20220323-招银国际-石药集团-01093.HK-Promising_early_data_of_COVID-19_mRNA_vaccine_4页_914kb

CSPC Pharmaceutical (1093 HK) Company Update Summary

Core Content Overview

CSPC Pharmaceutical (1093 HK) is a major player in the China healthcare sector, with a strong focus on pharmaceutical innovation and R&D. The company has demonstrated consistent revenue and profit growth, with notable progress in its innovative drug pipelines and a promising early-stage mRNA vaccine candidate, SYS6006, for the treatment of COVID-19.

Financial Performance (FY20A - FY24E)

Revenue

• FY20A: RMB24,942 million
• FY21A: RMB27,867 million (+12% YoY)
• FY22E: RMB30,735 million (+10% YoY)
• FY23E: RMB33,899 million (+10% YoY)
• FY24E: RMB37,175 million (+10% YoY)

Net Profit

• FY20A: RMB5,160 million
• FY21A: RMB5,605 million (+9% YoY)
• FY22E: RMB6,334 million (+13% YoY)
• FY23E: RMB7,328 million (+16% YoY)
• FY24E: RMB8,412 million (+15% YoY)

EPS (RMB)

• FY20A: 0.43
• FY21A: 0.47
• FY22E: 0.53
• FY23E: 0.61
• FY24E: 0.70

P/E Ratio

• FY20A: 16.5
• FY21A: 15.2
• FY22E: 13.5
• FY23E: 11.6
• FY24E: 10.1

P/B Ratio

• FY20A: 3.7
• FY21A: 3.2
• FY22E: 2.7
• FY23E: 2.3
• FY24E: 2.0

Key Developments

Innovative Drug Pipeline

• Anfulike (Amphotericin B Cholesteryl Sulfate Complex for Injection) launched in March 2021 and included in NRDL in January 2022.
• Duoenda (mitoxantrone hydrochloride liposome injection) and COPIKTRA (duvelisib capsule) received registration approvals in 2021.
• Mingfule (rhTNK-tPA), a 3rd-generation thrombolytic drug, was acquired through a 51% stake in Recomgen Biotech in February 2022, expected to enhance sales channel synergies with NBP.

mRNA Vaccine Candidate (SYS6006)

• Early data shows strong immunogenicity and safety profile.
• After a 14-day boost, the binding antibody titer was above $10^5$, over 10x higher than inactive vaccines.
• Neutralizing activity against the Omicron variant was reduced by only 50% compared to Delta variant.
• CSPC has prepared approximately 500 million doses of manufacturing capacity for mRNA vaccines.

Earnings Revisions and Valuation

Earnings Revisions

• Revenue revised up by 1.8% for FY22E, 2.7% for FY23E.
• Net profit revised slightly upward, with a marginal increase in FY22E and a notable rise in FY23E.
• EPS revised slightly upward for FY22E and increased for FY23E.

DCF Valuation

• Target Price: HK$13.20 (revised up from HK$12.33)
• WACC: 11.78%
• Terminal Growth Rate: 3.0%
• DCF-based TP: 20x FY22E PE
• Equity Value: HK$129,177 million
• DCF per share: HK$13.20

Shareholding and Performance

Shareholding Structure

• Management: 23.60%
• UBS Group: 7.56%
• Common Success Intl: 6.09%
• Free float: 62.75%

Share Performance

• 1-month: -7.5% (Absolute), +5.3% (Relative)
• 3-months: +9.7% (Absolute), +18.7% (Relative)
• 6-months: -5.8% (Absolute), +7.5% (Relative)

Market Cap

• HK$103,938 million

Key Ratios

Profit & Loss Ratios

• Gross Margin: 76.00%
• EBITDA Margin: 27.8% (FY22E), 29.8% (FY24E)
• Net Margin: 20.6% (FY22E), 22.6% (FY24E)
• Effective Tax Rate: 17.0%

Balance Sheet Ratios

• Current Ratio: 2.5 (FY20A), 4.1 (FY24E)
• ROE: 23.1% (FY20A), 20.3% (FY24E)
• ROA: 17.2% (FY20A), 16.0% (FY24E)

Analyst Recommendations

• Rating: BUY
• Target Price: HK$13.20 (+51.55% upside from current price of HK$8.71)
• Reasoning: The company's strong R&D investment, promising pipeline, and potential for growth in the innovative drug space support the BUY rating.

Risk and Disclaimer

• This report is for informational purposes only and should not be construed as investment advice.
• The information is subject to change without notice.
• CMBIGM is not liable for any losses or damages arising from reliance on this report.
• The report is not intended for distribution to individuals outside of the specified categories in the UK, US, and Singapore.

Conclusion

CSPC Pharmaceutical is positioned as a strong player in the China healthcare sector, with a solid financial performance and a growing pipeline of innovative drug candidates. The early data on its mRNA vaccine candidate, SYS6006, is encouraging, and the company continues to invest heavily in R&D. The BUY rating reflects the potential for significant returns, supported by the revised DCF valuation and strong earnings outlook. Investors should be aware of the risks and consult with a professional financial advisor before making investment decisions.