\u3000\u3000 Chengdu Kanghua Biological Products Co.Ltd(300841) (300841)
Event: the company released the performance forecast for 2021, and the net profit attributable to the parent company is expected to be 808-840 million yuan, with a year-on-year increase of 98.02% – 105.86%; The net profit deducted from non parent company was 538-570 million yuan, with a year-on-year increase of 33.51% – 41.15%, and the performance was in line with expectations.
Comments:
The performance was in line with expectations, and the net profit margin increased significantly after deducting non profits. According to the company’s performance forecast, in 2021, the net profit attributable to the parent company after deduction is between 538-570 million yuan, and the net interest rate after deduction is expected to be between 46.37% – 49.14%, which is significantly higher than 38.79% in 2020, mainly due to the GMP compliance inspection of the second workshop of viral vaccine and the completion of the change of drug production license, The production capacity of human diploid crazy seedlings has been significantly improved, and the sales price of products has increased.
The quantity and price of human diploid crazy seedlings have risen at the same time, and the performance is expected to achieve rapid growth in 2022. 1) Price increase: in 2021, the price of human diploid crazy seedlings will be increased in 9 provinces such as Guangdong, Anhui and Hubei, with an average price increase of 12%. Other provinces will follow up in succession; 2) Capacity expansion: the second workshop passed the certification in 2021 and doubled its capacity. Batch issuance began in November. The average batch issuance volume in the first 10 months was 300000 pieces / month and reached 600000 pieces / month from November to December. The sales volume in 2021 is about 4 million units, and the sales volume in 2022 is conservatively estimated to be 6-7 million units. Considering the simultaneous rise of volume and price, the net profit in 2022 is expected to reach 870 million, and the performance is expected to increase significantly.
Entering the pet rabies vaccine market is expected to bring at least 2 billion revenue in the future. There are about 100 million pets in China, and the annual use of rabies vaccine is only 25 million. With the tightening of national pet management policies, there will be a demand of hundreds of millions in the future. The products represented by the company are rabies vaccine for dogs, and the annual sales volume is expected to reach 50 million in the future. The products of Hangzhou Youben (listed) and Guangxi aichong (listed in 2022) have higher quality and better protection effect, and the market share is expected to exceed 30% in the future, corresponding to 15 million; According to the calculation of single income of 100-150 yuan, the peak value is expected to reach 2 billion yuan.
Profit forecast: it is estimated that the operating revenue from 2021 to 2023 will be RMB 1.160/18.90/3.06 billion respectively, with a year-on-year increase of 11.7% / 62.9% / 61.9%; The net profit deducted from non parent company was 561 / 890 / 1.403 billion yuan respectively, with a year-on-year increase of 37.5% / 58.7% / 57.5%, corresponding to 34 / 22 / 14 times of PE from 2021 to 2023, maintaining the “buy” rating.
Risk factors: the risk of product batch issuance falling short of expectations, the risk of intensified market competition, the potential risk of product safety, covid-19 epidemic and other uncertain risks
