Event

On August 28, 2022, the company released a semi-annual report that the revenue in the first half of 2022 was 630 million yuan, down 69.45% from the same period last year; the net profit was 12.238 million yuan, down 98.69% from the same period last year; and the non-return net profit was a loss of 56.769 million yuan.

Comment

COVID-19: the epidemic situation has slowed down, the revenue of injection forms has declined, and the global innovation of inhaled dosage forms is in clinical progress.

In the first half of 2022, the company's revenue was 630 million yuan, down 69.45% from the same period last year. The decline in revenue is due to the slowdown in global COVID-19 vaccine vaccination rate growth, reduced vaccine demand, vaccine product price adjustment and COVID-19 vaccine-related inventory reduction. The company's sales expenses in the first half of the year were 88.9 million yuan, an increase of 157.1% over the same period last year, resulting from an increase in sales staff and increased marketing promotion.

The company's adenovirus vector Miao Keweisa was included in the WHO Emergency use list (EUL) in May 2022. Its advantages over the mRNA class COVID-19 vaccine are: 1 dose is effective and does not need to be transported and preserved in cryogenic conditions.

Through the development of respiratory mucosal immunization technology, the company inhaled COVID-19 vaccine uses atomization inhalation to atomize the vaccine into tiny particles and enter the respiratory tract and lungs through oral inhalation; it can stimulate mucosal immune response. This is additional protection in the mucous membrane of the respiratory tract that cannot be brought about by intramuscular injection. The company has completed the clinical Ⅰ / Ⅱ phase trial of the product, carried out the sequential immune clinical trial, and promoted the application for emergency use.

MCV:MCV4 domestic exclusive, sales are steadily advancing. In December 2021, China's first tetravalent meningococcal polysaccharide conjugate vaccine MCV4 (Manhaixin) was approved in China, and in June 2022, the first batch of Manhaixin products was issued. We believe that MCV4 will accelerate growth. The company MCV2 and MCV4 have completed access to nearly 20 provinces and cities.

MRNA and other pipelines: innovation-driven, abrupt rise based on accumulated strength is in sight. The company's mRNA COVID-19 vaccine is in clinical phase 2, and the research and development of PCV13i and component DPT, as well as the construction of mRNA industrialization base in Shanghai Lingang (the first phase planning capacity is 100 million doses) are worthy of close attention.

Profit forecast and investment suggestion

According to the changes in the epidemic situation and COVID-19 's vaccine sales in the first half of the year, we lowered our profit forecast and reduced the company's annual revenue in 2022-23-24 by 37.6% to 1.823 billion yuan from 20-22-25 to 1.823 billion yuan. The net profit of homing mother was reduced from 3.1 to 3.337 million yuan, and decreased by 207 percent to-327,000,000 pounds. Maintain a "buy" rating.

Risk hint

The changes of epidemic situation at home and abroad affect the risks such as main income, inventory impairment pressure and falling price.