\u3000\u3 Shengda Resources Co.Ltd(000603) 392 Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) )
Event overview:
The company released the first quarterly report of 2022. In Q1 2022, the company achieved an operating revenue of 3.171 billion yuan, a year-on-year increase of 284.85%; The net profit attributable to the parent company was 1.331 billion yuan, a year-on-year increase of 360.18%; The net profit deducted from non parent company was 1.315 billion yuan, with a year-on-year increase of 367.75%.
Analysis and judgment:
The company’s performance grew rapidly, driven by the high-speed and large-scale volume of HPV vaccine, and the performance of the first quarter report significantly exceeded expectations
In 2022, the company’s first quarter report continued to grow rapidly, and both HPV vaccine business and IVD business achieved rapid growth. China’s HPV vaccine business presents a high outlook, and the company’s bivalent HPV vaccine production and marketing are booming. By the end of December 2021, the penetration rate of HPV vaccine in China was only 7%, far from reaching the peak. In November 2020, who officially launched the “global strategy for accelerating the elimination of cervical cancer”. In response to the call of who, China’s National Health Commission has launched pilot projects in many provinces and cities to promote free vaccination of cervical cancer vaccine in some age groups. Some local governments paid for the domestic HPV vaccine, further promoted the publicity and popularization of HPV vaccination, and improved the public’s awareness of the harm of cervical cancer and HPV vaccination. According to the latest batch issuance data of 2022 released by the Central People’s Procuratorate, the company issued 67 batches of bivalent HPV vaccine in Q1 of 2022. We speculate that the batch issuance volume is about 6.5-7 million. We expect and calculate that in the first quarter, the company sold about 7 million divalent HPV vaccines and contributed about 1 billion yuan of profit. The performance of the first quarter report driven by high-speed and large-scale HPV vaccines significantly exceeded expectations. Considering the current situation that the supply of HPV vaccine in China is in short supply, the company’s bivalent HPV vaccine is currently in a state of booming production and marketing. The significant increase in the number of batches issued will help the company’s bivalent HPV vaccine business to increase rapidly.
Strong R & D strength and rich product pipeline open up a broad space in the future
Backed by Xiamen University, the company has an advanced vaccine R & D platform and has a large investment in R & D expenses every year. In 2021, the R & D expenses were 682 million yuan, a year-on-year increase of 117%, accounting for about 12% of revenue. At present, the company is mainly developing five products, including nine valent HPV vaccine (clinical phase III, expected to be approved in 20242025) and freeze-dried live attenuated varicella vaccine (clinical phase III, expected to be approved in 2023). Freeze dried live attenuated varicella vaccine vzv-7d (clinical phase II, expected to be approved from 2024 to 2025), nasal spray influenza virus vector covid-19 vaccine (clinical phase III), 20 valent pneumonia conjugate vaccine (approved clinical). Among them, the nine valent HPV vaccine is a heavy product under development. We expect to become the first approved nine valent HPV vaccine in China, form a product echelon with the company’s two valent HPV vaccine, and further enhance the company’s vaccine business competitiveness.
Investment suggestions:
Considering that China’s HPV vaccine is still in an unbalanced state of supply and demand, and the company’s bivalent HPV vaccine will grow rapidly and in large quantities, we raised the company’s profit forecast from 2022 to 2024, and the company’s operating revenue from 2022 to 2024 increased from 9.684/13.35/15.771 billion yuan to 10.779149.00/18.258 billion yuan; The net profit attributable to the parent company increased from RMB 3.725/55.27/7.128 billion to RMB 4.060/60.11/7.680 billion; EPS was raised from 6.14/9.10/11.74 yuan to 6.69/9.90/12.65 yuan, corresponding to the share price of 269.10 yuan / share on April 15, 2022, and PE was 40 / 27 / 21 times, maintaining the “buy” rating.
Risk tips:
The company’s bivalent HPV vaccine sales are less than the expected risk; With the market competition of other domestic HPV vaccines in China, the risk of product price reduction is intensified; The sales of the company’s in vitro diagnosis business is less than the expected risk; The R & D Progress of the company’s nine price HPV vaccine and other products under development is less than the expected risk.
