华海药业(600521):守得云开见月明 医药先进制造龙头再起航

Huahai Pharmaceutical Co., Ltd. (600521): Yueming Pharmaceutical Advanced Manufacturing Leader set sail again

華創證券 ·  05/22/2022  · Researches

The lifting of the US ban and the marginal improvement of price, exchange rate, cost and other factors are expected to start a new round of rapid growth cycle. In the past 20 years, the internationalization of quality R & D system and pharmaceutical manufacturing has always been the core of Huahai accumulation, and has a relatively strong international competitiveness. The impurities incident in 2018 and the ban on Europe and the United States caused periodic damage to the company's growth trend. But after three years of hardship, the FDA ban was successfully lifted in November last year. Standing at the current point of view, the company's three major business sectors once again show a clear upward trend, and obvious coordination, is expected to start a new round of rapid growth.

Preparation export: with the lifting of the ban on a new high, and is expected to form a comprehensive pull on the operational efficiency of the company. In the past three years, although the ban on FDA in southern Sichuan base has caused great constraints on the preparation export business, the company's unrestricted varieties still maintain a good volume trend, and the core competitiveness is still stable. With the lifting of the ban, the company's 29 stock-limited varieties and corresponding preparations ushered in the lifting of the ban, and as many as 13 new varieties were approved in the past six months.

With the support of a large number of incremental varieties, we expect the US preparation business to reach a new high in the short term. While directly bringing profit increment, it will also significantly boost the API and the overall manufacturing efficiency of the company.

Characteristic API: the stock variety resumes the superimposed increment variety release, which is expected to return to the fast track of growth. In 2021, the company's API business was affected by price, exchange rate, cost and other factors, and the gross profit margin decreased significantly. However, since the beginning of this year, various factors have shown a positive trend, combined with the lifting of the ban in the United States, the profitability of the company's API business is expected to recover significantly. From the medium-and long-term perspective, the company's existing core varieties are mostly concentrated in chronic diseases, Shaban, Liting, Liejing and other varieties due in the next round have also had a rich layout, and the integration of domestic and American preparations to the API is becoming more and more obvious. Pfizer Inc's new crown drug MPP is likely to bring additional contributions, and we believe that the company's API is still expected to maintain sustained and rapid growth.

Domestic preparation: with the help of strong manufacturing capacity, the collection benefit logic is good and is expected to continue. Since 2018, the procurement of generic drugs has become more and more normal. Although the price reduction exceeded the market's initial expectations, we estimate that the growth of the company's domestic preparations has accelerated to about 40% of the platform since 2020, and the benefit is still very significant. Considering that the company's new domestic approved varieties are expected to accelerate from about 10 to 20 every year in the future, and the fourth and fifth batch collection begins to reduce prices gradually, we believe that the rapid growth of the company's domestic preparation business is also expected to continue.

Follow-up layout: biological generic drugs, innovative drugs and other orderly progress. In recent years, the company has also begun to steadily promote the layout of follow-up business, such as biomimetic pharmaceuticals, biological innovative drugs, and small molecular drugs, in order to open up more room for growth in the future. At present, the company has more than 15 product lines under research in the field of biopharmaceuticals, covering oncology, autoimmune diseases, ophthalmic diseases and other fields.

Profit forecast, valuation and investment rating. We estimate that the company's net profit from 2022 to 2024 will be 9.20,12.11 and 1.578 billion yuan respectively, up 88.8%, 31.6% and 30.2% respectively over the same period last year. The current stock price corresponds to the PE of 33, 25 and 20 times from 2022 to 2024, respectively. Taking into account the company's clear prospects for rapid growth, as well as the company's leading position in the pharmaceutical advanced manufacturing sector, we believe that a certain valuation premium should be given appropriately, with reference to the comparable company's valuation, 40 times PE in 2023, corresponding to the target price of 32.4 yuan. Cover for the first time, giving a "push" rating.

Risk tips: 1, the company's US preparation business recovery is not up to expectations; 2, the company's domestic preparation approval is not up to expectations; 3, the domestic preparation business competition is intensified; 4, the release of new varieties of API is not up to expectations; 5, the competition in the API industry is intensified.

This page is machine-translated. Futubull tries to improve but do not guarantee the accuracy and reliability of the translation, and will not be liable for any loss or damage caused by any inaccuracy or omission of the translation.

Risk disclosure: The above content only represents the opinion of the authors or guests, and does not represent any positions of Futu or constitute any investment advice on the part of Futu. Before making any investment decision, investors should consider the risk factors related to investment products based on their own circumstances and consult professional investment advisers where necessary. Futu makes every effort to verify the authenticity, accuracy, and originality of the above content, but does not make any guarantees or promises.

    Write first comment