The competition in the human rabies vaccine market is intensifying, while the human hepatitis B inactivated vaccine is in the market recovery period and has not yet been able to decisively improve the company's performance. The company believes that the short-term fluctuations in stock prices are highly correlated with the capital markets and the overall fluctuations of the vaccine industry.
On June 11th, the Chairman of Chengda Biotech (688739.SH), Li Ning, responded to the company's stock price being lower than 120% of its net asset value per share for five consecutive trading days from both internal and external perspectives during an investor briefing held on June 11th.
"The company believes that the trend of the stock price cannot be separated from the influence of the overall capital market and industry cycle. Internally, the intensifying market competition for human rabies vaccines and the market recovery period for human inactivated JE vaccines have yet to have a decisive impact on the company's performance."
According to the prospectus, Chengda Biotech made related commitments to stabilize the stock price during its first three years of listing. If the closing stock price is lower than 120% of the net asset value (BPS) per share for five consecutive days, the company needs to hold an investor meeting within ten trading days.
According to Wind data, the latest net asset value (BPS) per share of Chengda Biotech in the first quarter of 2024 was 23.20 yuan, and the calculated value of 120% is approximately 27.84 yuan. As of the five consecutive trading days before May 29, 2024, which were May 23-24 and 27-29, Chengda Biotech's closing prices were 27.60 yuan, 27.45 yuan, 27.65 yuan, 27.21 yuan, and 27.12 yuan, respectively, meeting the triggering conditions of the commitment.
Currently, Chengda Biotech's main revenue comes from human rabies vaccines, with human rabies vaccines accounting for 93.86% of the total revenue of 1.75 billion yuan in 2023, and the remaining 6.14% from human inactivated JE vaccines.
As Li Ning revealed, the human rabies vaccine is facing intensifying market competition. Chengda Biotech stated in its financial report that as of 2023, there were 11 enterprises producing human rabies vaccines domestically, and the market was facing a situation of oversupply. According to Zhuoshi Consulting, as of mid-September 2022, there were a total of 20 in-process clinical trials of human rabies vaccines in China, and 17 were in Phase III clinical trials or later stage.
At the investor briefing, when asked about the measures Chengda Biotech would take to increase its stock price, Li Ning did not answer directly, but replied that "at present, the company's diploid rabies vaccine is preparing for pre-approval and the Hib vaccine and quadrivalent influenza vaccine are both in Phase III clinical trials. With the increase in market penetration of human inactivated JE vaccines and the listing of subsequent products, we believe that they can play a driving role in improving the company's performance."
As of the first quarter of 2024, Chengda Biotech has invested approximately 677 million yuan in research and development for human diploid rabies vaccines, quadrivalent influenza vaccines, and Hib vaccines, which are among the top few in-process projects, and are expected to contribute to the company's future growth. Li Ning said that the launch of vaccines has a certain degree of uncertainty, but the company will do its best to promote the launch of products.
It is worth mentioning that during the continuous decline of the company's stock price, Chengda Biotech respectively entered into securities lending and repurchase agreements on **** and 5th, lending out 73,100 and 20,600 shares. However, Li Ning expressed that the company's circulating shares are 189 million shares, and the data for securities lending and repurchase agreements is relatively small. "The company believes that the short-term fluctuation of the stock price is highly correlated with the overall fluctuations of the capital market and the vaccine industry."
Cui Jianwei, Vice President of Chengda Biotech, further revealed that as of the first quarter of 2024, the top ten shareholders of Chengda Biotech include China Industrial and Commercial Bank - Bosera CSI Star Market 100 ETF Securities Investment Fund, which holds 1.9771 million shares of the company; 35,010 shares of securities lending have not been returned, a relatively small proportion. In addition to this, it is unknown whether other shareholders of Chengda Biotech have entered into securities lending and repurchase agreements.
It is understood that in order to stabilize the company's stock price, the director and senior management of Chengda Biotech carried out the first shareholding increase in May 2023. Chengda Biotech has implemented two share repurchases with a total amount of 144 million yuan as of now.