The blind results of the phase Ⅲ clinical trial of "recombinant human Helicobacter pylori vaccine (stomach disease vaccine)" developed by Chongqing Kangwei, a 60% subsidiary of Yueyang Xingchang Holdings, have recently been revealed, the ideal immune effect is very encouraging, and the company executives are unprecedentedly United. The company will focus on developing the "stomach disease vaccine", which is the "first in the world", and become a cutting edge of innovative vaccines. It is expected that a first-class new drug certificate will be obtained at the beginning of 2007 and enjoy a five-year market monopoly period.
Chongqing Kangwei has completely independent intellectual property rights of "recombinant human Helicobacter pylori vaccine", which can effectively prevent human Helicobacter pylori infection. Helicobacter pylori is the pathogen of most stubborn stomach diseases such as gastritis, peptic ulcer and gastric cancer. Based on the existing preventive vaccine, the company will begin to develop and declare a therapeutic "recombinant human Helicobacter pylori vaccine" in 2007, so as to expand its product line and cover more market target groups. At the same time, Yueyang Xingchang intends to further increase its stake in Chongqing Kangwei.
We are extremely optimistic about the significant profit prospects of the "stomach disease vaccine". The infection rate of Helicobacter pylori in the population is as high as 50%. The broad market demand and the exact immune effect are the solid foundation for the remarkable profitability of the vaccine. We estimate that after 07 years of market introduction, 4.5 million people will be sold in 2008, with sales of 670 million yuan and net profit of 200 million yuan, equivalent to 0.73 yuan per share. If the company first buys the GMP-certified vaccine workshop in 2007 to put into production as soon as possible, then the 2007 performance may exceed our expectations.
Investment advice: the uncertain risk of possible separation of "shell assets" and "vaccine assets" that we were worried about has been eliminated. According to the follow-up understanding, we expect that the company's share reform will be launched in the near future and completed by the end of the year. According to the average market consideration, the cost corresponding to the latest closing price of 13.8 yuan is 10.6 yuan, and the dynamic PE in 2008 is only 14.5 times. Considering the significant improvement in profitability of the company's "blockbuster innovation vaccine", reference to the average valuation level of American NYSE and NASDAQ biotechnology companies is 40-50 times. The reasonable valuation PE of the company should be 30-35 times, and the corresponding valuation range is 21.8 Mel 25.4 yuan. The current stock price is obviously undervalued and is given an investment rating of "highly recommended-A".
