\u3000\u3 Shengda Resources Co.Ltd(000603) 392 Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) )
Event: the company released the first quarterly report of 22 years, and the revenue in Q1 was 3.171 billion yuan (+ 284.9%); The net profit attributable to the parent company was 1.331 billion yuan (+ 360.2%); Deduct net profit not attributable to parent company of RMB 1.315 billion (+ 367.8%)
Comments:
The performance exceeded expectations, and the 2-price HPV continued to increase in volume, with high performance growth. In terms of sectors, we expect the vaccine sector and IVD sector to achieve rapid growth. Based on the following judgment: according to the batch issuance data disclosed by the Chinese people’s Procuratorate, through our calculation, the batch issuance volume of HPV from January to March 2 is expected to be about 6.5-7 million. At present, with the low penetration rate of HPV vaccination, the favorable policy of free HPV vaccination for school-age girls in many places in China and the strong market promotion ability of the company, according to the grassroots research, the HPV market demand continues to be strong. It is estimated that the sales volume of Q1 in 2022 is equivalent to that of batch issuance, which is in the process of accelerating the volume, and the sales volume is expected to be more than 6.5 million (1 million in the first quarter of 21 +). The production capacity was successfully expanded and the supply was not in danger (the pre potting in April of 21 + the new Xilin bottle production line was approved in July, and the total production capacity of bivalent HPV vaccine of the company reached 30 million pieces / year). The company’s bivalent HPV continues to maintain prosperous production and marketing and maintain rapid growth. The IVD sector has achieved rapid growth, which is expected to be related to the significant increase in testing demand and the rapid growth of covid-19 raw material sales of the company.
The possibility of single shot HPV in China is very small, the HPV vaccination procedure remains unchanged, and the market capacity remains unchanged.
Who recommends that the impact of HPV vaccine single dose immunization program will be very small. Based on the following judgment:
1) because the Chinese HPV single injection method is less likely to be accepted by the drug administration. From the historical adoption of who’s recommendations on HPV by China’s State Drug Administration, we believe that the possibility of single needle method being accepted is low, mainly because its protective power has not been fully proved. From a historical point of view, after the two HPV vaccines listed by GSK and MSD, who has suggested that the data of persistent infection should be used to replace the precancerous lesion grade II (CIN II) of cervical cancer as the clinical endpoint. The purpose of the proposal is to reduce the time of clinical trial of HPV vaccine. However, in consideration of safety and protection, the China food and drug administration insists on CIN Ⅱ as the clinical endpoint (bivalent HPV), so as to effectively ensure the protective effect of the vaccine. From this point of view, the possibility of single needle method being accepted is low.
2) insufficient driving force of enterprises. If enterprises want to compete in the who market by changing vaccination procedures, they must first obtain approval from the National Drug Administration. According to China’s approval process, the enterprise must first make the clinical protective data of the adult group (with CIN Ⅱ as the clinical end point), and then it is possible to obtain the approval by changing the vaccination method. However, at the same time, due to the submission of new vaccination procedures, there will be more data to be approved during the review, resulting in a longer overall approval time, and the enterprise will pay higher time and cost. From the perspective of input-output ratio, enterprises have insufficient motivation to actively promote the single needle method.
Strong technology platform, scarce VLPs vaccine technology platform, and heavy varieties are only the natural result of heavy technology platform. VLPs platform can bring better vaccines. The company’s unique global E. coli prokaryotic VLPs vaccine technology system combines the characteristics of good immunogenicity and high safety of virus like particle vaccine, breaks through the key technical difficulties of prokaryotic expression protein particle assembly, and achieves the perfect combination of production efficiency and immune effect. Based on this technical system, hepatitis E vaccine, 2-valent HPV, 9-valent HPV, and a new generation of HPV vaccine (in cooperation with GSK) have been listed in phase III clinic. Among the research products, the fastest-growing 9-valent HPV has completed the third clinical field vaccination, launched the head-to-head clinical trial with methadone 9-valent vaccine and the bridging clinical trial at a young age, and completed the enrollment work.
Investment suggestion: the company has built a rare virus like particle vaccine technology platform of E. coli prokaryotic expression system, broke through the key technical difficulties of prokaryotic expression protein particle assembly, and achieved the perfect combination of production efficiency and immune effect. In addition to the listed hepatitis E vaccine and bivalent cervical cancer vaccine, the bivalent cervical cancer vaccine on this platform is undergoing phase III clinical trial, A new generation of cervical cancer vaccine and rotavirus vaccine are being arranged. The production capacity of bivalent HPV has been successfully expanded, driving the rapid growth of performance. We expect that the corresponding net profit attributable to the parent company in 2022 / 2023 will be 4.269 billion yuan and 5.548 billion yuan, with a year-on-year increase of 111.2%, 30.0%, EPS of 7.03/9.14 yuan, and the current price corresponding to the relative PE of 2022 / 2023 will be 38 times / 29 times, maintaining the “buy” rating.
Risk warning: competition intensifies, R & D is less than expected, sales is less than expected, and performance is less than expected.
