Cansino announced that the company signed a “Product Supply Cooperation Framework Agreement” with AstraZeneca on August 7, 2023. The company will provide AstraZeneca with contract development and production services to support its mRNA vaccine project, produce and supply specific products, and provide related specific services. The parties fulfill the contract as follows: the company shall provide supply services for each type of product in accordance with (1) the framework agreement; (2) each applicable product supply plan; (3) the purchase order under each applicable product supply plan; and (4) the quality assurance agreement. AstraZeneca shall pay the price in accordance with the terms of the framework agreement and each product supply plan and shall be solely responsible for the safety assessment of such products at its own expense. The term of this framework agreement begins on August 7, 2023 until (1) the day corresponding to the full tenth anniversary or (2) the expiration date of the product supply plan in effect at that time.

Key points of investment

R&D technology innovation is strong, and mRNA technology has been recognized and cooperated by internationally renowned pharmaceutical companies

The company is an innovative vaccine enterprise with strong independent research and development capabilities. The mRNA technology platform established by the company has independently designed and developed sequence optimization software, which can obtain key sites that affect stability and optimal sequences that effectively increase antigen expression. The CMC (Chemistry, Manufacturing and Controls) process is simple, which can shorten product development time and quickly industrialize scientific research results. The company has initially completed the first phase of the mRNA vaccine production base project to support the development and commercialization of products based on the mRNA platform. The production capacity of mRNA is plentiful, with a planned production capacity of 100 million doses in the first phase. This signed cooperation with AstraZeneca is an important sign that the company's technical capabilities have been recognized by international pharmaceutical companies. It affirms the company's R&D strength and competitive advantage in mRNA technology platforms, is conducive to the further expansion of the company's mRNA production platform, and meets the needs of the company's future development.

The MCV4, which has been launched, is an exclusive blockbuster product in the country. Commercialization is progressing steadily, and future sales can be expected

The vaccines that the company has marketed include the COVID-19 vaccine series (injectable and inhaled) and the influenza vaccine series (MCV2 and MCV4). Among them, the MCV4 vaccine is the first quadrivalent conjugate influenza vaccine in China and has a first-mover advantage. The commercialization process of MCV4 is progressing steadily. By the end of June 2023, MCV4 had completed all provincial admissions, with the exception of Tibet. MCV4 can be expected to expand in the future and is expected to become an important performance growth point for the company.

The pipeline layout for non-COVID-19 vaccines is rich. The research project has been fully launched in 2023. The PCV13i vaccine has already carried out phase III clinical trials, and pre-NDA application work is scheduled to begin before the end of this year; DTCP for the infant group DPT vaccine is undergoing preparations before the start of phase III clinical trials. In addition, there have been recent developments in the company's four products. In June 2023, the adsorbed acellular 100 (component) white break combination vaccine (for people aged 6 and above) was approved for drug clinical trials. It is expected that phase I clinical trials will begin this year, phase III clinical trials will begin next year; MCV4 was approved for expanded clinical trials among people aged 7-59; in July 2023, the recombinant herpes zoster vaccine (adenovirus vector) was approved for clinical trials in Canada; the company's adsorbed tetanus vaccine CS-2047 obtained drug clinical trial approval.

Profit forecasting

Recommended logic: (1) The company has strong innovation capabilities, and the focus of R&D after the COVID-19 pandemic has shifted from COVID-19 vaccines to non-COVID-19 vaccines; (2) the company has gradually moved from an R&D enterprise to industrialization and commercialization; (3) the company continues to strengthen foreign cooperation and has the potential to become an international vaccine company.

Due to the uncertainty of the COVID-19 pandemic and virus mutations, the global epidemic is slowing down, the demand side of the COVID-19 vaccine has changed, and the company's COVID-19 vaccine revenue has declined sharply. In the future, non-COVID-19 vaccine products, such as the quadrivalent brain conjugate vaccine and the 13-valent pneumonia vaccine, will mainly contribute to performance. Therefore, we adjusted our previous profit forecast. The specific adjustments were as follows: 2023E-2025E's annual revenue was 673, 10.10, and 1,669 million yuan respectively; net profit of the return mother was -5.75, -1.89, and 0.80 million yuan respectively; EPS was -2.32, -0.76, and 0.32 yuan respectively. The current stock price corresponds to PE of -39.8, -121.1, and 285.0 times, respectively, giving a “buy” investment rating.

Risk warning

Risks such as vaccine research and development falling short of expectations, sales promotion falling short of expectations, industry policy impacts, and impairment of COVID-19 assets.