Key points of investment
The strength of the Shaanxi Coal Group empowers the long-term development of the company in many ways: In 2023, the controlling shareholder of the company was changed to Shengbang Yinghao (Shaanxi Coal Group), and the actual controller was changed to the Shaanxi Provincial State-owned Assets Administration Commission. We expect that after the entry of Shaanxi Coal Group, the company's pulping resources will be greatly increased, and the company's future development can receive support and guarantee from all aspects of resources such as capital, technology, and channels from the Shaanxi Coal Group.
The amount of pulp collected has exceeded one thousand tons and is in the first tier of the domestic blood products industry: the company currently has 38 single plasma collection stations and 32 plasma stations, leading the industry. We expect the full year of 2023 to harvest more than 1,000 tons of pulp, an increase of about 50% over the previous year. Considering only the impact of the company's operating and construction pulping stations, not considering the impact of potential newly approved pulp stations and epitaxial mergers and acquisitions, the company's pulp collection volume is expected to reach 1,600 tons in 2025, an increase of 100% compared to 2022. It is a company with a lot of room for improvement in pulp collection among blood products companies.
The product structure is upgraded, and the profit per ton of slurry is expected to continue to increase: the total number of products in the company has reached 11, and the number of products is among the highest in the industry. There are nearly 10 products under development, and the launch of new products is expected to further increase the profit of tons of slurry. Among them, high-concentration intravenous human immunoglobulin (chromatography) contributed significantly to the increase in plasma profits. We expect that two subsidiaries, Pacifico and Guangdong Shuanglin, will be able to apply for clinical approval and conduct clinical trials for this product this year. It is estimated that the company's chromatographic isopropyl can be approved for marketing from 2026 to 2027.
The market value of the company's tons of pulp is low, and the market value of growth blood products is underestimated: According to the 2023 pulp collection volume, the market value of the company is 17.29 million yuan/ton, which is only higher than Eiguang Biotech. It is in a lower position within the industry, indicating that the company's market value is undervalued.
The strategic layout of Jing Bing's conventional export business helps the company develop in the long term: Compared with China's domestic Jing Bing market, there is a wider demand and application for Jing Bing overseas, and there is a greater import demand for Jing Bing. Overseas hydrochloride prices are generally higher than domestic ones, and the export of Jing Jing is the company's long-term strategy. The company has already exported from Jingbing to gradually expand routine overseas registration channels. With Brazil and other countries' registration approval, we believe that the future prospects for the company's products to go overseas will improve.
Profit forecast and investment rating: We expect the company's revenue for 2023-2025 to be 24.34, 30.58, and 3.685 billion yuan, respectively, and net profit to mother of 6.12, 7.95, and 1,055 billion yuan, respectively. The current market value corresponds to PE of 35 times, 27 times, and 20 times, respectively. The blood products industry has broad room for growth and high industry concentration. As an underrated flexible target among blood products companies, Shaanxi Coal Group is expected to help the company grow its new pulp station through “endogenous+epitaxial”. The company's 2023 is an inflection point in performance, and it will maintain high growth in 24-25 years. The first coverage gives a “buy” rating.
Risk warning: Risk of performance falling short of expectations, insufficient number of new pulp station approvals, policy risks such as collection, risk of product price reduction, etc.