\u3000\u3 Shengda Resources Co.Ltd(000603) 707 Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) )
Events
On April 19, 2022, Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) announced that the company had received the notice from the State Food and Drug Administration on Approving the issuance of drug registration certificates for etibatide injection (specification: 10M; 20mg) and tegacyclin for injection (specification: 50mg).
Comments
In China and the United States, four drugs were approved in two months, and non heparin injections entered the rapid growth channel. (1) On February 8 and April 13, 2022, the company was approved by the FDA for furosemide and reganosen injection respectively. This time, it was approved by the China food and Drug Administration for etibatide and tegacyclin injection. The pipeline of non heparin injection continued to break through. So far, Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) has 40 FDA approval documents for injection anda and 35 non heparin; There are 6 varieties of non heparin injections approved in China. In addition to the 2 approved this time, there are 4 milrinone, atracurium besylate, fondaparinux sodium and cetrik acetate. The company has applied for 10 products every year in the past two years. At present, it is located in the first place in the number of Anda approved by FDA, a local injection enterprise in China. (2) Meitheal, the US subsidiary of the company, has also achieved results in the sales of preparations in the US market. Benzenesulfonate cisatracurium injection currently accounts for nearly 30% of the US market share.
The high-speed injection has become the driving force of the injection business. (1) In the first three quarters of 2021, the company’s revenue and net profit increased by 28.8% and 37.8% respectively. We speculate that it is mainly driven by the high growth of the company’s injection export. With the gradual opening of the U.S. market and other national and regional markets, the proportion of injection export business in the company’s revenue will rise rapidly by more than half from about 40% at present, and become the driving force of the company’s performance growth in the future. (2) The number of companies approved by anda in the United States increased steadily, and the Chinese injection Market opened rapidly at the same time, with a year-on-year increase of more than 30%. We believe that as the preparation business gradually replaces the API business, the overall gross profit margin of the company will maintain a steady upward trend.
The global layout of “research production marketing” rapid response closed loop ensures the promotion of the company’s international market. (1) The company has a R & D team of more than 300 people, and its products cover the fields of anti infection, anti-tumor, urinary system and other indications. (2) The company is the first batch of sterile preparation R & D institutions certified by FDA in China. (3) The company promotes sales through meitheal in the U.S. market, and builds a 365 sales platform in the Chinese market to improve the academic promotion ability of clinical medicine representatives with the help of Internet thinking.
Investment advice and valuation
We believe that the company’s position as a leading Chinese enterprise in the injection Market in China, the United States and Europe with R & D strength has been established. We maintain the profit forecast. It is expected that the company’s revenue will be 3.85/49.3/6.38 billion yuan and the net profit will be 1.091/14.39/1.971 billion yuan on 2021 / 22 / 23. Maintain the company’s “buy” rating.
Risk tips
The risk of high value inventory and long inventory turnover time.
The risk that the export expansion of preparations does not meet the expectations. Risk of raw material price rise.
