Report summary
This week, we tracked and combed the overseas plasma collection, market sales and price of blood products at home and abroad.
1. At present, China only imports albumin and only considers the impact of overseas on China’s albumin supply.
(1) according to PPTA data, in 2020, the overseas plasma collection volume decreased by 20% year-on-year, resulting in a shortage of blood products in 2021, mainly intravenous propylene. Us PPTA data in August 2021: I) from January to August 2021, the year-on-year sales volume of static C was – 5.4% (including – 8.6% in August); II) from January to August 2021, the albumin volume increased by 11.2% (August + 7.2%); Take the price of CSL static propylene as an example. From q120 to q321, the price of static propylene has been rising. The price of albumin is relatively stable.
(2) overseas slurry collection in 2021. The plasma collection volume in 2021 has recovered compared with that in 2020, and the collection volume in the United States is still lower than that before the pandemic. From the opening of the plasma collection center, the data of MS plasma collection center show that the United States and Europe increased by + 12% year-on-year in 2021, including Takeda + 18%, killiford + 11% and CSL + 15%. The epidemic situation is alleviated. The plasma collection volume in the United States gradually recovered in the first half of the year, and the plasma collection volume in the United States continues to rise, The overall collection volume in the United States is still lower than that before covid-19, and the plasma collection volume in Europe is higher than that before the prevalence of covid-19.
(3) China’s 2021 slurry recovery is expected to reach the level of 2019, an increase of about 10% compared with 2020.
(4) issuance of batches disclosed by China. According to the batch issuing batch data and the number of historical single batches disclosed by the Chinese people’s Procuratorate, it is estimated that albumin increased by 5% year-on-year in 21 years, of which imported albumin decreased by 1% year-on-year, and albumin of Chinese enterprises increased by + 15% year-on-year. The sharp decline of overseas slurry collection in the past 20 years did not affect the supply of imported albumin to the same extent. The consumption inventory of Chinese blood products enterprises and the rapid recovery of plasma collection in 2021 have realized the rapid growth of supply.
Conclusion:
(1) it is estimated that the supply of blood products in China in 2022 will be better than that in 2021, based on:
1) the overseas slurry collection in 21 years has recovered better than that in 2020. Although the main slurry collection area in the United States has not recovered to the level in 2019, compared with that in 2020, the slurry collection in Europe has exceeded the level in 2019. 2) China’s slurry production in 21 years has recovered to the level of 2019.
(2) the supply of blood products in China in 2022 is still in a tight balance between supply and demand. be based on:
1) the main slurry mining area in the United States has not yet recovered to the level of 2019, and the spread of Omicron variant in the United States further increases the difficulty of slurry mining recovery. It is difficult to achieve significant growth in imported albumin in 2022. 2) Although there are sporadic outbreaks, the epidemic situation in China is well controlled, and the demand for albumin with rigid demand has maintained a stable growth.
The blood products sector has been pulled back to the value range. It is expected that China’s blood products supply will still be in a tight balance between supply and demand in 2022, and Chinese blood products enterprises with sufficient supply will maintain good growth. It is recommended to Beijing Tiantan Biological Products Corporation Limited(600161) and pay attention to Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) and Boya Bio-Pharmaceutical Group Co.Ltd(300294) .
2. Related targets: Beijing Tiantan Biological Products Corporation Limited(600161) – Q4 has a high-speed growth in a single quarter, which is higher than expected. The growth logic continues to be fulfilled and continues to be recommended.
The company is expected to realize revenue of 4.108 billion yuan (+ 19.24%) and net profit attributable to the parent company of 764 million yuan (+ 19.53%) in 21 years, deducting net profit not attributable to the parent company of 766 million yuan (+ 22.65%). Q4 achieved a revenue of 1.29 billion yuan (+ 59.26%) and a net profit attributable to the parent company of 206 million yuan (+ 45.1%). Taking into account the impact of the increase in the equity ratio of Chengdu Rongsheng, a subsidiary of Chengdu Rongsheng in the past 21 years, the year-on-year profit side can refer to the total profit. The total profit in the past 21 years was 1.257 billion yuan (+ 13.78%).
Q4 grew faster than expected in a single quarter. The company’s Q3 single quarter growth rate declined and Q4 single quarter growth rate increased significantly in 21 years. It is expected to be related to the time point when the company’s terminal delivery revenue is confirmed, and the industry demand and the company’s product supply are expected to be relatively stable. Combined with Q3 + Q4, the revenue in the second half of 21 was 2.3 billion yuan, an annual increase (+ 21.7%) over the second half of 2020, maintaining a rapid and stable growth. In 21 years, Q1 / Q2 / Q3 / Q4 achieved revenue of RMB 847 / 9.64 / 10.1 / 1.29 billion respectively, with a year-on-year increase of 11.8% / 20.9% / – 6.9% / 59.3% in 2020 and 19.9% / 12.7% / 5.0% / 59.3% in 2019. Q1 / Q2 / Q3 / Q4 realized a net profit attributable to the parent company of RMB 152 / 1.87/2.2/206 million respectively, with a year-on-year increase of 15.1% / 23.0% / 3.8% / 45.1% in 2020 and 16.0% / 15.4% / 27.2% / 43.1% in 2019.
The logic of doubling the slurry recovery continues to be fulfilled. There are 15 new pulp stations approved in 21 years, plus 15 new pulp stations approved in 21 years. At present, the number of pulp stations (including sub stations) of the company is 74. At the beginning of November, Yunnan Province released the plan for the setting of plasma collection stations from 2021 to 2023. There are 19 plasma collection stations in the province, and Beijing Tiantan Biological Products Corporation Limited(600161) is expected to be the biggest beneficiary. In addition, the company is expected to continue to be approved pulp stations in Guizhou, Gansu, Hubei, Sichuan and other places. In 2020, the company’s pulp collection volume will be about 1710 tons. It will continue to be approved pulp stations, and the logic of doubling the pulp collection volume will continue to be fulfilled.
Human coagulation factor VIII has been approved and the profit per ton of pulp is being realized. Human coagulation factor VIII has been approved. The trial production of Chengdu Rongsheng Yong’an base has been completed. After the operation of Yong’an blood system in 22 years, the production capacity will be released and new products will be put into operation. The performance in 22 years is expected to be improved. According to our calculation, the revenue per ton of pulp is expected to increase by 280000, and most of it is expected to turn into profits, and the profit per ton of pulp is expected to increase significantly. Other varieties, such as recombinant coagulation factor 8, chromatography static C and human fibrinogen, will be approved for listing in 2023.
Investment suggestion: the current valuation is about 40 billion yuan, the downward space is limited, the growth logic continues to be fulfilled (increase in pulp investment + increase in profit per ton of pulp), and the growth rate in 22 years is expected to increase. 15 newly approved pulp stations in 21 years are expected to contribute to the increment in 22 years. Coagulation factor 8 has been approved, and the profit per ton of pulp is expected to increase from the second quarter of 22. Highly recommended.
Risk tips: safety production risk, product promotion risk less than expected, performance risk, pulp station expansion risk less than expected, competition risk intensified
Market review: the biomedical sector rose 2.82% this week, outperforming the CSI 300 index by 4.81 PCT and the gem index by 2.10 PCT, ranking first among 30 CITIC primary industries. Most of CITIC pharmaceutical sub sectors rose this week, including medical devices and chemical APIs, with increases of 6.34% and 3.64% respectively; Only the pharmaceutical circulation sector fell 2.24%.
Investment suggestions:
Recent view: we firmly believe in the long-term development value of core assets, and the callback cost performance of high-quality track related companies is becoming more and more prominent. In the short term, two ideas are suggested: no game policy, and on the premise that the policy is relatively immune, it is preferred:
1. Rapid growth, continuous improvement of performance, estimation is still in a reasonable range, and grasp the valuation switching market. Vaccines: Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Chongqing Zhifei Biological Products Co.Ltd(300122) and Shenzhen Kangtai Biological Products Co.Ltd(300601) ; Auxiliary reproductive Service Leader: Jinxin reproductive; Oral consumables: Yantai Zhenghai Bio-Tech Co.Ltd(300653) (active biological bone will be approved soon); Upstream: Jenkem Technology Co.Ltd(688356) (PEG derivative), Nanjing Vazyme Biotech Co.Ltd(688105) (molecular enzyme), Acrobiosystems Co.Ltd(301080) (recombinant protein reagent).
2. Downside risk is limited, waiting for Fundamentals to catalyze. Blood products sector (leading enterprises are expected to benefit from the 14th five year plan of pulp stations in many provinces, and further open the growth of pulp volume, including Beijing Tiantan Biological Products Corporation Limited(600161) and Hualan Biological Engineering Inc(002007) ); Pharmacy sector ( Yifeng Pharmacy Chain Co.Ltd(603939) , Yixintang Pharmaceutical Group Co.Ltd(002727) , Lbx Pharmacy Chain Joint Stock Company(603883) and Dashenlin Pharmaceutical Group Co.Ltd(603233) ), Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (short-term policy disturbance does not change the long-term development logic), China’s sublingual desensitization leader Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) ; China’s leading pharmaceutical glass enterprise Shandong Pharmaceutical Glass Co.Ltd(600529) .
Medium and long term perspective: pay attention to the invariance in change and look for opportunities with relative certainty. The impact of centralized mining continues to expand. The opportunity at the investment level lies in that the establishment of centralized mining is based on “multiple enterprises supply mutually replaceable varieties, and the production capacity can be supplied indefinitely in theory”. The basis for enterprises to maintain product price and profit space is the competition pattern, and the dynamic excellent competition pattern lies in the ability to continuously develop products and product iteration, which remains unchanged.
Start DRG / Dip reform in 2022. As a means of payment, the core role of DRGs is to achieve a balance between improving the efficiency and quality of diagnosis and treatment and ensuring the sustainability of medical insurance through fine medical insurance management. Hospitals that cannot actively adapt to the rules of the game will be eliminated. The opportunity at the investment level lies in that excellent private medical institutions have paid more attention to cost control for a long time, with higher operation efficiency and competitive advantage.
The general trend of industrial development is: China Meheco Group Co.Ltd(600056) industrial manufacturing is upgraded, the competitiveness is continuously improved, and moves upstream in the global production value chain. The competitiveness of upstream raw materials is prominent:
1) biological “core” – life science support industrial chain: domestic enterprises have developed rapidly, reagent quality has reached the international leading level, and their competitiveness has been continuously improved. Entering the overseas market through global comparative advantages, China benefits from domestic alternative logic, with high growth and great development potential.
2) IVD raw materials and consumables: covid-19 epidemic opens a window for the transfer of global IVD raw materials and consumables production supply chain to China.
Accelerated internationalization process: with the breakthrough of key technologies of Chinese enterprises, not only the localization rate of the Chinese market is accelerating, but also some high-quality enterprises have the strength to compete with international giants.
1. Manufacturing upgrading of pharmaceutical industry and continuous improvement of Competitiveness:
Upstream: life science support industry chain, IVD raw materials and consumables, related targets: Nanjing Vazyme Biotech Co.Ltd(688105) , Sino Biological Inc(301047) , Acrobiosystems Co.Ltd(301080) ;
High end medical devices: endoscope and sequencer, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Qingdao Novelbeam Technology Co.Ltd(688677) , Sonoscape Medical Corp(300633) , Aohua endoscope, Micro-Tech (Nanjing) Co.Ltd(688029) ; Huada Zhizao (IPO application in progress);
International layout of medical devices, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) ;
Others: Jenkem Technology Co.Ltd(688356) , Shandong Pharmaceutical Glass Co.Ltd(600529) .
2. Pay attention to the supply pattern: blood products, related subjects: Beijing Tiantan Biological Products Corporation Limited(600161) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) ; Desensitization preparation, related subject: Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) .
3. Private medical service sector with differentiated competition. Ophthalmology, Aier Eye Hospital Group Co.Ltd(300015) ; Dentistry, Topchoice Medical Co.Inc(600763) ; Assisted reproduction, Jinxin reproduction; Cancer treatment services, Hagia.
4. Pharmacy sector. Related subjects: Yifeng Pharmacy Chain Co.Ltd(603939) , Dashenlin Pharmaceutical Group Co.Ltd(603233) , Lbx Pharmacy Chain Joint Stock Company(603883) and Yixintang Pharmaceutical Group Co.Ltd(002727) .
5. Aging and consumption upgrading.
Class II vaccine, related targets: Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) and Changchun Bcht Biotechnology Co(688276) ; Invisible orthodontics, related subjects: Angel of the times;
Risk tips: policy risk, price risk, performance risk less than expected, product R & D risk, expansion progress risk less than expected, medical accident risk, uncertainty of overseas covid-19 virus epidemic, M & A integration risk less than expected, etc.
