Steady growth is imminent, new products blossom and continue to grow, maintaining a “buy” rating
On June 24, 2024, the company issued the “Notice on the Application for Issuance of Shares to Specific Targets Approved by the Shanghai Stock Exchange”. The announcement shows that the Shanghai Stock Exchange has reviewed and approved the company's fixed increase application and can only be implemented after registration is approved by the Securities Regulatory Commission. The company raised no more than 289 million yuan in capital from the majority shareholders in this round. All raised was used to supplement working capital to meet the company's daily operating needs and further enhance the company's ability to develop and serve customers. The fixed increase fully demonstrates the majority shareholders' operating confidence. As the 2024H2 pig cycle reverses the rise in pig prices, the company's performance is expected to grow further. We keep the original profit forecast unchanged. The company's net profit for 2024-2026 is estimated to be 3.9 2/5.10/607 million yuan, the corresponding EPS is 0.35/0.46/0.54 yuan, respectively, and the PE corresponding to the current stock price is 20.8/16.0/13.4 times. The company is set to expand and launch soon, new products are blooming more, and maintaining a “buy” rating.
After the implementation of the fixed increase, Zhang Chongyu's father and daughter will become the actual controllers of the company, demonstrating the majority shareholders' operating confidence. The company's shares were scattered before the current round of fixed increases, and there were no controlling shareholders or actual controllers. This round of fixed increases was carried out for BioHoldings, Zhang Chongyu, and Zhang Jing's father and daughter. After the increase was completed, the shares of Biotech Holdings (Zhang Jing and Zhang Chongyu held 51.93% and 39.00%, respectively), Zhang Chongyu and Zhang Jing increased their shares to 12.86%, 2.23%, and 0.77% respectively. Zhang Chongyu and Zhang Jing's father and daughter will collectively control 15.86% of the company's shares and become actual controllers of the company, demonstrating the majority shareholders' operating confidence and financial support for the company.
The company's new products are blooming, and the performance growth potential is strong
The company's new products have blossomed and are now in the cash out period, and many high-quality large single products, such as the Vaccine Duo, Vaccine Vaccine, and Round Branch Round Ring Vaccine, have continued to be released. In terms of new products, since 2024, the company's swine fever genetically-engineered subunit vaccine, bovine nodular dermatosis inactivated vaccine, and cat triple vaccine have been approved for production. In addition, the company is still developing many new products, and the growth potential is strong. In terms of the non-plague vaccine, the company's non-plague subunit and mRNA vaccine are progressing in parallel, and emergency evaluation of the non-plague subunit vaccine is currently progressing in an orderly manner. The company has strong R&D capabilities, continues to gain strength by focusing on non-export strategies, and has strong growth potential.
Risk warning: The rise in pig prices fell short of expectations, the development of non-plague vaccines fell short of expectations, and market competition intensified.