Core viewpoints: 1) the continuous expansion of the polypeptide industry chain market: the frequent emergence of large single peptides in the international market and the cliff of polypeptide patents in the domestic market, driving the rapid growth of the upstream CDMO and API market scale; 2) the company is the forerunner in the domestic polypeptide field: ploughing the polypeptide field for more than 20 years, and the number of CDMO projects is in the forefront of the country; the dual layout of the domestic / international market of raw materials and drugs, and the continuous promotion of capacity expansion 3) the preparation business is booming: in terms of preparations, the company's extended development of 9 varieties of polypeptide preparations has obtained 13 production approvals in China, and have won the standard collection quantity one after another.
The company is a leading enterprise of polypeptide CDMO and raw material medicine in China. CDMO and API business are the core focus of the company. Compared with small molecular drugs, polypeptide CDMO has the characteristics of strong customer adhesion and high demand for integration.
From the perspective of competition pattern, European and American enterprises such as Bachem and Polypeptide occupy the patented drug business, while companies and other emerging market enterprises focus on preclinical research business. In recent years, with the rapid release of GLP-1 drugs, there are many varieties under research, and the demand for imitation is increasing, which is expected to provide rich CDMO orders for the upper reaches of the industry. the global polypeptide CDMO market is expected to grow from US $2 billion in 2020 to US $7.9 billion in 2030, with CAGR reaching 14.7%.
Rich in raw materials and drugs, domestic and international layout, production capacity construction continues to advance. The company has 16 independent research and development of polypeptide API varieties, 11 varieties of production approval or activation record have been obtained in the domestic market, and 9 varieties in the international market have been registered by the DMF of the United States, and have established good cooperative relations with Fresenius, Masung, DAEHAN, Shangyao first Biochemistry and other companies. The polypeptide production capacity of the company is 400kg/ year, and it is at full production at present. The fund-raising project "Annual production Line Project of 395kg Peptide API" is expected to reach the scheduled use state in December 23 and full production in August 25. And with the refinancing project "Peptide innovative drugs CDMO, API industrialization Project" gradually landed in the future, it is expected to further expand the company's production capacity, capacity expansion is expected to continue to undertake new orders for APIs.
Master the core technology, the number of CDMO projects is in the forefront of China. The company's CDMO business is divided into two parts: pharmaceutical research and customized production, in which Pharmaceutical Research Services is the company's main CDMO business, accounting for 84% of CDMO revenue in 2022. The company has mastered the core technology such as long-chain peptide coupling technology, and has successively provided CDMO services for more than 40 projects of pharmaceutical enterprises and scientific research institutions, the number of projects is in the forefront of the country, of which one variety has been approved to enter the commercial stage, 18 peptide innovative drugs have entered the clinical trial stage, with rich experience in the project and strong R & D strength.
Layout of downstream polypeptide preparations, collection of price for quantity contribution increment. The company actively extends to the lower reaches of the industrial chain, with a rich product line of preparations, covering immunology, cardiovascular, obstetrics and other fields. By 2022, the company has developed 9 kinds of polypeptide preparations and obtained 13 production approvals in China. The company's preparations Octreotide Acetate injection, Atosiban Acetate injection and somatostatin for injection have all won the bid for national collection, which is expected to further increase the market share of the company's preparations and contribute to the company's performance by exchanging price for quantity.
Investment suggestion: as the leader of domestic polypeptide API and CDMO industry, the company has been ploughing the polypeptide industry chain for more than 20 years, and the downstream driven API and CDMO business is expected to continue to increase volume. We estimate that the operating income from 2023 to 2025 will be RMB 570 million, an increase of 15%, 25%, 40%, and the net profit will be RMB 0.7, 10, 000, 100, 000, 100, 000
Risk hint: production capacity expansion is not as expected; API and CDMO business is not as expected; preparation price and gross profit margin decline risk