The company is currently in a stage of rapid growth. The company is a veteran domestic pharmaceutical enterprise. under the influence of the three years of the epidemic, the company's income increased from 916 million yuan in 2017 to about 2.5 billion in 2022, with a compound growth rate of about 22.2%. The company has ushered in a period of rapid growth.
Under the background of aging, the domestic market for heart failure is huge, and the clinical use of new activin has obvious advantages. According to the "Prevalence and Incidence of Heart FailureAmong Urban Patients in China" data released by Hua Wang et al in 2021, the number of patients with heart failure over the age of 25 in China is about 12.1 million, and the number of new patients is about 3 million every year. In recent years, with the aging of the population, the number of heart failure patients in China continues to grow. In the treatment of acute heart failure, neovasculin plays an important role in clinic because it can reduce venous tension (optimize preload) and arterial tension (reduce afterload), as well as increase sodium excretion and diuresis. In addition, compared with other therapeutic chemical drugs, the effect of neovasculin is more comprehensive, and as a biological preparation, it also has the advantages of high bioavailability and mild side effects.
New active element: after entering the medical insurance, the volume is released quickly, and the market competition pattern of this product is excellent. Xinhuo was included in health insurance in 2017, and since then, sales have risen sharply, from 370,000 in 2016 to 4.59 million in 2021, an 11.4-fold increase in five years. In 2022, the revenue of this product is expected to account for 88% of the company's overall revenue, and the revenue is expected to be about 2.2 billion yuan. We estimate that the sales of new active ingredients in 2022 will be about 6.15 million. In terms of market competition pattern, at present, only Dingsheng's recombinant human brain natriuretic peptide is declared and produced in China. in addition, Wotai Biology and Danhong Pharmaceutical are in the first stage of clinical practice, and the overall competition pattern is excellent.
The company's profits in 21-22 are mainly due to asset impairment and COVID-19 vaccine and other drag, and the performance is expected to return to high growth in 2023. The company's performance was mediocre in 2021-2022, mainly due to the impairment of Imdo's intangible assets group of 458 million yuan in 2021, and mainly due to the long-term assets related to the Russian vaccine project, inventory impairment losses and development expenditure conversion costs totaling about 3.2yuan in 2022. we expect that with the improvement of the company's business, asset impairment and other pressure will be greatly alleviated in 2023, and the company's performance is expected to recover significantly. The apparent and endogenous growth rates of performance will be very bright.
Relying on the strong sales channels of shareholders, the core varieties are sold quickly. Kangzhe Pharmaceutical is currently the largest shareholder of the company. the core products of the company, Xinhuosu and Imdo (Chinese market), have been entrusted to Kangzhe Pharmaceutical for promotion. Kangzhe Pharmaceutical can cover more than 50000 hospitals and medical institutions in China, as well as more than 200000 terminal retail drugstores. The group has more than 4000 sales staff and strong sales channels.
Profit forecast and valuation. We estimate that the company's homing net profit from 2022 to 2024 will be RMB 3.8x9.3 billion respectively, with a corresponding growth rate of 79.7%, 148.2% and 31.1%, corresponding to the current market capitalization PE of 34-14-10. Taking into account the vast potential of the heart failure market, and the new activin is currently in a rapid release stage, covering for the first time, giving a "buy" rating.
Risk hints: the risk of intensified market competition; the risk that the price of simple contract renewal negotiations is lower than expected; the risk that sales are not as expected.