20230323-招银国际-石药集团-01093.HK-mRNA_platform_verified_with_product_approval_5页_1mb

CSPC Pharmaceutical (1093 HK) Summary

Core Content and Key Highlights

CSPC Pharmaceutical Group (1093 HK) reported FY22 revenue of RMB30.94bn (+11.0% YoY) and attributable net profit of RMB6.09bn (+8.7% YoY), aligning with estimates. The company's performance was driven by steady sales in nervous system disease drugs and strong growth in anti-infective drugs. Additionally, bulk product sales grew by +23.8% YoY to RMB6.42bn, fueled by the expansion of the functional food & other business (+43.9% YoY) and growth in caffeine products.

The company also achieved significant milestones in its mRNA platform, including the EUA approval of SYS6006 for the treatment of COVID-19. This marks the first independently developed mRNA vaccine in China to receive EUA approval, underscoring CSPC's R&D capabilities. The vaccine demonstrated 85.3% efficacy in a heterologous booster study and has the potential to meet ongoing demand due to CSPC's large-scale production capacity (1.5bn doses/year).

CSPC has also out-licensed several ADC (Antibody Drug Conjugate) products, including SYSA1801 and SYS6002, to Elevation and Corbus, respectively, further validating its internal R&D capabilities.

Main Financial Performance

Revenue and Profitability Trends

• Revenue Growth: Expected to grow at 9.6% and 9.8% YoY in FY23E and FY24E, respectively.
• Net Profit Growth: Expected to grow by 6.0% and 10.0% YoY in FY23E and FY24E.
• Gross Profit Margin: Decreased slightly from 75.8% in FY21 to 71.9% in FY22, primarily due to a change in revenue mix and declining prices of vitamin C products.
• Operating Profit Margin: Remained stable at 23.64% in FY23E and increased to 25.14% in FY25E.
• Net Profit Margin: Increased from 19.13% in FY22 to 20.29% in FY25E.

Strategic Developments

• BD Deals: Acquired 51% interest in Recomgen in Feb 2022 and in-licensed batoclimab (HBM9161) from Harbour in Oct 2022.
• Out-licensing: Out-licensed SYSA1801 (Claudin 18.2 ADC) to Elevation in Jul 2022 and SYS6002 (Nectin-4 ADC) to Corbus in Jan 2023.
• mRNA Platform: Verified with the EUA approval of SYS6006, the first mRNA vaccine in China to receive EUA. The company is also developing vaccines for rabies, RSV, and VZV on the same platform.

New Product Growth and Stability

• New Products: Expected to see remarkable sales growth in 2023, including Mingfule, Duoenda, Anfulike.
• Old Products: Sales of NBP, Duomeisu, Jinyouli, Keaili, and Xuanning are expected to remain stable in 2023.
• NRDL Renewal: The new NRDL renewal price of NBP was implemented in Mar 2023, with increased accessibility expected to offset the price cut impact.

Valuation and Investment Outlook

• Target Price: Revised to HK$12.11 from HK$13.52 (based on DCF valuation with WACC 11.78% and terminal growth rate of 3.0%).
• Current Price: HK$7.64.
• Up/Downside: 45.0%.
• DCF Valuation (RMB mn): Total PV is estimated at RMB110,828, with equity value at RMB127,144.
• BUY Rating: Maintained, with the expectation of strong future performance.

Share Performance and Structure

• Market Cap: HK$91,528 million.
• Shareholding Structure:
  • Massive Giant Group Ltd: 10.2%
  • Cai Dongchen: 9.8%

Financial Statements (Selected)

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• CMBIGM does not provide individually tailored investment advice and recommends independent evaluation and consultation with a professional financial advisor.

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