【行业研究报告】石药集团-Promising clinical progress of mRNA COVID-19 vaccine candidate

24Nov202224Nov2022CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateCSPCPharmaceutical(1093HK)PromisingclinicalprogressofmRNACOVID-19vaccinecandidateCSPCreported9M22revenueofRMB23.5bn,upby13.8%YoY(+15.6%YoYfor3Q22),andattributablenetprofitofRMB4.5bn,upby3.1%YoY(+18.0%YoYfor3Q22),accountingfor76%and74%ofourfullyearestimates,respectively.9M22salesofthefinisheddrugsincreasedby10.8%YoYtoRMB18.6bn,mainlydrivenbythesteadyperformanceofnervoussystemdrugs(+9.2%YoY),aswellasthestronggrowthofanti-infectivedrugs(+25.1%YoY)andothernewproducts.Inaddition,bulkproductsalesdeliveredaYoYgrowthof20.1%in9M22,thankstotheincreasedsalesvolumeofvitaminC,whilefunctionalfoodandotherbusinessbookedastrongYoYgrowthof47.6%,propelledbybothvolumeandpricingrisesofcaffeineproducts.Besidesitsacquisitionof51%equityinterestofGuangzhouRecomgenBiotechinFeb2022andtheout-licensedealofSYSA1801,aClaudin18.2ADC,toElevationOncologyinJul2022,CSPChasenteredintoanexclusivein-licensedealwithHarbourBiomedinOct2022forbatoclimab(HBM9161)inGreaterChina,asteptofurthermoveforwarditsactiveBDstrategy.PromisingclinicaldevelopmentofCOVID-19mRNAvaccinecandidate.CSPChasinitiatedsixclinicaltrialsinevaluatingthesafetyandimmunogenicityofSYS6006.Notably,theCompanyhassubmittedtoChinaCDEtheprimaryanalysisonadultgroupfromaPhIIstudy(SYS6006-003)evaluatingimmunogenicityandsafetyofSYS6006aswellastheprimaryanalysis(14-daysafety)fromastudy(SYS6006-007)testingSYS6006asheterologousboosteronpeoplewithinactivatedCOVID-19vaccination.On29Jul,ChinaCDCdisclosedtoinitiateanIITstudy(ChiCTR2200062207)assessing14newCOVIDvarianttargetedvaccinecandidates,includingSYS6006.WebelieveresultsofthisstudywillbecriticalforpotentialEUAapprovalsinChina.CSPChasalreadycompletedaproductionlinewithcapacityof500mndoses/yearandtheconstructionof2ndphaseproductionlinesisinprogresswithtargetedtotalcapacityof1.5bndoses/year.SmoothmarketingandR&Dprogressofnewproducts.CSPCsubmittedanewindicationapplicationofMingfuleforthethrombolytictreatmentinpatientswithacuteischemicstrokeinNov2022,whichtheCompanyexpectedtobeapprovedinDec2023.ManagementindicatedthatMingfulehaspenetratedintomorethan2,000hospitalsasofOct2022andexpectedtheproductsaletoexceedRMB100mnin2022E.Meanwhile,withthemarketingapprovalinJan2022,Duoendaexperiencedfastramp-upandisinprogresstoreachafullyearsalesofRMB150mnin2022E,whichcouldbefurtherdoubledin2023E,accordingtomanagement.MaintainBUY.WecurrentlydonotfactorinpotentialrevenuecontributionfromSYS6006.WeexpectCSPC’srevenuetogrow12.5%/13.6%YoYandattributablenetprofittogrow6.9%/17.8%YoYinFY22E/23E.WerevisedourDCF-basedTPtoHK$13.52(WACC11.78%,Terminalgrowth3.0%).TargetPriceHK$13.52(PreviousTPHK$12.88)Up/Downside41.3%CurrentPriceHK$9.57ChinaHealthcareJillWU,CFA(852)39000842jillwu@cmbi.com.hkBenchenHUANG,CFAhuangbenchen@cmbi.com.hkStockDataMktCap(HK$mn)114,200.9Avg3mthst/o(HK$mn)8.352wHigh/Low(HK$)10.18/7.00TotalIssuedShares(mn)11933.2Source:FactSetShareholdingStructureDongchenCai23.7%UBS6.9%Source:HKExSharePerformanceAbsoluteRelative1-mth12.2%4.4%3-mth19.8%34.1%6-mth20.5%41.6%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(RMBmn)24,94227,86731,35435,63039,944YoYgrowth(%)12.811.712.513.612.1Netprofit(RMBmn)5,1605,6055,9907,0597,991YoYgrowth(%)38.98.66.917.813.2EPS(Reported)(RMB)0.430.470.500.590.67ConsensusEPS(RMB)nana0.510.610.64P/E(x)18.416.817.414.813.0Netgearing(%)(38.0)(40.9)(50.9)(57.9)(63.6)Source:Companydata,Bloomberg,CMBIGMestimates