The company is a leading domestic blood products company. The actual controller is Sinopharm Group, which has great potential for future growth. Tiantan Biotech has a long history. It is one of the earliest enterprises in China to start the industrial production of blood products. After two major asset restructuring in 2010 and 2017, the company has now become a blood products platform under China Biology. The actual controller is Sinopharm Group, a central enterprise directly managed by the State Council's State-owned Assets Administration Commission, with strong strength. In 2023, the company achieved revenue of 5.18 billion yuan, achieved a pulping volume of 2,415 tons, and has 102 pulp collection stations. Judging from revenue, pulp collection volume and pulp collection stations, the company is a leading domestic blood products company, aiming to become a leading and world-class blood products company in China.
The company obtained several pulping stations during the 14th Five-Year Plan period, and the actual controller, Sinopharm Group, is strong. The company continued to maintain its leading position in the number of plasma collection stations and the scale of plasma collection in China. At the end of 2020, the company had 59 pulp collection stations (of which 55 were in operation). As of March 2024, the company had 102 pulp collection stations (of which 80 were in operation), and the company obtained 43 new batch pulp collection stations in the first three years of the 14th Five-Year Plan period, reflecting the company's strong strength of new batch plasma collection stations in the blood products industry. The amount of pulp collection also increased steadily from 1,713 tons in 2020 to 2415 tons in 2023. Lay the foundation for the sustainability of the company's future performance. Considering the position and strength of the actual controller Sinopharm Group in the Chinese pharmaceutical industry, we judge that Tiantan Biotech is expected to achieve impressive results in terms of future Xinna pulp collection stations.
New varieties of chromatographic isopropyl release are imminent, and there is plenty of room to increase the profit of tons of slurry. In terms of the product hierarchy, Chengdu Rongsheng's fourth-generation chromatographic acidin (10%) has already been marketed. Compared with third-generation hydrochloric acid, this product is safer and more efficient to use clinically. Considering that the blood products market in overseas developed countries is mainly chromatographic isopropyl, we believe that this product has great potential in the future market and is one of the main driving forces for the company's slurry profit increase in the future. In terms of other products under development, Chengdu Rongsheng's recombinant human coagulation factor VIII has been approved for marketing. Human fibrinogen and human prothrombin complex from Lanzhou are in the marketing license application stage; Chengdu Rongsheng subcutaneously injecting human immunoglobulin and injectable recombinant human coagulation factor VII A is undergoing phase III clinical trials. The company's subsequent product lineup is relatively complete, and it is expected that the company will continue to improve its profit level in the future.
Profit forecast and valuation: We expect the company to achieve operating income of 61.0, 72.5 and 8.40 billion yuan respectively in 2024-2026, with year-on-year growth rates of 17.7%, 18.8% and 15.9% respectively, and realized net profit of 13.9 billion yuan, 16.9 billion yuan, and 2.02 billion yuan respectively, with year-on-year growth rates of 24.9%, 22.3%, and 19.2%, respectively. The PE corresponding to the current stock price is 34, 28, and 23 times, respectively. We used Pailin Biotech, Liberal Arts, Hualan Biotech, and Shanghai Laishi as comparable companies. Considering that the actual controller of the company was Sinopharm Group, which received a large number of pulp stations during the 14th Five-Year Plan period, and the amount of pulp collected increased significantly in recent years. We believe that the future company will continue to grow well, and for the first time, we will give it a “buy” rating.
Risk warning: Risk of increased market competition; risk of slurry production growth falling short of expectations.