\u3000\u3 Guocheng Mining Co.Ltd(000688) 363 Bloomage Biotechnology Corporation Limited(688363) )
Event:
On April 15, the company officially signed the “property right transaction contract” with China coal geological group to acquire 51% equity of “Yierkang biology” for 233 million yuan, officially entering the collagen industry. The two sides will actively carry out business integration and coordination from the aspects of R & D, products and sales. On the one hand, they will enable the artificial bone business to accelerate the expansion of hospital channels, on the other hand, they will further enrich the bioactive product pipeline. In the future, they are expected to form coordination with the company’s existing technology, and gradually promote the development of multiple businesses based on their own strong R & D and industrial transformation capabilities.
Comments:
Yierkang biological has been deeply engaged in collagen medical terminal products for many years. As a leading company of geological group entering the medical industry, it has realized the whole chain layout from R & D, production to sales. 1) it has mastered a full set of mature animal collagen extraction technology, 2) collagen sponge has a market share of more than 30%, ranks first in the industry and has a high reputation, 3) it has an important product artificial bone, which is the first nano pharmaceutical product in China, It is also the only bionic bone material in China. As of November 30, 2021, the total assets of the company were RMB 113 million. In 2019 / 2020 / January to November 2021, the company realized revenue of RMB 87 / 0.79/0.76 million and net profit of RMB 25 / 0.11/0.13 million respectively. The valuation of this acquisition is about 32 times. Considering the strong synergy between Yierkang and the company, the valuation is within a reasonable range.
Bloomage Biotechnology Corporation Limited(688363) 2021: Based on advanced structural biology, synthetic biology and other technologies, a collagen active fragment screening platform was established, the fermentation yield was at the leading level in the industry, and a scientific, effective and reliable scientific evaluation and verification platform for the performance of recombinant collagen was established. The technology was used for the comprehensive evaluation of protein safety and efficacy.
The acquisition of Yierkang biology is expected to form strong synergy between the two sides: 1) it is expected to take advantage of Yierkang’s high share in the collagen sponge Market and further enrich the company’s existing medical terminal product pipeline through collagen sponge, artificial bone and other hospital admission products; 2) Both Huaxi and Yierkang have laid hospital channels, and we expect to carry out collaborative empowerment in the future; 3) Huaxi will have self-research and sales of animal derived and recombinant collagen at the same time, superimposed with profound ha technology. We expect the three to create together; The application fields of collagen involve medical and health care, skin care products, food, etc. in the future, the company is expected to strengthen the C-end industrial application of collagen and create a new growth curve based on its own pilot transformation platform.
Investment advice and profit forecast: the company adheres to the long-term principle, tamps the barriers to competition and moat with its R & D strength, is committed to biotechnology & bioactive materials, based on the leader of hyaluronic acid raw materials, continues to extend functional sugars, amino acids and other bioactive substances, and establishes from raw materials to medical end products, functional skin care products For the whole industry chain business system of functional food, the “four-wheel drive” mode opens a new strategic growth space, and the net profit is expected to be RMB 1.05/13.8/1.75 billion in 22-24 years, maintaining the “buy” rating.
Risk warning: new technology substitution risk; Product registration risk; Industry competition intensifies risks
