This report is read as follows:
Taking into account the valuation of the industry and comparable companies, as well as the underpricing behavior caused by high prices excluding risks in the process of inquiry, we expect the price range of Fudan Zhangjiang to be 8.50-9.81 yuan.
Summary:
The total share capital of Fudan Zhangjiang before the offering is 923 million shares, of which 340 million shares have been listed on the Hong Kong Stock Exchange, and the Hong Kong shares closed at HK $5.34 as of June 2, 2020. Taking into account the valuation of industry and comparable companies, the price of Hong Kong stocks and the underpricing behavior caused by the removal of risk during the inquiry process, we estimate that the inquiry range of Fudan Zhangjiang on June 3 is between 8.50 yuan and 9.81 yuan.
Fudan Zhangjiang photodynamic technology level is leading in the world, and the market position of core products is stable. In 2019, the company achieved revenue of 1.029 billion yuan and net profit of 227 million yuan. The annual compound growth rate of revenue and net profit in the past three years was 41.98% and 73.78% respectively, and the gross profit margin remained high. The net profit rate rose from 11.78% in 2017 to 21.44% in 2019. The unit price of the company's core products, Ella and Ribao, remained stable, and the "two-vote system" policy had little impact on the company. The increase in market demand has led to a substantial increase in sales, and the company's operating performance is eye-catching. The company's market share in 2019 was 13.5%, ranking second in the terminal sales of the sample hospital, and aminolevulinic acid hydrochloride ranked first in the field of sharp wet pen medication. Fudan Zhangjiang has a number of key projects under research, which has become the company with the largest number of photodynamic drug product lines in the world, and has built a PSD database containing 3435 photosensitive compound information, including seven data subsets, photodynamic technology platform has great advantages.
Based on the above analysis and the disclosure of the company's prospectus, according to the similarity of products or business, we choose 002773.SZ, 300558.SZ and 603590.SH as comparable companies. The price-to-earnings ratio of comparable companies is 23.04-196.94 times in 2019, with an average of 89.68 times, and the predicted price-to-earnings ratio in 2020 is 26.84-126.95 times, with an average of 63.69 times.
Reference to the company's industry "C27 Pharmaceutical Manufacturing" nearly a month (as of June 2, 2020) static price-to-earnings ratio of 41.73 times. Based on the valuation of the comparable company and the industry, with reference to the Hong Kong stock price of the company, and according to the 2019 return net profit disclosed in the prospectus, we give a valuation range of 39-45 times PE, which is lower than the average price-to-earnings ratio of the comparable company but close to the static price-earnings ratio of the industry. based on the estimated total share capital of no more than 1.043 billion shares after the offering, the estimated market value after the offering is 8.867 billion yuan to 10.231 billion yuan. The corresponding issuing price range is 8.50 yuan-9.81 yuan.
Risk tips: (1) beware of 10% high price rigid elimination risk and the second game behavior on the day of market quotation. (2) the risk that the progress of new drug research and development is not as expected.
