\u3000\u3 Shengda Resources Co.Ltd(000603) 392 Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) )
Key investment points
Event: on April 15, 2022, the company released its first quarterly report. During the reporting period, the company realized 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 non net profit deducted was 1.315 billion yuan, a year-on-year increase of 367.75%.
The performance was much better than expected, the production and marketing of bivalent HPV continued to flourish, and the IVD sector performed well under the catalysis of covid-19 epidemic. 1) Vaccine: according to the data disclosed by the Chinese people’s Procuratorate, the company had issued 67 batches of 2-price HPV by the end of March. Considering that there were some inventory rollovers at the end of last year, we expect that the revenue of HPV vaccine in the first quarter is about 7 million. With the company’s vaccine production capacity climbing, the profit margin is expected to increase. We estimate that the profit contributed by HPV vaccine in the first quarter is about 860 million. 2) In vitro diagnosis: since the second half of 2021, the global epidemic has been repeated, the testing demand has increased significantly, and the company’s covid-19 raw material sales and overseas testing reagent export revenue have significantly increased the performance of IVD sector. On March 14, covid-19 antigen reagent of the company was approved in China, and it is expected to contribute in the future.
With the release of vaccine production capacity, the profitability of the company has increased significantly, and the cost side has remained stable. The company’s Q1 gross profit margin was 89.80%, with a year-on-year increase of 5.32pp and a month on month increase of 4.47pp. We expect that it is due to the increase in the proportion of vaccine business income with higher gross profit margin. From the cost side, the sales cost of Q1 was 976 million (year-on-year + 310.14%), and the cost rate was 30.77%, which was 1.90pp higher than that of Q1 in 2021. We expect it to be caused by increasing the investment in the market promotion of bivalent HPV vaccine. The R & D cost was 106 million (year-on-year + 35.79%), and the expense rate was 3.35%. With the release of vaccine production capacity, the scale effect is gradually reflected. The overall net profit margin of the company is 41.97%, up 6.87pp year-on-year and 3.29pp month on month, with a significant increase in profitability.
It is optimistic that the volume of bivalent HPV vaccine will be further accelerated in 2022. At present, the total production capacity of the company’s bivalent HPV vaccine has reached 30 million pieces / year (20 million vials + 10 million pre encapsulated vials). Since it was approved, the bivalent HPV vaccine has maintained a rapid and large-scale trend. Since 2020, Xiamen, Inner Mongolia Eerduosi Resources Co.Ltd(600295) , Jinan and other places have issued policies to promote the free vaccination of HPV vaccine for school-age women, which is conducive to further improve the awareness and vaccination rate of HPV vaccine. We expect that the domestic HPV vaccine is expected to accelerate in the next few years. In October 21, the company’s 2-valent HPV vaccine passed the PQ certification of who, which also helped to further open the international market.
Profit forecast and investment suggestions: considering that the company’s 2-price HPV volume rhythm is higher than expected, and the IVD sector is expected to benefit from the increased detection demand caused by the repeated covid-19 epidemic, we slightly adjust the profit forecast. It is estimated that the company’s operating revenue from 2022 to 2024 will be 11.122 billion yuan, 13.853 billion yuan and 16.652 billion yuan respectively, with a year-on-year increase of 93%, 25% and 20%; The net profit attributable to the parent company was 3.908 billion yuan, 5.436 billion yuan and 6.564 billion yuan respectively (3.430 billion yuan, 4.912 billion yuan and 5.898 billion yuan respectively before adjustment), with a year-on-year increase of 93%, 39% and 21%. As one of the leading companies with beautiful product pipeline under research and overseas technology output, it will benefit from the continuous increase of 2-valent HPV vaccine in the next three years. The 9-valent HPV vaccine under research has entered clinical phase III and maintained the “buy” rating.
Risk warning events: the risk of intensified competition and price reduction of HPV vaccine, the risk that the R & D progress is less than expected, the risk that the prediction premise is less than expected, resulting in deviation in the calculation of market capacity, the case risk of adverse reaction events of vaccine, and the risk of policy and supervision.
