20231024-招银国际-石药集团-01093.HK-Innovative_platforms_to_drive_future_growth_27页_2mb

CSPC Pharmaceutical Summary

Executive Summary

CSPC Pharmaceutical (1093 HK) is recommended "BUY" with a target price of HK$8.16. The analyst views the company positively due to stable legacy product sales and fast ramp-up of new products, leading to revenue and profit growth starting from FY24E. Key risks include competition from generics and pricing pressures.

Legacy Product Sales

Legacy products are expected to remain largely stable over the next two years. NBP (enbiphasic acid) maintains a strong market position due to exclusivity and brand strength, despite competitive threats. Other products like Duomeisu, Jinyouli, and Keaili face price pressures from centralized procurement and generic competition, but sales are anticipated to hold steady.

New Product Developments

New products are set to drive rapid growth. Duoenda (mitoxantrone hydrochloride liposome) is expected to enter NRDL in 2023 and is targeted for sales of around RMB200mn by FY23E. Anfulike is expanding to offset traditional amphotericin B declines, with potential for RMB300mn in FY23E. Mingfule has secured regulatory submissions and shows strong synergy with NBP, aiming for RMB300mn in FY23E. These products are part of a broad pipeline.

R&D Platforms

CSPC invests in innovative platforms like nano-formulation, mRNA vaccines, and ADC technology. The nano-formulation platform supports multiple approved blockbusters, while mRNA vaccines (e.g., SYS6006) and ADC programs (e.g., DP303c) show global potential. The company has over 110 drug development projects, with DCF projections aiming for steady revenue generation.

Financial Analysis and Valuation

Financial forecasts project revenue growth of 2.5% in 2023E, accelerating to 10.1% in 2024E, with attributable net profit up 2.5% in 2023E and 10.3% in 2024E. The DCF-based valuation targets HK$8.16, valuing the stock at 46.2% upside from current levels. R&D expenses reached RMB4.0bn in FY22, indicating sustained investment.

Conclusion

CSPC Pharmaceutical is positioned for sustained growth through a balance of stable legacy sales and emerging new products. The company's R&D efforts and financial resilience support the BUY recommendation, despite regulatory and competitive challenges.