Based on the Chinese and American markets, Jianyou Co., Ltd. has expanded its formulations overseas to the world, and has become a formulation platform company with international capabilities. The company's pharmaceutical exports began with heparin injections. In the future, the three-pronged approach of sterile generic injections+Biosimilars+ Biologics is expected to begin a new growth cycle.

Starting with heparin as an ingredient, it grew larger than the integration of formulations and became a platform for the internationalization of formulations. Based on excellent sterile manufacturing, overseas declarations and commercialization capabilities, Jianyou Co., Ltd. has embarked on a steady and steady industrial upgrading path of “heparin raw materials - heparin formulation integration - Sino-US sterile injectables - international formulation platform”.

Heparin APIs: The risk of inventory impairment has basically been released. The short-term supply and demand pattern affects product prices, and the impact on long-term performance is gradually fading. Affected by the sharp drop in the price of heparin, the company plans to reduce inventory value by 1 to 1.2 billion yuan in 23, and the risk has basically been released. The short-term heparin API business is affected by the cyclicality of products. In the long run, the ratio of heparin APIs to the company's revenue and profit is declining year by year. With the rapid growth of the company's formulation business, the impact of heparin API cycle fluctuations on the company's performance is expected to gradually fade.

Pharmaceutical exports: With a global layout, the US market is expected to continue to grow at a high rate. 1) American sterile generic injections: The US market has high barriers and a good pattern. The company already has competitive elements in terms of market channels, R&D pipelines, and manufacturing capacity. It is expected that the amount of sterile injections in the US will continue to increase as the number of ADNA increases, and there are many potential varieties in the future. 2) Biosimilars+ Biologics: The pipeline has a large potential and is expected to be launched in the US market after 25 years. Currently, the company's pipeline products cover the five major fields of reproduction, diabetes, lung disease, growth hormone, and peptides. In terms of bioanalogues, a strategic cooperation agreement has been reached with Tonghua Dongbao on the US market development of three types of insulin, glycine, mendong, and laipong, which are currently in the pre-clinical stage. MAB-22, which is used for cancer treatment, is also in the preclinical phase. In terms of biopharmaceuticals, the company has deployed the orphan drug TNFα inhibitor XtMab-16 (clinical phase II) for the treatment of pulmonary sarcoidosis.

Domestic formulations: Two major low molecular weight heparin preparations have been collected, and many new varieties have continued to grow. As of 2023H1, 12 products have been approved, and 7 products have been collected (including the core heparin products Enox and Nacer). The impact of the collection is stable. Subsequent companies have several products in the review stage, and the variety is further enriched, and it is expected that they will continue to grow.

CDMO: One-stop service for the regulatory market, commercialization has set sail one after another. The company provides one-stop CRDMO services for small molecule chemicals, macromolecular biopharmaceuticals, and novel delivery systems for the global regulatory market. At present, it has helped customers enter the clinical stage of many macromolecule+small molecule products, and commercialization has set sail one after another.

Profit forecast and investment rating: We expect the company's net profit to be -1.5/11.5/1.55 billion yuan for 23-25, which corresponds to 16/12 times PE in 24-25. Covered for the first time, a “gain” rating was given.

Risk warning: Heparin price fluctuations, industry policy changes, R&D sales falling short of expectations, exchange rate fluctuations, etc.