2022 年可威销售恢复显著，2023 年有望突破历史峰值。2022 年，可威（磷酸奥司他韦）颗粒/胶囊剂型收入为25.9/5.1 亿元，同比增长451%/496%。由于新冠疫情防控措施优化及H1N1 毒株长时间未流行，公司预计甲流在今年3 月份达到高峰、可能4 月中下旬回到正常散发状态，同时认为5~6 月南方省份存在甲流小范围高发的可能性；可威3 月上旬发货达到历史高峰，公司预计非流感季发货量可保持稳定，今年可威销售额创历史新高。我们认为中短期内，公司可凭借品牌及供应链管理优势保持可威在国内奥司他韦市场的80%份额：1）分剂型：颗粒剂型针对客户粘性高、竞争格局较好的儿童用药市场，胶囊剂型通过双品牌策略对冲集采风险；2）分渠道：2022 年医院/零售销售占比约70%/30%，奥司他韦治疗流感正从医院治疗用药外延至预防和家庭储备用药，我们认为可威零售端销售有望提升。Investment advice
The company announced its 2022 results: revenue of 3.74 billion yuan, +310% year on year; Guimu's net profit was adjusted to 76.6 million yuan (loss of 590 million yuan in the same period last year). If changes in the fair value of financial instruments embedded in convertible bonds are not taken into account, adjusted net profit in 2022 was 8.1 billion yuan, and the company expects no additional losses on convertible bonds this year. With the optimization of epidemic prevention and control measures at the end of 2022, the promotion of OTC and e-commerce channels, and the demand for prevention and home drug preparation, we expect the penetration rate of the company's core variety, Kevai, to increase further in 2023/24. Raise the stock rating from “neutral” to “outperform the industry.”
The reasons are as follows:
Covey's sales recovered significantly in 2022, and 2023 is expected to break its all-time peak. In 2022, revenue in granular/capsule dosage forms of Kevir (oseltamivir phosphate) was $2,509/5.1 billion, up 451%/496% year over year. Due to the optimization of COVID-19 prevention and control measures and the H1N1 strain being unpopular for a long time, the company expects influenza A to peak in March of this year and may return to normal distribution in mid-late April. At the same time, it believes that there is a possibility that there will be a small high incidence of influenza A in the southern provinces from May to June; Coway's shipments reached a historic peak in early March. The company expects non-influenza season shipments to remain stable, and sales of Kewei reached a record high this year. We believe that in the short to medium term, the company can use its brand and supply chain management advantages to maintain Kewai's 80% share in the domestic oseltamivir market: 1) Dosage form: granular dosage forms target the pediatric drug market with high customer stickiness and a good competitive pattern. Capsule dosage forms hedge collection risks through a dual brand strategy; 2) Channel: Hospital/retail sales account for about 70%/30% in 2022, and oseltamivir treatment of influenza is being extended from hospital treatment to prevention and household storage. We believe Kewi retail sales are expected to increase.
Medicines for hepatitis B and diabetes are expected to contribute to a considerable increase in income. 1) Hepatitis B: Emitavir phosphate (genotype I) entered medical insurance in December 2021. The company directed revenue of 200 million yuan in 2023; the full genotype product company is expected to start production by the end of 2023; 2) Diabetes: Second-generation/third-generation insulin was approved for marketing in 2020/2021, and the company directed medium- to long-term insulin revenue of 200 million yuan/more than 1 billion yuan in 2023.
Subsequent commercialization varieties are worth looking forward to. In the company's pipeline, Jungliflozin has entered clinical phase III, and liraglutide is awaiting NDA submission. The company expects the above products to be approved in 2024. At the same time, the company has priority domestic commercialization rights for the varieties being developed by Guangdong Dongyangguang Pharmaceutical Co., Ltd. (the controlling shareholder of the company).
What's the biggest difference between us and the market? We are more optimistic about the longevity of the Kewell product life cycle.
Potential catalysts: Flu epidemic fluctuations in southern provinces in summer, progress in product pipeline research and development.
Profit forecasting and valuation
Due to the recovery in sales exceeding expectations, we raised the 2023 EPS forecast by 131% to 1.38 yuan, introducing the 2024 EPS forecast of 1.74 yuan for the first time. The current stock price corresponds to the 2023/24 adjusted price-earnings ratio of 4.9x/3.7x. The rating was raised from neutral to outperforming the industry, and the target price was raised by 58.3% to HK$9.5, corresponding to the 2023/24 adjusted price-earnings ratio of 5.8x/4.5x, up 20% from the current stock price.
risks
Relying on a single product, R&D progress fell short of expectations, and policy suppression of prices exceeded expectations.