The Zhitong Finance App learned that Dongwu Securities released a research report saying that the first qualifying Sai Sheng Pharmaceutical (06600) “buy” rating is expected to achieve net profit of 10.14/11.87/1,375 billion yuan in 2023-2025, and the net profit for 2023 is estimated to be 1 billion yuan using the segmented valuation method. The company's value is around RMB 20 billion, which is significantly underestimated.

The main views of Dongwu Securities are as follows:

Excellent profitability and excellent operating efficiency, significantly underestimated:

2023H1 revenue is about 1.603 billion yuan (+8.7%), sales revenue CAGR 18%; 2023H1 net profit is about 630 million yuan (+18.4%). The company's gross profit CAGR reached 102% in the past 5 years, the company's gross profit remained above 75%, net margin above 30%, and sales expenses rate below 25%; the company paid cash dividends for two consecutive years and completed a 700 million premium repurchase in 2023. Future dividends and repurchases are still the company's long-term strategy.

Ridaxian maintained rapid and steady growth, and IO combined use began a second growth curve:

Ridaxian has consumer properties, low price sensitivity for patients, is sold out of the health insurance system at their own expense, and accounts for close to 80% outside the hospital. Ridaxian has built strong brand barriers and doctor-patient loyalty. It is still growing steadily (5-year CAGR 14.3%) after experiencing collection and winning the VBP bid in the past 5 years. Currently, policy noise has been completely eliminated. Ridaxian has the potential to reshape the immunotherapy pattern. Combined use with IO has led to a second growth curve. The US is exploring combined use with mRNA vaccines, and overseas markets are expanding, and it has an extremely long life cycle.

A number of innovative products are gradually being launched, and the world's first oral SERD is expected to become a hit product:

Alasitran is the world's first and only approved oral SERD. It is expected to replace fluvirizil and further expand the penetration rate of SERD drugs in HR+ breast cancer. Elasqun is expected to become the first oral SERD to be marketed in China. There are 400,000 new cases of breast cancer every year, and a peak hit product of at least 2 billion dollars. A number of innovative products such as Vaborem (2 billion peak), RRx-001 (1 billion peak), and Travanstar (500 million peak) will be gradually approved for listing from 2024 to 2025.

The world's leading GTP commercialization platform continues to empower product launch:

Saisheng Pharmaceutical pioneered the digital+retail GTP (Direct Patient) model in the industry to open up in-hospital and out-of-hospital markets. GTP began to set up an out-of-hospital market in 2015. Currently, it covers more than 2,000 core hospitals. The GTP platform links doctors, patients, and DTP pharmacies, creating a closed loop of doctor-patient private domain, generating extremely high user stickiness. Currently, there are 200,000 + registered healthcare workers and 250,000+ patient customers, and resources are expected to continue to boost the sales volume of innovative drugs.