With independent research and development technology as the core driving force, the company is one of the few vaccine companies in China that can develop new adjuvants approved by standard FDA (AS01, AS03, AS04, CpG1018 and MF59).
By the end of 2022, the company has 12 highly differentiated high-value innovative vaccine combinations, covering cervical cancer, herpes zoster, COVID-19, influenza and other diseases with a high burden. Using the absolute valuation DCF method to calculate the reasonable equity value of the company is HK $16.157 billion, corresponding to HK $33.45 per share.
We give the company a target price of HK $34. Cover for the first time, giving a "buy" rating.
Independent research and development as the core driving force of innovative vaccine enterprises. With independent research and development technology as the core driving force, the company is one of the few vaccine companies in China that can develop new adjuvants approved by standard FDA (AS01, AS03, AS04, CpG1018 and MF59). By the end of 2022, the company has 12 highly differentiated high-value innovative vaccine combinations, covering cervical cancer, herpes zoster, COVID-19, influenza and other diseases with a high burden. The potential core product, recombinant nine-valent HPV vaccine REC603, is in phase III clinical trials, and the domestic research and development progress is leading.
Focus on the technical route of recombinant vaccine and independently develop new adjuvants. Adjuvant is an important component of recombinant protein vaccine, which can enhance immunogenicity, change the nature of immune response and prolong the action time of antigen. The adjuvant systems of domestic enterprises are mostly controlled by others, and the company has the ability of independent research and development. The company's independently developed BFA01 adjuvant GSK AS01 (QS-21 and MPL) is used in the R & D and production of herpes zoster vaccine, BFA03 adjuvant AS03 (squalene, Tween80 and DL- α-tocopherol) of GSK is used in the R & D and production of COVID-19 vaccine, and AS04 (aluminum salt and MPL) of BFA04 adjuvant GSK is used in the R & D and production of the second generation HPV vaccine.
HPV vaccine: the company's core layout products, based on the new adjuvant is expected to achieve corner overtaking. The company's nine-valent HPV vaccine REC603 and Gardasil-9 vaccine have similar immunogenicity. The phase I clinical of REC603 showed that REC603 was safe and well tolerated, and there was no significant difference in the incidence of adverse events between the vaccine group and the placebo group, and the immunogenicity was good in humans, with a significant increase in NAb GMT levels for all target HPV types (defined as a 4-fold increase in neutralizing antibody titers). The company developed the second generation recombinant HPV vaccine based on self-developed new adjuvants. According to the company's preclinical research, the immunogenicity of two doses of REC604a is equivalent to that of three doses of Gardasil vaccine. It is expected to change the immune procedure of HPV vaccine, and only two injections can still obtain the same protective effect.
COVID-19 vaccine: recombinant protein + mRNA double-wheel drive, seize the new opportunity of vaccine development. The clinical data related to the recombinant COVID-19 vaccine ReCOV showed that the immunogenicity of ReCOV was in the forefront. The first group of subjects were enrolled in the global multicenter phase III clinical trial. The company expects to submit an EUA/BLA application in early 2023. Meanwhile, ReCOV was approved for a clinical trial by NMPA on May 2, 2022. The freeze-dried lipid nanoparticles (LNP) mRNA COVID-19 vaccine developed by the company, which can be stored at 4 ℃ or room temperature (25 ℃) and has long-term stability, improved the accessibility of mRNA vaccine and was approved in Philippine clinical trials in June 2022.
Herpes zoster vaccine: a blue ocean market with huge unmet demand. According to the "Research Progress on Epidemiological characteristics and Vaccine Immunization Program of Herpes Zoster in China" (Deng Huijie, Liu Fangxun) published in 2021, the annual incidence of HZ in China is 1.90 kg 6.42 pm, of which the incidence of neuralgia PHN is 2.4%-40.2%. If the penetration rate of herpes zoster vaccine in people aged 50 and over is 5%, we estimate that the market space of recombinant protein vaccine is close to 25 billion yuan. According to the results of the company's preclinical research, the immunogenicity of the company's recombinant herpes zoster vaccine REC610 is not inferior to that of Shingrix, and the levels of IFN- γ and IL-2+IFN- γ of REC610 are higher than those of Shingrix. The company was approved for clinical trials at the end of 2022.
Risk factors: clinical progress less than expected risk; R & D failure risk; increased competition risk; less than expected commercialization risk; industry policy change risk; persistent loss and refinancing risk.
Profit forecast, valuation and rating: we expect the company's revenue in 2022-2024 to be 0,80,120 million yuan respectively, and its net profit to be-782,280,321 million yuan respectively, corresponding to the EPS forecast of-1.62,0.58 and-0.66 yuan respectively. Using the absolute valuation DCF method to calculate the reasonable equity value of the company is HK $16.157 billion, corresponding to HK $33.45 per share. We give the company a target price of HK $34. Cover for the first time, giving a "buy" rating.