Incidents:
Watson Biotech released an interim report: In the first half of 2022, the company achieved operating income of 2,348 million yuan (+73.96%) and net profit of 421 million yuan (+31.90%).
Investment points:
The 13-valent pneumonia-conjugated vaccine continues to be released, and the bivalent HPV vaccine is marketed for sale. In the first half of 2022, the company achieved revenue of 2,348 million yuan (+73.96%), of which revenue for the second quarter was 1,692 billion yuan (+84.70%). The sharp increase in revenue was mainly due to continued release of the 13-valent pneumonia-conjugated vaccine. The product's sales volume has grown rapidly since it went on sale in 2020, and achieved revenue of 2,010 billion yuan (+103.17%) in the first half of 2022. The company's bivalent HPV vaccine was approved on March 22, and 884,700 doses were issued in batches in the first half of the year. It is expected that the second half of the year will contribute a certain revenue increase to the company.
Overseas markets have reached a higher level, and the innovative product 13-valent pneumonia conjugate vaccine has entered the international market.
In the first half of 2022, the company's overseas revenue was 216 million yuan (+320.16%). The company continues to cultivate overseas markets. The Hib vaccine was exported to the Philippines in 2012, the ACYW135 polysaccharide vaccine was exported to Nigeria in 2015, and the 13-valent pneumonia conjugate vaccine was exported to Morocco in 2022.
In the first quarter of 2022, the company received an AC polysaccharide vaccine purchase order from an Egyptian customer.
As of June 30, 2022, the company's products have been exported to 18 countries.
Profit forecasts and investment ratings estimate 2022/2023/2024 revenue of 5.112 billion yuan/6.943 billion yuan/7.855 billion yuan, corresponding net profit of 1,247 million yuan/1,804 billion yuan/2.175 billion yuan, and corresponding PE of 56.97/39.39/32.67 billion yuan. Covered for the first time, giving it a “buy” rating.
Risk warning policies lead to product prices falling beyond expectations, risk of product sales and promotion falling short of expectations, risk of R&D progress falling short of expectations, risk of product quality and safety issues, risk of falling short of expectations due to COVID-19, risk of vaccination volume falling short of expectations due to the COVID-19 pandemic, and risk of overseas market policies fluctuating.
