Key elements of the report
Recently, the company announced its 2019 results KuaiBao: during the reporting period, the company achieved revenue of 621 million, year-on-year + 5.13%; net profit of 69 million, down 26.18% from the same period last year; and the overall performance was in line with expectations. At the same time, the company announced the blind results of the phase III clinical trial of the CPT-MM301 project:
The preliminary analysis shows that the CPT-MM301 project has reached the main end point index and the key secondary end point index set by the test.
Main points of investment:
The III phase of the CPT project has reached the preset end point and is expected to be approved for listing next year:
The results showed that the CPT-MM301 project had reached the predetermined primary and critical secondary endpoints of the trial. The primary endpoints (progression-free survival time) and critical secondary endpoints (overall survival time, disease progression time, etc.) of CPT combined with thalidomide and dexamethasone group (trial group) were better than those of placebo combined thalidomide and dexamethasone group (control group). The differences of the above end points between the two groups were statistically significant. The effectiveness and safety of the test group are in line with the expectations of the trial, and the clinical data need to be analyzed and summarized and applied for NDA. We expect CPT to file an NDA filing in the middle of this year and is expected to be approved for listing in 2021. As a new mechanism of action (DR4 / DR5), new antineoplastic drugs show good safety and efficacy in the treatment of refractory / recurrent MM, and are optimistic about the commercial performance of the first indication of CPT and the research progress in other indications.
Annual performance is in line with expectations; future performance is expected to gradually stabilize
In 2019, the company achieved an income of 621 million and a net profit of 69 million; the growth rate of net profit decreased by 26%. This is mainly due to the continuous pressure of the main variety Jin Lujie under the influence of medical insurance control fees, and it is estimated that Jinlujie's sales revenue for the whole year of 2019 is more than 400 million. We think: 1. Although in the short term, the company's performance is still in the stage of decline and has not yet reached an inflection point, as Jin Lujie has been removed from health insurance to become a self-financed product, the most severe policy shock to the product has passed; 2. At the same time, with the consolidated performance of the subsidiary Tianjin Hankang, the company's income structure has been diversified, and Hankang's good performance growth will help the company's overall performance to accelerate and stabilize. 3. It is expected that CPT will be listed in 2021 and achieve commercial sales revenue, which will become a new growth point for the company. The company's overall performance is expected to gradually stabilize and usher in an inflection point in 2020.
Wanlian Securities
Positive changes have taken place in the company's fundamentals and continue to be optimistic about the company's development prospects in the first coverage report released at the beginning of February this year, we clearly pointed out that: with the rapid development of Tianjin Hankang CRO business, the start of Jingmen Raw Drug Base and the smooth clinical progress of the third phase of Beijing Shadong CPT project, the company's diversified collaborative business transformation has achieved initial results, and positive and obvious changes have taken place in the company's fundamentals: 1. Jin Lujie faces the policy repression factor has bottomed out, the product does not have the growth but still can contribute certain cash flow; 2. The rapid development of Tianjin Hankang CRO business has gradually increased its contribution to the company's performance, which is expected to accelerate the overall performance of the company to stabilize and usher in a reversal; the 3.CPT project is progressing smoothly, with the subsequent commercial listing and other indications research, opening the valuation ceiling and long-term development space for the company. In the future, we continue to be optimistic about the company's business strategy transformation and development prospects.
Profit forecast and investment advice:
It is expected that in 2019,2020 and 2021, the company will achieve net profit of 69 million, 116 million and 133 million respectively; the corresponding EPS will be 0.67,1.13,1.29 respectively; and the corresponding current share price PE will be 59 times, 35 times and 31 times respectively; the company will gradually get rid of the dependence on single product business, and at the same time, with the diversification of business layout and the listing of innovative drugs, the company will usher in a new round of business development cycle. Continue to recommend and maintain the "overweight" rating.
Risk factors: the risk that the production and operation of Wuhan base is continuously affected by the epidemic, the follow-up review progress of innovative drug projects and the risk that commercial performance is not as expected.
