 2023), with a year-on-year increase of 60.53%, 21.65% and 20.98%. The company is one of the leaders in blood products. The continuous improvement of awareness of tetravalent influenza vaccine has led to sustained and rapid volume and maintained the “buy” rating.
Risk warning events: the risk of price fluctuation of blood products, the risk that the plasma collection volume is less than expected, the risk of intensified competition of tetravalent influenza vaccine, and the risk that the R & D Progress of monoclonal antibody business is less than expected.
