Hite Biology was founded in 1992, the main business is mainly biological products, injection mouse nerve growth factor (Jin Lujie) as the company's main source of income. In recent years, Jin Lujie is under relative pressure due to the influence of health insurance control fees and industry policy factors. In order to get rid of the dependence on single product income, the company has gradually diversified its business since 2015: in 2015, it invested in Beijing Shadong and formally entered the field of innovative cancer drug research and development; in September of the same year, it acquired 100% stake in Tianjin Hankang Pharmaceutical and officially entered the field of Gaojing demeanor CRO&CMO business. At present, the important antineoplastic drug CPT project has entered the clinical finalization of III phase, and the market is waiting for the blind results. It is optimistic about the business strategy transformation of the company under the cooperation of innovative drugs, CRO and API business.
Main points of investment:
Jin Lujie contributes the main profits, which is greatly influenced by the policy at present.
Before 2018, Jin Lujie is the company's main source of income, the company has a high business dependence on this single product. In recent years, Jin Lujie is under relative pressure under the influence of policy factors such as medical insurance fees, key drug use monitoring and health insurance adjustment. However, with the removal of health insurance by Jin Lujie, the most severe impact period of the policy has passed. Although there is no good market growth in the future, it is still a kind of cash flow that can contribute.
Active layout of CRO and API business will have significant business synergy in the future.
In 2018, the company acquired Tianjin Hankang and officially entered the field of Gaojing CRO business. The proportion of Hankang CRO business in the company's overall business will continue to increase in the future. At the same time, the company's layout of API business in Jingmen, combined with Hankang's CMC and CMO business advantages, the future business synergy effect is significant.
Investing in Beijing Shadong, the III exposure of the CPT project is worth looking forward to.
Beijing Sadong's CPT project is a major national new drug creation project, and the core indication is for recurrent and refractory multiple myeloma. It was officially launched in 2001, and the third phase of the clinical trial began in 2015, and the last case was completed in July 2019. It is currently in the final stage. The results of the I/II phase clinical study also showed good safety and therapeutic effectiveness. We are optimistic about the results of clinical blindness detection in III phase, and are positive about the future commercial prospect of CPT project.
Profit forecast and investment advice: the EPS in 2019, 2020 and 2021 is expected to be 0.67,1.13,1.29 respectively; corresponding to the current share price PE is 45 times, 27 times, 23 times; the first time to cover the recommendation, given the "overweight" rating.
Risk factors: the risk of production and operation being continuously affected by the epidemic, and the risk of failure in new drug research and development.