20220829-招银国际-瑞科生物-B-02179.HK-Smooth_progress_of_core_pipeline_products_5页_300kb

Recbio (2179 HK) Summary

Core Pipeline Progress

Recbio reported a net loss of RMB350 million in 1H22, compared to RMB330 million in 1H21. The increase in net loss is primarily attributed to a significant rise in R&D expenses, which increased by 73% YoY to RMB354 million. This was driven by clinical trial expenses for the Ph III trial of REC603 and Ph II/III trials of ReCOV.

• REC603: A leading 9-valent HPV vaccine candidate that is in Ph III trial in females aged 9–45. The trial has the largest sample size (16,050 subjects) among other 9-valent HPV vaccine candidates in China and is conducted at sites with higher HPV infection rates. Recbio expects to submit a BLA to the NMPA in 2025E.
• ReCOV: A clinical-stage COVID-19 vaccine candidate using an NTD-RBD-foldon trimer as antigen, offering better cross-protection against emerging variants, including Omicron. Recbio has completed Ph I trials in New Zealand, and Ph II/III trials in the Philippines and UAE, respectively. It received approval in Aug 2022 to conduct another Ph II trial in the Philippines, evaluating ReCOV as a booster dose against two doses of inactive vaccines.
• R520A: An Omicron-specific mRNA vaccine candidate, included in an IIT study (ChiCTR2200062207) by China CDC to assess 14 new variant-targeted vaccines.

Investment Recommendation

• Maintain BUY: The target price is HK$38.77, with a previous target price of HK$38.79. The upside potential is 73.9% from the current price of HK$22.30.

Financial Overview

Earnings Summary (YE 31 Dec)

Valuation (DCF)

• Equity Value (HK$ mn): HK$483
• DCF per share (HK$): HK$38.77
• WACC: 12.5%
• Terminal growth rate: 2.0%

Share Performance

Shareholding Structure

• Management: 17.30%
• Legend Capital: 9.97%

Growth and Profitability

Financial Highlights

• Net cash from operations is expected to remain negative in 2022E and 2023E, indicating ongoing investment in R&D and clinical trials.
• Capital expenditure (CAPEX) is expected to remain constant at RMB300 million from 2022E to 2024E.
• Current ratio is projected to rise to 32.7x in 2022E, suggesting improved liquidity.
• Receivable turnover days and inventory turnover days remain stable at 150.0 and 300.0 respectively.

Market and Industry Outlook

• CMBIGM Ratings:

  • BUY: Stock with potential return of over 15% over next 12 months.
  • OUTPERFORM: Industry expected to outperform the relevant broad market benchmark over next 12 months.

• Market-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark over next 12 months.

Disclaimer

• The report contains forward-looking statements and is based on publicly available information.
• CMBIGM does not provide individually tailored investment advice and recommends consulting a professional financial advisor.
• There may be conflicts of interest due to potential investment banking relationships.
• The report is not an offer or solicitation to buy or sell any security and is intended for specific investors.