\u3000\u30 Zhongyan Technology Co.Ltd(003001) 22 Chongqing Zhifei Biological Products Co.Ltd(300122) )
Key investment points
Chongqing Zhifei Biological Products Co.Ltd(300122) : from the thickening of agency business to the breakthrough of self operated vaccine
Since the signing of the agreement on supply, distribution and joint promotion of tetravalent HPV vaccine between the company and MSD in September 2012, with the listing, promotion and sales of tetravalent and nine valent HPV vaccines, the company’s profit volume and roe level have increased rapidly since 2016. Considering the clinical and registration rhythm of the company’s self operated vaccine, we believe that 20222023 is the key node for the breakthrough of the company’s self operated pipeline: tuberculosis matrix products (micro card and Yika) have successively entered the commercial mass production stage, 23 valent pneumonia polysaccharide vaccine, 15 valent pneumonia conjugate vaccine Large single products such as human diploid rabies vaccine are expected to significantly improve the ceiling of the company’s target market (from about 2.7 billion yuan in 2021 to 45 + billion yuan in 2026), further amplify the advantages of the company’s sales team with wide coverage and sinking channels, and covid-19 vaccine is also expected to become a new starting point for the development of the international market.
Sales ability: a wide coverage, strong grass-roots and standardized sales team has scale effect
We believe that the existing vaccine procurement mechanism (the provincial disease control overall planning catalogue, and the grass-roots CDC determines the specific procurement suppliers) determines that the sales team with standardized management and channel sinking has scarcity and scale effect, and the per capita income generation is the tracking index. According to the company’s 2020 annual report, “the company’s marketing network is widely distributed, covering 31 provinces, autonomous regions and municipalities directly under the central government, more than 300 prefectures and cities, more than 2600 districts and counties, and more than 30000 grass-roots health service points (township vaccination points and community clinics)”. From 2010 to 2020, the company’s sales personnel increased rapidly (from 366 to 1905, with a CAGR of 18% in 10 years) and the per capita income generated by CAGR of 14.7% in 10 years, The coverage and efficiency have increased significantly. We believe that under the background of more listed companies of class II vaccine in China, the standardized management of the sales team has a scale effect.
Product echelon: 2023 or the breakthrough period of centralized listing of self operated vaccines
In terms of the number of pipelines, Chongqing Zhifei Biological Products Co.Ltd(300122) may be the vaccine listed company with the largest number of clinical + listed vaccine pipelines in China; From the perspective of market space, we expect that with the company’s large products such as acyw135 polysaccharide conjugate vaccine, 15 valent pneumococcal conjugate vaccine, 23 valent pneumonia polysaccharide vaccine, human diploid rabies vaccine and tetravalent influenza split vaccine successively listed, the total accessible market of the company’s self operated products is expected to increase significantly to 50 + billion yuan in 2026. Growth drivers by category:
① dominant varieties on the market (meningococcal vaccine, Hib, etc.): we predict that the CAGR of the income side is expected to be 0-5% from 2021 to 2025, with the growth coming from the steady increase of the market share of multiple high price vaccines in the field of meningococcal vaccine.
② new varieties to be launched soon: we expect to focus on contributing revenue from 2024 to 2025. In 2025, the sales of two pneumonia vaccines are expected to reach 2 + billion yuan, and the sales of rabies and influenza vaccines are expected to reach 500 + billion yuan.
③ tuberculosis matrix: Yika and preventive micro card are expected to verify the tuberculosis detection and prevention market space first. We expect that the two products are expected to contribute an annual revenue increment of RMB 900 million from 2022, and the compound growth rate of sales in the next three years is expected to reach 25-30%.
④ covid-19 vaccine: we assume that the income of covid-19 vaccine outside China will decrease year-on-year in 2022, but the global sales life cycle of covid-19 vaccine will be extended from 2023 to 2025 (China booster injection + global primary immunization / sustained demand for booster injection).
⑤ acting vaccine: according to the company’s announcement, in the cooperation agreement between the company and MSD from 2021 to 2023, the basic purchase amount of MSD was 11.61 billion yuan, 12.94 billion yuan and 6.98 billion yuan respectively (Note: it does not represent the order amount, and the specific purchase shall prevail). We believe that the period from 2022 to 2024 is still in the window of rapid improvement of HPV vaccine population vaccination rate (it is estimated that the overall vaccination rate in 2021 will be 6.5-7%). Assuming that the proportion of other agent varieties in moshadong remains stable, we expect that the CAGR of agent vaccine income from 2021 to 2025 will be about 10-15%.
Technical capability: Based on polysaccharides and recombinant proteins, expand the technical platform
In addition to sales capacity and large single products, we believe that the company’s technology accumulation in the research and development of bacterial and recombinant protein vaccines is the cornerstone of medium and long-term competitiveness. ① From the perspective of R & D investment intensity, the proportion of R & D expenditure / self owned vaccine revenue of the company in 2020 is about 40%, which is significantly higher than the average of comparable companies (15-20%); ② From the perspective of pipeline under research, the company has not only the traditional large variety layout (such as influenza vaccine), but also the variety layout similar to norovirus vaccine and recombinant group B meningococcal vaccine, which is relatively difficult and has a better competition pattern; ③ From the perspective of the company’s technical capacity accumulation, the company’s patents focus more on the fields of polysaccharide purification and protein coupling. We believe that the company’s experience in the R & D and purification of bacterial and recombinant protein vaccines is expected to play a role in the R & D pipeline and form a more competitive vaccine product echelon.
Profit forecast and valuation
We expect that the company’s EPS from 2021 to 2023 will be 6.4, 4.4 and 4.8 yuan / share respectively, and the closing price on April 1, 2022 corresponds to 30 times of the company’s PE in 2022. We believe that the company is the private vaccine leader with the largest number of vaccine pipelines under research / listing in China. With the company’s large products such as acyw135 polysaccharide conjugate vaccine, 15 valent pneumococcal conjugate vaccine, 23 valent pneumonia polysaccharide vaccine, human diploid rabies vaccine and tetravalent influenza split vaccine listed successively from 2023 to 2025, the total accessible market of the company’s self-supporting products is expected to increase significantly to 50 + billion yuan in 2026, which will be widely covered in the company Under the commercial operation of the sales team with sinking channels, we believe that the company’s per capita income generation and operating efficiency are expected to be further improved. It will be covered for the first time and will be rated as “overweight”.
Catalyst
The clinical / marketing rhythm of heavy vaccine products exceeds expectations, the international certification / registration rhythm of vaccines exceeds expectations, mRNA and other technical platform cooperation, etc.
Risk tips
The risk that the clinical promotion speed of vaccine is lower than expected, the risk of changes in China’s vaccine procurement policy, the risk of repeated covid-19 epidemic, etc.
