Report guide
The company's profit in 2020 exceeded expectations and is optimistic that profitability will continue to improve in 2021. Considering the low base in 2020 and the imminent blindness of Compaq's overseas III clinical data, 2021 is expected to usher in an upward inflection point in performance and valuation.
Main points of investment
The profit in 2020 exceeded expectations.
KuaiBao: the company's 2020 income and return net profit grew by 32.95 (YOY1.17%) and 839 million (YOY 16.79%) respectively, of which 2020Q4 realized income and home net profit of 9.47% (YOY 11.73%) and 260 million (YOY 56.48%), and the profit side exceeded our previous expectations.
From the perspective of business split: 1) We expect Compaq sales to decline slightly in 2020 compared with 2019 (according to our forecast, it may decline by-3.4% year-on-year). According to the sales data of the sample hospitals, the sales of CompaSIP fell by-6.87% in 2020. Considering the deviation between the data of the sample hospitals and the actual terminal sales, we expect the revenue of CompaSIP to decline 3.4% in 2020 compared with the same period last year. After the introduction of DME and pmCNV indications into health insurance in 2020, the price fell by 24.36%. According to the revenue-side forecast data, we expect Compaq's overall sales to grow by 25% and 30% year-on-year in 2020. As mentioned in our three quarterly reports, data from the Compaq sample hospital from February to September 2020 showed that Compaq showed a monthly trend after the outbreak was alleviated. According to the current sample hospital data, 2020Q4 Compaq revenue slowed to around 4% year-on-year. However, considering that Compaximab, Reizumab and Abrexil all showed a good dose trend after entering the health insurance, we still believe that the use of anti-VEGF inhibitors has reached an upward acceleration stage in fundus disease, maintaining the expectation of sustained dose of Combuxil in 2021. 2) with reference to the results of the three quarters of 2020, we expect the traditional Chinese medicine and chemical medicine sectors to achieve year-on-year growth of 2.1% and 4.8% respectively in 2020.
2021: optimistic about continued improvement in profitability
Profitability increased significantly in 2020, and it is optimistic that the expense rate will continue to improve in 2021. The net interest rate reached an all-time high of 25.46% in 2020 (up 3.41pct from 2019), of which 2020Q4 net interest rate was 27.46% (11.89pct higher than 2019Q4). We expect that it may be related to the significant improvement in the company's sales expense rate (as mentioned in the performance KuaiBao, the company may have reduced some of the sales expenses by constantly optimizing the way of academic promotion). On the other hand, the company is also constantly improving operational efficiency and strengthening cost control. Therefore, we expect the company's 2020 Q4 sales expense rate and management expense rate to decline most significantly.
In view of the fact that the company continues to optimize academic promotion methods and improve management efficiency, we expect that the overall expense rate will continue to improve in 2021, and we are optimistic that the continued improvement in operating efficiency in 2021 will lead to a further improvement in profitability.
2021: expected to see an upward inflection point in performance and valuation
Performance: expected to accelerate in 2021. In view of the low revenue base of Compaq due to the epidemic in 2020, we expect faster growth on the revenue side in 2021, so we are optimistic that the revenue side of Compaq will accelerate in 2021, which will lead to an upward acceleration in the company's overall performance.
Valuation: overseas III clinical data with positive results are expected to open the ceiling of valuation. We expect the overseas phase III clinical mid-term data of Combexil wAMD indications to be unblinded in 2020Q1. According to the company announcement, Compaq overseas Phase III Clinic has completed the 36-week primary end-point visit of all subjects at the end of September, and we expect 2021Q1 to release overseas multicenter phase III clinical mid-term data, which is expected to verify the head-to-head non-inferior efficacy of Abexil. We believe that if the overseas clinical data of wAMD indications can show non-inferior data with abacep under lower injection frequency (Corbusip 3+Q3M regimen vs abacep 3+Q2M regimen), it will not only be beneficial to overseas market volume, but will in turn have a positive impact on the education of domestic doctors and patients, and is expected to accelerate the further expansion of Compastats domestic market. Therefore, we expect positive clinical data from the III phase of the head-to-head match between Compex and Abercrombie, which is expected to further open the valuation ceiling of the company.
Profit forecast and valuation
Considering that the company's 2020 net profit exceeded our previous expectations, we raised our profit forecast.
We expect the company's EPS to be 0.96,1.18,1.40 yuan per share from 2020 to 2022, and the closing price on February 26, 2021 corresponds to 40 times PE in 2020 (32 times PE in 2021), maintaining a "buy" rating.
Risk hint
Policy risk, market competition risk, less-than-expected clinical progress of innovative drugs or clinical development failure risk, product sales risk.
