1H22 performance is lower than we expected.
The company announced 1H22 results: revenue was 630 million yuan, down 69.4% from the same period last year; net profit from home was 12 million yuan, corresponding to earnings per share, which was lower than we expected, mainly due to the slowdown in global sales of Keweisha (COVID-19 vaccine).
Trend of development
Due to the global COVID-19 vaccine pattern changes and price changes, COVID-19 vaccine sales slowed down. On a quarterly basis, the company's 1Q/2Q revenue was 499 96.62 million yuan; from a regional perspective, the revenue from 1H22 Chinese mainland / overseas regions was 412 million; in addition, 1H22 made a provision of 96.62 million yuan for inventory price loss, which had an one-time impact on the net profit during the reporting period. Taking into account the current domestic vaccination progress, in the absence of large-scale promotion of the fourth dose of vaccination, we think that the existing listed COVID-19 vaccine has a strong uncertainty in the future domestic sales. At present, the iteration of the company's products is still in progress, inhaling COVID-19 vaccine is carrying out sequentially inactivated safety and immunogenicity bridging III phase clinical, mRNA COVID-19 vaccine has entered II phase clinical, the company expects to choose the opportunity to carry out III phase in the future; the company has also started the construction of Shanghai Lingang industrialization base with the first planned production capacity of 100 million doses.
MCV4 officially launched commercialization, and the capital construction of the sales team was completed. Manhaixin (MCV4,ACYW135 meningococcal polysaccharide conjugate vaccine) is the first tetravalent meningococcal conjugate vaccine in China, which was first approved and issued at the end of June 2022, and officially launched commercial sale in China on July 5. Up to now, Manhaixin has completed the market access work in about 20 provinces and cities in China, and we expect this product to begin to contribute revenue to 2H22. By the end of June 2022, the company has a commercialized team of about 400 people, including nearly 300 sales teams, and the sales system is beginning to take shape.
The advance of the R & D pipeline has been blocked and the company expects to resume in 2023. In addition to COVID-19 matrix, the company still has more vaccine candidate pipelines in progress. Among them: the 13-valent pneumococcal conjugate vaccine has completed the basic immunization of phase III clinic in 2021, and the company expects to complete the clinical field work in 2H22; as most of the company's resources have been allocated to COVID-19 vaccine, the progress of research and development of enhanced vaccine for infants and young children with DTcP and DTcP has been delayed, and the company is expected to start phase III clinical trial in 2023.
In addition, the company's pipeline of PBPV, adolescent and adult DTcP and tuberculosis enhanced vaccine are also in the clinical stage, and we expect to see more products promoted to the clinical and approved market in the future.
Profit forecast and valuation
Due to the slow growth of global COVID-19 vaccine coverage and the rapid change in the competition pattern, we downgrade the company's future COVID-19 vaccine sales in the forecast model, and downgrade the 2022 EPS 2023 income of 46.8% to 1.126 billion yuan / 914 million yuan and 91.8% to 0.04% to 0.04 yuan / 914 million yuan. We are optimistic about the future progress of the pipeline except the new crown. Based on the DCF model, we lowered the A-share price by 45.7% to 182.33 yuan (39.6% space) and H-share price by 57.7% to 76.28 Hong Kong dollars (43.4% space).
Risk.
COVID-19 vaccine price reduction risk, commercialization is not as expected, research and development progress is not as expected.