Key points of investment:
Incident: Minhai Biotech, a wholly-owned subsidiary of Kangtai Biotech, held a signing ceremony for the “Strategic Cooperation Memorandum” with the Beijing Daxing District People's Government and AstraZeneca on March 25, 2024. Jointly promote the localization and market access of AstraZeneca and Minhai Biotech's innovative product pipeline in China, and help the cooperation and development of innovative Chinese vaccine products at home and abroad.
The international business continues to expand. Since 2022, the company has successively signed cooperation agreements with partners in more than 10 countries, including Indonesia, Pakistan, Saudi Arabia, Bangladesh, Egypt, and Bahrain, to continue expanding the overseas layout of vaccine varieties such as 13-valent pneumococcal polysaccharide conjugate vaccine, 23-valent pneumococcal polysaccharide vaccine, live attenuated chickenpox vaccine, and quadruple vaccine. In October 2023, the company's 13-valent pneumococcal vaccine was approved for marketing in Indonesia. Currently, the company has signed a “sales contract” for the 13-valent pneumococcal polysaccharide conjugate vaccine with an Indonesian partner. The development of overseas markets is expected to bring new growth in the company's performance.
The research pipeline is about to enter the harvest period. The chickenpox vaccine is in the production stage. The polio vaccine has obtained a summary report of phase III clinical trials. The quadrivalent influenza vaccine and the oral pentavalent rotational vaccine have begun phase I clinical trials, and the measles vaccine combined vaccine and tetanus vaccine have been approved for clinical trials. In addition, the company has developed quadrivalent hand, foot and mouth disease vaccines, measles chickenpox vaccine, 20-valent pneumonia conjugate vaccine, recombinant shingles vaccine, RSV vaccine, etc. In the future, as the company's major products are approved and listed one after another, it will provide an important guarantee for the company's continued development.
Profit forecasting and investment ratings. Referring to the company's performance forecast and equity incentives, we lowered our previous profit forecast. The company's net profit for 2023-2025 is expected to be RMB 9.01/10.45/RMB 1,312 million (previously forecast was RMB 1,047/14.45/RMB 1,758 million), and the corresponding EPS was RMB 0.81/0.94/1.17, respectively. Referring to the valuation of domestic self-developed vaccine listed companies (2024E Baike Biotech 26 times PE, Olin Biotech 32 times PE), the company's 2024 valuation was lower than that of comparable companies. At the same time, considering that the company's major product, the human diploid rabies vaccine, was launched and sold this year, contributing to increased performance, so it maintained a “buy” rating.
Risk warning: Increased market competition and product sales falling short of expectations; risk of iterative technology upgrades; risk of vicious events in the vaccine industry.