20221124-招银国际-石药集团-01093.HK-Promising_clinical_progress_of_mRNA_COVID-19_vaccine_candidate_5页_1mb

CSPC Pharmaceutical (1093 HK) Summary

Core Content

CSPC Pharmaceutical Group Limited (1093 HK) is a leading Chinese pharmaceutical company with notable growth in revenue and net profit. The company has made significant progress in its clinical trials for an mRNA-based COVID-19 vaccine candidate, SYS6006, and has initiated six clinical trials to evaluate its safety and immunogenicity. Additionally, CSPC has expanded its pipeline through strategic partnerships and acquisitions, including the in-license agreement with Harbour Biomed for batoclimab (HBM9161) and the acquisition of 51% equity interest in Guangzhou Recomgen Biotech.

Key Financial Highlights (9M22)

• Revenue: RMB23.5bn, up 13.8% YoY (15.6% for 3Q22)
• Net Profit: RMB4.5bn, up 3.1% YoY (18.0% for 3Q22)
• Finished Drugs Sales: RMB18.6bn, up 10.8% YoY
  • Nervous system drugs: +9.2% YoY
  • Anti-infective drugs: +25.1% YoY
  • Other new products: Strong growth
• Bulk Product Sales: Up 20.1% YoY, driven by vitamin C
• Functional Food and Other Business: Up 47.6% YoY, due to volume and pricing increases in caffeine products

Clinical Development

• SYS6006:
  • Submitted primary analysis for adult group in a Phase II study (SYS6006-003)
  • Submitted primary analysis (14-day safety) for a study (SYS6006-007) evaluating as a heterologous booster
  • China CDC initiated an IIT study (ChiCTR2200062207) for 14 new variant-targeted vaccine candidates, including SYS6006
• Potential EUA Approvals: Results from the IIT study are critical for future approvals in China

New Product Progress

• Mingfule:
  • Submitted new indication application for thrombolytic treatment in acute ischemic stroke in Nov 2022
  • Expected approval in Dec 2023
  • Penetrated over 2,000 hospitals as of Oct 2022
  • Expected sales to exceed RMB100mn in 2022E
• Duoenda:
  • Marketing approved in Jan 2022
  • Fast ramp-up, expected to reach RMB150mn in 2022E
  • Sales could double to RMB300mn in 2023E

Investment Recommendation

• Maintain BUY:
  • Target Price: HK$13.52 (up from previous HK$12.88)
  • Potential return: Over 41.3% from current price (HK$9.57)
• Revenue Growth Expectations:
  • FY22E: +12.5% YoY
  • FY23E: +13.6% YoY
• Net Profit Growth Expectations:
  • FY22E: +6.9% YoY
  • FY23E: +17.8% YoY

Financial Summary

Shareholding and Market Data

• Market Cap (HK$ mn): 114,200.9
• Avg 3 mths t/o (HK$ mn): 8.3
• 52w High/Low (HK$): 10.18/7.00
• Total Issued Shares (mn): 11,933.2

Shareholding Structure

• Dongchen Cai: 23.7%
• UBS: 6.9%

Analyst Certification

• The analyst certifies that the views expressed accurately reflect their personal views.
• No part of their compensation is related to the specific views in the report.

CMBIG Ratings

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

Risk and Disclaimer

• Risks involved in transacting in any securities are highlighted.
• The report is not tailored for individual investors.
• Past performance does not guarantee future results.
• CMBIGM is not liable for any loss or damage incurred from relying on the report.
• The report is for intended recipients only and may not be reproduced or distributed without consent.

Legal and Regulatory Information

• United Kingdom: Report is provided only to persons under Article 19(5) or Article 49(2)(a) to (d) of the Order.
• United States: Not a registered broker-dealer; report is for "major US institutional investors" only.
• Singapore: Distributed by CMBISG, an Exempt Financial Adviser, and regulated by MAS.

DCF Valuation Summary

• Terminal Growth Rate: 3.00%
• WACC: 11.78%
• DCF Valuation (RMB mn):
  • 2022E: 130,805
  • 2023E: 145,222
• DCF per share (HK$): 13.52
• Net Debt (RMB mn): (15,351)
• Minority Interests (RMB mn): 933
• Equity Value (RMB mn): 145,222

Financial Performance

Valuation Metrics