The pilot project of formula granules is over, and the development of the industry ushered in new opportunities.
Compared with traditional Chinese medicine, traditional Chinese medicine formula granules have the advantages of stable quality, controllable and convenient use, and are gradually standardized under the long-term policy guidance and support of the state. The national pilot project of traditional Chinese medicine formula granules ended in November 2021, which means that the restrictions on the production and sale of traditional Chinese medicine formula granules have been liberalized. After the launch of the national standard, the sales scope is expanded to the grass-roots terminal market, from the original second-level and above traditional Chinese medicine hospitals (general hospitals) to medical institutions that can provide traditional Chinese medicine services after examination and approval or on record, which is more in line with the daily consumption scene of traditional Chinese medicine. Expand the market space. With the implementation of the national standard policy and the introduction of formula particles into the provincial platform, it is expected that formula particles will be included in more provincial health insurance lists in the future, improving the chances of entering the national health insurance system, so as to increase patients' willingness to spend and enhance their ability to pay.
The pilot pilot vanguard of traditional Chinese medicine formula granules has obvious advantages in first-mover and industrial chain.
The launch of the new national standard puts forward higher requirements for traditional Chinese medicine formula granule enterprises in many dimensions, such as quality control, production process, cost control, raw material traceability and so on. Therefore, the deep ploughing industry, the leading enterprises with complete industrial chain and quality control system will have advantages. It will be difficult for latecomers to catch up in a short period of time in production and sales. Hongri Pharmaceutical Co., Ltd. was founded in 1996, as one of the first six enterprises in the national pilot of traditional Chinese medicine formula granules, constantly tamping the quantity of varieties, production quality, continuous layout of the industrial chain, and has a first-mover advantage in terms of sales channels.
New momentum for the contribution of finished drugs and medical devices
The company's leading product is Xuebijing injection, which is the only national second-class new drug approved by the State Drug Administration for the treatment of sepsis, multiple organ dysfunction syndrome and critical COVID-19. Its excellent treatment data have been published in many important journals in the international critical medical field, such as "critical Medicine" and "Chinese critical Care Emergency Medicine".
In 2021, Xuebijing injection passed the renewal of the medical insurance contract and was included in the 2021 edition of the national medical insurance drug catalogue, and the market space is expected to continue to expand. At the same time, the company also has a number of new drugs under development, including two first-class new drugs, which are expected to land one after another in 3-5 years. The company also lays out the medical device race track. Chaosi Electronics, a wholly-owned subsidiary of the company, mainly produces electronic medical devices, including blood oxygen series, household health and primary health care, and other multi-field single-parameter or multi-parameter new electronic medical products, the products are sold to North America, Europe and other regions. Among them, oximeter and innovative portable oximeter are the main focus of the company at present, and we will build a family health + primary health care model based on Chaosi oxiret products in the future. The company will focus on the domestic market in the future, and we think that the aging population and the rising incidence of chronic respiratory diseases are expected to lead to the continuous growth of the market.
Continue to promote the layout of the whole industry chain and the distribution of raw materials and auxiliary materials
The three subsidiaries strategically lay out the field of raw materials and auxiliary materials to create industry advantages. 1) the sales of the company's wholly-owned subsidiary Prospect Pharmaceutical Industry began in 1950, and the main products include three series of pharmaceutical excipients, APIs and food additives, including 23 leading excipients, 9 API products and 7 food additives. Prospect Pharmaceutical has successively passed a number of international and domestic certifications such as American FDA and EU COS certification, and its sales network is all over the world. 2) Yinorui, the company's holding subsidiary, specializes in the R & D and production of heparin sodium and low molecular weight heparin series of raw materials, and has a complete industrial chain from pig small intestine processing, mucosal heparin to raw materials. At the same time, it has realized the industrialization of graded low molecular weight heparin raw material drugs. Enoxaparin sodium raw material drugs have been registered in China, which is expected to accelerate domestic substitution and complement the existing preparation products of the parent company. It is the first batch of special new "Little Giant" enterprises in Hubei Province. 3) the company controls Sun Company Wantai excipients specializing in the manufacture of medicinal excipients, and is one of the few enterprises engaged in the manufacture of polyacrylic resin series products in the early years. The company's polyacrylic resin series products have won many honors in China and undertake the national standard revision projects of polyacrylic resin Ⅱ, polyacrylic resin Ⅲ and polyacrylic resin Ⅳ in the 2020 edition of Chinese Pharmacopoeia.
Profit forecast
As one of the first six pilot enterprises of traditional Chinese medicine formula granules in China, the company is expected to enjoy the policy dividend. At the same time, the company actively broadens the product pipeline, in finished drugs, medical devices, raw materials and other convenient layout, to create multiple growth points, is expected to usher in a period of rapid growth. The forecast company's income from 2022 to 2024 is 89.24yuan, 107.54 yuan and 12.733 billion yuan respectively, and its EPS is 0.31,0.41,0.51 yuan respectively. The current stock price corresponding to PE is 22.6,17.2 and 14.0 times, respectively.
Risk hint
The risk of price change in collecting or winning the bid, the risk of overseas business affected by exchange rate fluctuations, and the risk of failure in new drug research and development.