The future main business has been basically clear, the vaccine will not be transferred! In our previous report, we made an in-depth analysis and discussion on the future main business of Yueyang Xingchang, and concluded that the vaccine will be the main business of the company in the future, and its petrochemical assets will be acquired by China Petroleum & Chemical Corp Group in due course. A few days ago, we learned that China Petroleum & Chemical Corp Group has made it clear that it will not separate the vaccine from Yueyang Xingchang. We can be basically confident that the vaccine will be the main business of the company in the future.
Approval of the new drug certificate for stomach disease vaccine is just around the corner: the company's stomach disease vaccine test results and related information will be broadcast on CCTV in the near future. This will be an indirect recognition of the company's stomach disease vaccine innovation, and will also have a good publicity effect on future sales. We still expect to get the new drug certificate at the beginning of 2007.
The company makes dual preparations for vaccine production: on the one hand, the company is preparing for the production of a new vaccine plant in Zhuhai, and its actual production time may be delayed to 2008.
On the other hand, the company may acquire off-the-shelf GMP plants in Tianjin and other places for production. This will buy time for the company to start producing the vaccine as soon as possible.
We expect that the company's vaccine will be put into production as soon as the third or fourth quarter of 2007. And 2008 will be able to produce greater benefits.
The company's share reform may be carried out at the same time as the second share reform of Sinopec and other Sinopec companies: the first share reform of Sinopec, such as Shanghai Petrochemical, Yizheng Chemical Fiber and Jiangdrill, failed on November 8 and is expected to break through again on December 8. Yueyang Xingchang may be carried out at the same time. The company's consideration level may be between 10 get 3 free and 3.5 shares. In addition, Hunan Fuxing Group Co., Ltd., the company's third largest shareholder, has reached a preliminary agreement with Qilu Securities to transfer 18 million legal person shares.
Investment advice: raise the target price to 24 yuan and maintain the "buy" rating! Due to the improvement of the company's future market pricing for stomach disease vaccine and the acceleration of stomach disease vaccine production process, we believe that the company's stomach disease vaccine revenue will increase in 2008, so we raise the performance forecast that the EPS contributed by stomach disease vaccine is 0.47 yuan, plus petrochemical assets of 0.18 yuan (assuming unchanged), the 2008 EPS is 0.65 yuan. We raise our one-year target price to $24 to maintain our "buy" rating!
