Summary of the report
The acquisition of BV will accelerate the process of internationalization and achieve a differentiated competitive advantage. BV is a biotechnology company specializing in the research, development, production and sale of bioanalysis kits, recombinant proteins, enzymes, antibodies, biological small molecules and other products used in life science research. Its biggest customers are Roche and Pfizer Inc, more than 70% of its employees have doctoral degrees, and their net profits from January to September in 16 years and 17 years are $1083 and $9.2 million, respectively. The acquisition of BV will enhance the company's international influence and provide a platform for possible international mergers and acquisitions in the future; it will also have significant synergy with existing precision medical platforms and significantly reduce costs; the company can also introduce promising BV products such as obesity detection kits into China, in addition, CAR-T cellular immunotherapy is also a key research direction of BV in the future, and there is great room for cooperation with the company. Cost-side collaboration and new product development will highlight the company's advantage in precision medical differentiation competition.
Combined with Yongtai Bio Qiang, the business space of cellular immunotherapy is huge. The company signed a strategic cooperation framework agreement with Yongtai on January 13. Yongtai is in the leading position in the research of cellular immunity technology in China. EAL has been successfully applied in clinic and has been studying CAR-T. The company will carry out in-depth global cooperation with Yongtai in the fields of recombinant proteins and enzymes, and Yongtai will transform no less than ten products related to cellular immunotherapy. Be optimistic about the profit growth space that this strategic cooperation brings to the company.
Precision medical business is expected to achieve rapid growth. Hull Medical mainly focuses on women's health, and its cell DNA quantitative analysis technology is the mainstream detection method for cervical cancer in the future. It also cooperates with Heidelberg Medical College in Germany and Karolinska Medical College in Sweden to build an early diagnosis project for breast cancer. The technology is leading in the world, and it is now in the stage of domestic clinical certification, with a huge market space and tens of millions of downstream cancer screening cases. The project "Pharmacogenomics and Comprehensive Evaluation system of Chinese accurate Drug use" participated by Sanji will formulate industry standards and will focus on the development of psychotropic drugs in the future. It is estimated that the market size of in vitro diagnosis and molecular diagnosis in China will reach 54 billion and 5.28 billion in 2019.
The precision medical studio advances rapidly to realize the ecological closed loop. The company has set up 16 precision medical studios, 100 in 2018 and 300 in the future, which will help the company to bind local channels and expert resources, achieve a strong platform effect, and quickly introduce and integrate industrial resources.
The business of PVP and Orez is developing steadily. The company's PVP production capacity ranks third in the world, and its sales will exceed 6000 tons in 2017. if it successfully passes the FDA certification in the United States, it will open up the overseas high-end market. With a capacity of 2500 tons, Orezi has maintained rapid sales growth since it was put into production 13 years ago, and is expected to contribute 150 million of its profits when it reaches production.
Profit forecast and investment rating. Without considering the BV consolidated table for the time being, the company's net profit in 17-19 is expected to be 118 million yuan, 164 million yuan and 213 million yuan respectively, and the EPS is 0.69,0.96 yuan and 1.25 yuan respectively. At present, the share price of 41.81 yuan corresponds to 61 times, 44 times and 34 times of PE respectively.
Compared with the Hong Kong stock Kingsley, the new third board Feipeng biology, cloud clone, the 17-year PE is 64-175times, the market generally gives the life science research target a higher valuation, BV has stronger R & D advantages than the above target, and the product line is more complete, so it deserves a higher valuation premium. The current medical services plate PE (TTM, holistic approach) is 70.4 times, and the average PE of recent mergers and acquisitions in IVD industry is 37.46times. Considering the acquisition of BV positioning precision medical platform, rapid establishment of precision medical studio to create precision medical ecological closed loop, and cooperation with Yongtai biological strategy in cellular immunotherapy product development, it is expected to take the lead in breaking through CAR-T technology in domestic enterprises, which can give a valuation level higher than that of the same industry. Give the company 70 times PE in 2018, with a medium-term target market capitalization of 11.4 billion yuan, corresponding to the target price of 67 yuan, 60% upward space, and maintain a "buy" rating.
