Events:
On September 22, Heypree announced that Tiandao Pharmaceuticals, the company's wholly-owned grandson, has been notified that FDA has approved its registration as a US drug and API supplier of enoxaparin preparations with extensive channels and experience in generic drug sales, with net sales of nearly US $10 billion in 2019.
Point 1: enoxaparin sodium injection has been approved by FDA, and the global market development has accelerated this approval. This is the first time that the drug master document (DMF) of enoxaparin sodium has been approved and activated by FDA in the United States. Tian Dao Pharmaceutical has also become a major supplier of enoxaparin sodium preparations in the United States.
According to the announcement, sales of enoxaparin in the United States, one of the largest markets in the world, are expected to grow from US $455 million (17 per cent of the global market) in 2019 to US $838 million in 2025, with CAGR of 10.7 per cent.
The company's enoxaparin sodium injection has been approved by FDA and is expected to be sold in the United States this year, which will be the starting point for the company's preparation business to open up the US market.
Point 2: to build an integrated whole industry chain of API preparations, with its own competitive advantages constantly highlighting the company's layout of the whole industry chain of heparin "crude products-API- preparations", with a sound business model, the most advanced supply chain management and world-class medical equipment, and sufficient production capacity, it is the largest supplier of heparin APIs in the world, and it is also the largest manufacturer and seller of enoxaparin sodium injection in China and the world.
According to the China Daily, the global market for enoxaparin is US $2.736 billion in 2019 and is expected to grow to US $4.869 billion in 2025, with a CAGR of 10.08%. This variety has a broad market in the future. Three brands of enoxaparin sodium preparations of Inhixa, Neoparin and Prolongin of Tiandao Pharmaceutical have been approved in 35 countries, including the United Kingdom, Germany and Poland, and sold in 21 countries. In the first half of the year, the company's preparation business income maintained a trend of rapid growth, and the global sales of Enuo preparation reached 640 million yuan, an increase of 37% over the same period last year.
The market space of enoxaparin is large, and the company has the advantages of integrated industrial chain layout of raw materials and preparations in the field of varieties, and the competitive advantage is gradually emerging. The approval of FDA for enoxaparin sodium injection will help the company to speed up the expansion of overseas markets and further consolidate its global layout.
Investment advice:
Based on the whole heparin industry chain, Hypree's competitive advantage is gradually reflected, enoxaparin sodium injection has been approved by FDA, the global market development is accelerated, further consolidate its global leading position of enoxaparin preparation, and promote sustained high growth. We estimate that the company's operating income from 2020 to 2022 will be 5.914 billion yuan, 6.789 billion yuan and 7.718 billion yuan respectively, an increase of 27.9%, 14.8% and 13.7% over the same period last year, and the net profit of the company will be 1.072 billion yuan, 1.322 billion yuan and 1.589 billion yuan respectively, and the year-on-year growth rates of 1.2%, 23.3% and 20.2% will be 1.78 yuan, 0.73, 0.90 and 1.08 yuan respectively, corresponding to the closing price on September 21. The corresponding price-to-earnings ratios are 31x, 25X and 21X respectively, maintaining a "highly recommended" rating.
Risk tips: new drug research and development is not as expected, crude heparin prices fluctuate, overseas market expansion is not as expected, and preparation sales are not as expected.