The company released its annual report for 2020: operating income was 588 million yuan, up 546% from the same period last year; net profit was-994 million, down 13.5% from the same period last year; and R & D expenditure was 1.711 billion, up 21.6% from the same period last year.
Rapid expansion of existing products and rich reserves of R & D pipelines: at present, the company's three biosimilar drugs Hanlikang, Hanquyou and Handayuan have been successfully listed, Hanlikang rheumatoid arthritis indications and Hanbeitai two products NDA have been accepted, with 10 clinical products under development and 8 combination therapies. Under the guidance of the company's strategy, the company has steadily promoted the comprehensive and rapid transformation from bioanalogs to innovative drugs. Among them, innovative drugs are led by PD-1, covering a number of innovative targets.
Internal and external repair, Becton Dickinson & Co cooperation to improve innovation efficiency: in addition to relying on its own innovation and R & D capabilities, the company will vigorously promote external introduction and cooperation, and accelerate the realization of diversification, differentiation and efficient innovation. On March 29th, the company reached an exclusive license with Runxin Bio for RX208, a small molecule inhibitor targeting BRAF protein V600E mutation.
"Biosphere" empowers, commercial operation deepens product value: the company's product positioning is clear, and the commercial operation team is growing day by day. The company's internal business operation team has increased from 53 in 2019 to 395. External cooperation with Shanghai Fosun Pharmaceutical marketing team and overseas Accord has been carried out to deepen the value of the company's products and accelerate the pace of comprehensive commercialization with the help of its strong commercialization ability and good customer base.
The construction of three major bases solves the capacity bottleneck in order to achieve economies of scale under "Hanlin quality": the company continues to promote the construction of three major production bases, of which Xuhui base has been commercialized and was certified by EU GMP last year, increasing its production capacity to 20,000 litres; Songjiang base has a planned production capacity of 24,000 litres, and Q2 has started trial production in 2020. The planned production capacity of the second Songjiang base is at least 30,000 to 40,000 liters, which is expected to be completed and put into trial production in 2021. It is expected that the overall production capacity will increase to about 50,000 litres next year and to 80,000 litres in a year, which will provide strong production capacity for commercialization.
Profit forecast and valuation: we maintain projected income of 15.97,29.58 and 5.359 billion yuan from 2021 to 2023, an increase of 171.86%, 85.20% and 81.14% over the same period last year; and projected net profit of-7.63,5.00 and 366 million yuan. Maintain the target price of HK $68.50 and maintain the "buy" rating.
Risk tips: the progress of research and development and sales of new products are lower than expected, market competition intensifies, procurement progress of biological similar drugs exceeds expectations, and the risk of personnel change.