The company's recent situation

On February 18, 2024, the company issued the “Action Plan to Promote Double Improvement of Quality and Return” (hereinafter referred to as the plan), which proposes the following specific measures: 1) focus on the main business and build “world-class”; 2) consolidate governance and guarantee standardized operation; 3) focus on shareholders and strengthen return on investment; 4) ensure compliance and enhance interactive communication.

reviews

Adhere to the “Technology & Market” two-wheel drive, gradually expand the main line, and diversify the agency business. The plan proposes an innovative strategy of “independent research and development, supported by cooperative research and development, and complementary investment and incubation”. We believe that the initiative will continue to enrich the company's independent and agency pipeline: 1) From the main line side, the company relies on the three major R&D and innovation bases of Beijing Zhifei Green Bamboo, Anhui Zhifei Long Koma and Chongqing Zhirui to continue to promote 29 research projects, including quadrivalent influenza vaccine (NDA), human diploid vaccine (preparation for production report), 15-valent pneumonia conjugate vaccine (phase III), and quadrivalent influenza conjugate vaccine (phase III), etc., progressing smoothly; 2) In terms of agency pipelines, according to the company and In the cooperation agreement signed by GSK, the company will add a new agent for the herpes zoster vaccine (Shingrix) to contribute to the performance. In addition, GSK will prioritize the joint development and commercialization rights of the RSV elderly vaccine in mainland China. At the same time, the company will continue to improve its marketing capabilities, strengthen the attraction and training of market talents, and fully explore the social benefits and commercial value of products.

Promote the collaborative development of “prevention & treatment”, and strengthen the layout of the biological field through the integration of resources within and outside the group. The company and the actual controller, Mr. Jiang Rensheng, co-founded Chongqing Wisdom Investment in 2014 and has successfully nurtured a number of innovative technology companies, including Zhixiang Jintai (monoclonal antibody) and Chenan Biology (diabetes/metabolism), covering various fields such as self-immunity, infection, tumors, and metabolism. According to the company's announcement, in November 2023, the company plans to acquire 100% of Chenan Biotech's shares. After the acquisition is completed, the company will officially enter the biopharmaceutical field. In the future, the company will continue to promote the integration of resources within and outside the group and continue to expand the company's business layout.

Adhere to the “investor-oriented” concept and continue to pay cash dividends every year. The company uses cash dividends as an important way to return shareholders. Since listing, the total amount of dividends has reached 4.924 billion yuan, which is equivalent to 3.4 times the initial amount raised. In addition, the company also shares the company's development results with investors through “bonus shares,” “additional shares,” and “repurchases.”

Profit forecasting and valuation

We keep our profit forecast unchanged. The current stock price corresponds to 11.1 times/9.4 times the 2024/2025 price-earnings ratio. We maintain the outperforming industry rating and maintain the current target price of 65.0 yuan (corresponding to the 2024/2025 price-earnings ratio of 14.1 times/11.9 times), which has 26.5% upside compared to the current stock price.

risks

There is a risk that the competitive landscape will deteriorate, and progress in the research pipeline will not be smooth.