Incident review
On January 10, 2024, the company issued an announcement. The company recently received the “Notice of Acceptance” issued by the State Drug Administration regarding the application for registration and marketing of drugs produced by the company in the country. The company's Yipei Growth Hormone Injection (former name: Y polyethylene glycol recombinant human growth hormone (YPEG-GH), Y-PEG recombinant growth hormone injection) has been reviewed and accepted.
Management analysis
The competitive landscape for long-acting growth hormone is good, and the company's product line is expected to be further enriched. As of the end of 2023, the only long-term growth hormone manufacturer approved for listing in China is Jinsai Pharmaceutical, and the competitive pattern for long-term growth hormone is good. According to the company's announcement, the marketing application for Yipei growth hormone injection was classified as a therapeutic biological product category 1. It is a long-lasting human growth hormone independently developed by the company and intended to be used to treat growth disorders in children caused by insufficient secretion of endogenous growth hormone. Yipei Growth Hormone Injection uses 40kD Y-branched polyethylene glycol (YPEG) molecules to modify human growth hormone (rhGH) as a single molecule, and preferably modifiers with high biological activity and non-N-terminal sites. While ensuring efficacy, the aim is to reduce dosage and obtain better long-term drug safety. If Yipei growth hormone injections are approved for marketing in the future, it will further enrich the company's product line and enhance the company's overall competitiveness.
Slow B treatment continues to advance, and the core product Pegbin is expected to maintain a high growth rate. The clinical cure for chronic hepatitis B has now entered a new stage, from early exploration to international recognition to rapid and in-depth development. At present, several studies have confirmed that the clinical cure rate of people treated with nucleosides, those carrying inactive HBsAg, children with chronic hepatitis B, and pregnant women treated with polyethylene glycol interferon alpha (PEG-IFNα) after delivery can reach more than 30% or higher. The company continues to promote hepatitis B clinical cure research based on Pegbin, and has successively supported many public welfare projects such as “Everest” for clinical treatment of hepatitis B and liver cancer prevention and control, and has further explored the potential of the Pegobin market. As the number of people treated with chronic hepatitis B antiviral treatment continues to expand, scientific evidence on clinical treatment of hepatitis B continues to increase, and awareness continues to rise, combined with the market monopoly position, Pegbin sales are expected to achieve continuous breakthroughs in the future.
Profit Forecasts, Valuations, and Ratings
We maintain our profit forecast. We expect the company to achieve net profit of 4.71 (+64%), 6.72 (+43%), and 9.02 (+34%) billion yuan in 2023-2025, corresponding to current EPS of 1.16 yuan, 1.65 yuan, and 2.22 yuan, respectively, corresponding to the current P/E of 43, 30, and 22 times, respectively. Maintain a “buy” rating.
Risk warning
New product approval falls short of expectations; new product sales promotion falls short of expected risk; risk of technical results not being effectively transformed.