With 2024H1, the company achieved revenue of 0.741 billion yuan. The company achieved revenue of 0.741 billion yuan in 2024H1, up 16.81% year on year; net profit to mother was 0.307 billion yuan, up 23.51% year on year. In 2024Q2, revenue was 0.43 billion yuan, up 20.6% year on year; net profit to mother was 0.157 billion yuan, up 9.84% year on year.

The hexavalent norovaccine went overseas successfully, and innovative research and development continued to advance. The company signed an “Exclusive License Agreement” with HiLlevax on January 6, 2024. The company authorized HillEvax to develop, manufacture and commercialize the recombinant hexavalent norovirus vaccine and its derivatives in regions other than China (including Hong Kong, Macao and Taiwan). The transaction amount includes a down payment of 15 million US dollars, development and sales milestone payments of up to 0.2555 billion US dollars, and a single-digit percentage of actual annual net sales. The company received a down payment of $15 million in March 2024, and the company will continue to advance the implementation of the license agreement. Earlier, Hillevax announced that phase 2b of its self-developed bivalent norovaccine had failed, and development will be stopped in the future.

We believe that subsequent companies and partners will continue to promote the development and commercialization of hexavalent noroproducts, and that going overseas with technology is expected to continue to contribute new growth to the company.

Employee stock ownership plans were released to help the company develop in the long term. In August 2024, the company announced an employee stock ownership plan. The number of underlying shares to be held is no more than 3 million shares, accounting for 2.23% of the total share capital, and plans to grant 2.59 million shares for the first time. The shareholding plan was awarded to a total of 66 company directors, executives, supervisors, middle management and core cadres. The transfer price is 30 yuan/share, and the duration is 36 months. The first part of the assessment period was 2024-2025, based on 2023:1) First unlocking period: net profit/operating income growth of not less than 20% in 2024; 2) Second unlocking period: net profit/operating income growth of not less than 30% in 2025.

The equity transfer was implemented, and the risk of reducing Xiaofei's holdings was released. On September 9, 2024, the company announced that the company's shareholder Ningbo Shengdao Venture Capital Partnership (Limited Partnership) plans to transfer 8.079 million shares of the company's shares to Sichuan Development Securities Investment Fund Management Co., Ltd. through an agreed transfer, accounting for 6% of the company's total share capital. After this transfer, Ningbo Shengdao and its co-actors held a total share of 2.35% of the company's shares.

Profit forecasting and valuation. We expect the company's net profit to be 0.75 billion yuan, 0.82 billion yuan, and 0.91 billion yuan respectively in 2024-26, up 48%, 9%, and 11% year-on-year respectively. Referring to comparable companies Kangtai Biotech and Zhifei Biotech, PE in 2024 was 15.3 times and 6.0 times, respectively. The company's rabies vaccine is still being released. The Noro vaccine has entered the global clinical phase. We gave the company 11-14 times P/E in 2024, with a reasonable value range of 61.56 to 78.35 yuan, and gave it a “superior to the market” rating.

Risk warning. Accounts receivable, risk of inventory impairment, risk of slowing diploid rabies vaccine release, risk of Norovirus vaccine development.