Incident: The company released its 2020 annual report, achieving operating income of 2,939 million yuan, +162.13% year on year; net profit of returned mother of 1,003 million yuan, +606.60% year on year; net profit of non-return mother of 715 million yuan, +485.44% year on year; net operating cash flow of 114 million yuan, +84.13% year on year; EPS 0.65 yuan. The performance is in line with market expectations.
Comment:
The 13-valent pneumonia vaccine drove strong performance growth, and the account period dragged down cash flow: the company's quarterly revenue from 2020 Q1 to Q4 was 1.12/4.61/9.93/1372 billion yuan, respectively, +36.34%/+234.49%/+323.88%; Guimo's net profit -0.18/0.80/3.74/568 million yuan compared to -146.78%/+72.31%/+955.45%/+2527.56%; after deducting non-homo net profit -0.20/ 0.77/3.75/283 million yuan, compared to -153.41%/+76.08%/+1032.98%/+3465.90%. Performance accelerated quarterly growth, mainly due to the rapid release of the 13-valent pneumonia conjugate vaccine after it was marketed. In 2020, 4,4651 million doses were issued, accounting for 41.01% of the total batch issued, with sales volume of 2,8636 million doses, achieving sales revenue of 1,658 million yuan; the 23-valent pneumonia polysaccharide vaccine was distributed in batches of 5.7452 million doses, with sales volume of 3.7861 million doses, achieving sales revenue of 688 million yuan, +32.15% over the same period last year. Net operating cash flow in 2020 was lower than net profit. The main reason was that the 13-valent pneumonia conjugate vaccine increased operating income, and the credit period and payment cycle for domestic sales of non-immunization planning vaccines were long. The product went on sale in April 2020. Q3-Q4 Sales of this product and other vaccines increased dramatically, leading to an increase of 1,491 billion yuan in accounts receivable at the end of 2020 compared to the beginning of the year.
New product development is progressing smoothly, and there is a steady stream of large varieties: on January 10, 2020, the 13-valent pneumonia conjugate vaccine obtained the “Drug Registration Approval”, the first batch of products was distributed in batches on March 30, and the first dose was obtained on April 22; the subsidiary Shanghai Zerun bivalent HPV vaccine received the “Notice of Drug Evaluation Center on Initiating the Recombinant Human Papillomavirus Double Valent (16/18) Vaccine (Yeast) Registration Site Verification” on December 31, which is expected to be approved for listing soon, becoming a new profit growth point for the company; the nine-valent HPV vaccine Phase I clinical trial The end is nearing; the novel coronavirus mRNA vaccine developed in collaboration with partners has advanced to phase II clinical trials.
Industrialization construction continues to advance, laying a solid foundation for future commercialization: the Watson Biotechnology Innovation Center project continues to advance; the industrial production workshop for the HPV vaccine industrialization project has been completed, laying a solid hardware foundation for the industrialization of the company's HPV vaccine; the International Vaccine Preparation Center construction project completed system verification in December 2020, and equipment installation and commissioning work is being carried out. After completion, it will undertake the production task of exporting the company's influenza vaccine and pneumonia series vaccine products to the international market.
Profit forecast, valuation and rating: Considering that the company's vaccine sales volume and R&D progress are faster than our previous expectations, the 2021-2022 net profit forecast for 2021-2022 was slightly raised to 1,552/2,065 million yuan (the original forecast was 1,509/2,026 billion yuan), and the new forecast was added that the net profit of the mother in 2023 was 2,651 million yuan, +54.67%/33.09%/28.37%. Based on the latest share capital, the corresponding EPS was 0.99/1.32/1.70 yuan, respectively, and the current price of PE was 44/33/ 26 times, maintaining the “buy” rating.
Risk warning: The approval progress of new varieties or sales are lower than expected; the risk of industry regulatory policy adjustments.