Incident: The company released its 2020 performance report, with operating income of 3,295 million yuan, +1.17% year on year; net profit of the mother was 839 million yuan, +16.79% year on year; EPS was 0.96 yuan. The performance exceeded market expectations.
Comment:
Performance recovered quarterly, and Combusip's growth rate gradually recovered: the company's quarterly revenue from 2020 Q1 to Q4 was 6.33/7.61/9.55/ 947 million yuan respectively, -11.76%/-5.13%/+7.15%/+11.76%; Guimu's net profit was 177/1.58/244/260 million yuan, -16.30%/+22.20%/+15.32%/+56.53% year on year.
As the impact of the COVID-19 pandemic gradually weakened, the company's performance showed a quarterly recovery trend. The fourth quarter showed high year-on-year growth due to the low base in 2019. The profit side grew faster than the revenue side. It is estimated that cost control was strengthened by optimizing academic promotion methods and strengthening management and control. From 2020 Q1 to Q3, Combusip's sales at sample hospitals were 0.48/0.87/117 million yuan respectively, 39.41%/-17.08%/+1.13%, 55.17%/+81.28%/+33.60%, and 2020Q3's sales market share was 42%. It is estimated that hospital terminal passenger traffic and demand for patients with under-eye diseases have basically returned to normal, and Comperside will gradually return to a state of rapid growth.
Combusip's overseas clinical trials are progressing smoothly, and the follow-up R&D team is rich: Combusip's international multi-center phase III clinical trial completed a 36-week core treatment period for all subjects in September 2020. Safety observation, data collation, data analysis, etc. are being carried out. It is expected that clinical data will be disclosed and marketing applications submitted in the near future. Other R&D projects are also progressing in an orderly manner. In terms of biopharmaceuticals, the fundus disease antibody KH621 has entered the process development stage, the fundus disease bifunctional antibody KH634 has basically completed development at the discovery stage, the tumor antibody KH801 is progressing smoothly during the discovery stage, KH631, the product that delivers the Combusip gene through AAV, is expected to submit clinical applications in 2022, and the new DME drug KH805 and the new type 2 diabetes drug KH806 are all in the preclinical research stage. In terms of small molecule innovative drugs, KH617, which treats glioma, plans to submit clinical applications in China and the US simultaneously in 2021. KH615, a new target drug for ophthalmology, and KH607, which treats depression, are both in the preclinical stage.
Profit forecasts, valuations and ratings: Comperside is a scarce innovative drug with global competitiveness. Overseas markets are gradually expanding, and the company has broad prospects. The company's 2020 performance exceeded our previous expectations. Referring to the performance report, the net profit forecast for 2020 was raised to 839 million yuan, maintaining the net profit forecast for 2021-2022 at 1,030/1,301 billion yuan. At the same time, considering changes in share capital caused by convertible debt-for-equity swaps and the cancellation of shares repurchased shares, the EPS forecast for the year 2020-2022 was adjusted to 0.91/1.12/1.42 yuan. The net profit of Guimo increased 16.79%/22.78%/26.33% year-on-year. The current price of PE corresponding to the current price was 45/ 37/29 times, maintaining the “buy” rating.
Risk warning: continuing epidemic; risk of litigation; release of biopharmaceuticals falling short of expectations; research and development risk.
