\u3000\u3000 Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) (603392)
At present, the penetration rate of HPV vaccination in China is only about 7%, and the HPV vaccine market is far from reaching its peak
There are about 381 million women aged 9-45 in China. At present, the penetration rate of HPV vaccination among school-age women is only about 7%. The willingness of Chinese women to vaccinate HPV at their own expense is very high. Even so far, the supply of tetravalent and nine valent HPV vaccines in many regions is still in short supply. With the launch of domestic bivalent HPV vaccine in May 2020, it has effectively supplemented the capacity supply gap of HPV vaccine in China. If calculated according to the penetration rate of 30%, 45% and 60% of school-age women, China still needs 280, 450 and 620 million HPV vaccines, and the scale of China’s HPV vaccine market is far from reaching the peak. In the long run, if the male indications of HPV vaccine in China are approved in the future, it will open a broader growth space.
Many governments implemented preferential policies for domestic bivalent vaccine vaccination to further promote the large-scale production of bivalent HPV vaccine
In November 2020, who officially launched the “global strategy for accelerating the elimination of cervical cancer”, and up to 194 countries around the world jointly promised to eliminate a cancer for the first time. In response to the call of who, the National Health Commission plans to launch pilot projects in 15 cities to promote the application of cervical cancer vaccine. At present, Fujian Xiamen, Inner Mongolia Inner Mongolia Eerduosi Resources Co.Ltd(600295) , Shandong Jinan, Guangdong Province, Sichuan Chengdu, Jiangsu Wuxi, Jiangsu Jiangsu Lianyungang Port Co.Ltd(601008) and other places have issued corresponding policies to give free vaccination or vaccination related preferential policies to school-age women. It is expected that more provinces and cities will carry out HPV vaccination preferential policies in the future. Some local governments pay for domestic HPV vaccine, which further promotes the publicity and popularization of HPV vaccination, improves people’s awareness of the harm of cervical cancer and HPV vaccination, and the penetration rate of HPV vaccination is expected to continue to increase.
The company’s HPV vaccine is the first domestic product with significant price advantages and vaccination procedures
The bivalent HPV vaccine of the company only needs “two injections” for people aged 9-14 years. The bivalent HPV vaccine of GSK and the tetravalent and jiuvalent vaccines of MSD need three injections at this age. The company’s products have the advantage of immunization program. At the same time, compared with imported HPV vaccines, the company’s bivalent HPV vaccine pricing has a significant price advantage. The whole process immunization cost of “two needle method” for people aged 9-14 is only 38% of imported bivalent products, and the whole process immunization cost of people aged 15 and over is only 56% of imported bivalent products. Compared with the four price and nine price of import, the price difference is higher. We believe that the company’s pricing has fully considered the accessibility of HPV vaccine. The lower pricing has opened the gap with imported products, making people more willing to pay for HPV vaccine. At present, China’s HPV vaccine is still in a state of imbalance between supply and demand. Multiple factors have promoted the rapid and large-scale growth of the company’s products after listing.
The company’s R & D technology platform has core competitiveness. It cooperates with GSK to develop heavy varieties to form implicit endorsement. The R & D expenditure is large, and the rich product pipeline opens up a broad space in the future
The company’s E. coli prokaryotic expression virus like particle vaccine technology platform is the core competitiveness of the company’s vaccine research and development. GSK, one of the four global vaccine giants, has signed a cooperation agreement with the company to jointly develop a new generation of HPV vaccine. At present, the company has received two milestone payments from GSK. We believe that this shows GSK’s recognition of the company’s vaccine R & D technology to a certain extent, and further affirms the company’s vaccine R & D technical strength. In recent years, the company’s R & D investment has continued to grow, and it is expected to exceed 700 million yuan in 2022. It is expected to continue to grow in the future, indicating the company’s determination to drive the pipeline through R & D. Horizontal comparison with other major vaccine companies in China, with R & D expenses as the comparison dimension, the company has the largest R & D expenses by the third quarter of 2021. At present, the company’s nine price HPV vaccine is in clinical phase 3, and it is expected to be approved for listing at the end of 2024 or early 2025. The company’s new generation of varicella vaccine products are also expected to be listed in 2025. The rich product pipeline opens up a broad growth space for the company in the future.
Profit forecast and investment rating
We believe that from 2022 to 2024, the company mainly relies on bivalent HPV vaccine to drive the company’s performance to maintain rapid growth; From 2025, the company’s nine valent HPV vaccine and new varicella vaccine are expected to be put on the market, which will bring significant revenue and profit increment; In the longer term, the company has invested heavily in R & D, has rich pipelines under research, and has a unique global E. coli prokaryotic expression virus like particle vaccine technology system. The company shows strong potential in R & D, ensuring the growth of the company in 5 ~ 10 years. The company’s profit forecast for 2021-2022 was raised. The operating revenue was increased from RMB 3.425 and 4.763 billion to RMB 5.192 and 8.668 billion, and the net profit attributable to the parent was increased from RMB 864 and 1.394 billion to RMB 1.613 and 2.902 billion. The profit forecast for 2023 was increased. The operating revenue in 2023 was RMB 12.001 billion and the net profit attributable to the parent was RMB 4.535 billion. From 2021 to 2023, EPS is 2.66, 4.78 and 7.47 yuan, corresponding to the share price of 230.48 yuan / share on January 17, 2022, and PE is 87, 48 and 31 times. Considering the rapid and large-scale growth of the company’s bivalent HPV vaccine, the compound growth rate from 2021 to 2023 was 68%, and the current peg was significantly lower than 1, so the rating was raised to “buy”.
Risk tips
The company’s bivalent HPV vaccine sales are less than the expected risk; With the market competition of other domestic HPV vaccines in China, the risk of product price reduction is intensified; The company’s in vitro diagnostic business sales are less than expected risks; The company’s vaccine research and development progress is less than the expected risk.
