Hualan bio (002007. SZ) should have been the biggest beneficiary of the 2020 influenza vaccine super year. However, it seems that this is not the case from the release data.
According to the latest batch issuance data, 41.7 million influenza vaccines were issued from January to October this year, an increase of 54% over the same period last year. Among them, 9.38 million influenza vaccines were issued in October this year, a decrease of 4% compared with 9.82 million in the same period of last year. The year-on-year decline in the number of influenza vaccine batches issued in October was quite surprising.
Specifically, a 57% year-on-year decrease in the number of batches of trivalent influenza vaccine was the main reason for the decline. The number of trivalent influenza issued in October was 3.15 million.
As a manufacturer of influenza vaccine, Hualan bio is facing more and more competition. From January to October this year, the batch issuance volume of Hualan bivalent influenza vaccine was 12.56 million, which was only 91% higher than that of the whole industry. Due to the entry of competitors, the market share of Hualan bivalent influenza vaccine dropped from 86% in 2019 to about 60%.
In terms of performance, from January to September this year, Hualan bio achieved an income of 3.073 billion yuan, a year-on-year increase of 16.46%, and a net profit of 964 million yuan, a slight increase of 0.04% year-on-year.
The decline in vaccine market share and no improvement in performance have made Hualan biology inferior in its influenza season. In addition, Hualan biologicals main plate blood products business is in the doldrums, and the prospect of the biopharmaceutical sector is not optimistic. Hualan bio also introduced high capital, planning to split the vaccine plate with higher gross profit rate. Once the vaccine plate is split and listed, there is one less reason to buy Hualan.
Rush for flu season
Influenza vaccination in 2020 is coming to an end.
Generally, November to March next year is the high incidence season of influenza, and the best vaccination period for influenza vaccine is before the high incidence season, that is, around October.
According to Feng Luzhao, a researcher at the Chinese Center for Disease Control and prevention, the number of influenza vaccine batches issued this year will reach 50 million doses. A total of 41.7 million influenza vaccines were approved and issued from January to October of this year, and there is still about 10 million pieces of influenza vaccine from the total of 50 million. Among them, 9.38 million pieces were issued in October, nearly 10 million in a single month, which is the peak of influenza vaccination.
At present, the domestic influenza vaccine can be divided into two types: trivalent and tetravalent. Tetravalent influenza vaccine has advantages in preventing the number of influenza virus subtypes. It is generally believed that the tetravalent influenza vaccine can replace the trivalent influenza vaccine in the future. According to the drug bidding information of various provinces and cities, the average bid price of tetravalent influenza vaccine is about 121 yuan, which is nearly three times of that of trivalent influenza vaccine.
Hualan biological has strategically abandoned the trivalent influenza vaccine and shifted its focus to the tetravalent influenza vaccine. From January to October this year, the batch issuance volume of Hualan biological trivalent influenza vaccine was 1.76 million, a year-on-year decrease of 62%, and the market share decreased from 20% in 2019 to less than 10%; the batch issuance volume of tetravalent influenza vaccine was 12.56 million. Xie Junmin, director of Hualan biology, once said, the production of tetravalent influenza vaccine last year was 8 million, and this years production has more than doubled.. If 16 million pieces are calculated, and 12.56 million pieces have been issued in batches, Hualan biology has indeed reached the situation of full production and full sales.
The market share of Hualan bivalent vaccine decreased from 86% to about 60% although the batch issuance increased by 91% year on year. With the continuous expansion of the market, Hualan biological also ushered in more competitors. The entry of Changchun Institute of Biological Products Co., Ltd. (hereinafter referred to as Changchun Institute), Kexing pharmaceutical and Jindike, which are to be listed on the science and technology innovation board, have reduced the market share of Hualan biological products.
On the whole, the penetration rate of influenza vaccine in China is far lower than that in developed countries. This year, the demand for influenza vaccine has soared due to the impact of the new coronavirus epidemic. It remains to be seen whether the overall situation of severe shortage of vaccine market can be sustained in the future.
In the first three quarters, Hualan bio achieved an income of 3.073 billion yuan, a year-on-year increase of 16.46%, and a net profit attributable to its parent company of 964 million yuan, a slight increase of 0.04% over the same period of last year. After deducting non-profit, the net profit of parent company showed a negative growth year-on-year. The influenza vaccine was approved and issued as early as July, but the vaccine products that should have contributed to the achievements have not been reflected.
This is related to the income structure of Hualan.
According to the 2019 annual report, the revenue from blood products accounts for about 70% and that of vaccine products accounts for about 30%. Therefore, the main business income of Hualan bio is blood products. In terms of gross profit margin, the profitability of blood products is far less than that of vaccine products. The gross profit rate of blood products is about 60%, while that of vaccine products is over 80%. But vaccine products are more seasonal, and most of the revenue comes from the second half of the year.
Although the supply of clinical blood products is seriously in short supply, the blood products are mainly suppressed by insufficient supply and strict supervision, and the overall growth rate of the industry is slow. Similar to vaccines, blood products are subject to batch issuing management system, and the batch issuing period is about 5 to 6 months. Since 2012, the annual growth rate of domestic blood product batch issuance is only 4%.
The bottleneck of the main business is the reason why Hualan biology is eager to jump into the bleeding products plate, but so far, it has not changed the situation that blood products are dominant.
The vaccination season has come to an end, and the performance of vaccine manufacturers will be settled. Assuming that the revenue of vaccine products will double in 2020 and the cost rate will remain unchanged, the corresponding gross profit will be about 1.774 billion yuan; the gross profit of blood products will decrease by 14%, corresponding to the gross profit of 1.299 billion yuan. It is predicted that the gross profit of Hualan biology will be about 3.073 billion yuan in 2020, and the predicted net profit after deducting expenses will be about 1.6 billion yuan, and the P / E ratio will be as high as 50 times.
At present, Hualan biological has launched the plan of splitting and listing the Hualan biological vaccine plate, and has introduced two strategic investors including Hillard. From the perspective of gross profit margin, Hualan biological vaccine is more attractive than other sectors. Once the vaccine sector is spun off and listed, investors have one less reason to buy Hualan.
In addition to the vaccine plate, the biopharmaceutical plate is also one of the tracks of Hualan biological bet. According to the interim report of Hualan biology in 2020, adalimumab, trastuzumab, rituximab and bevacizumab are currently in clinical stage III. And biopharmaceuticals have set off a wave of price cuts. For example, in November 2019, xiumeile, the king of medicine, was included in the list of medical insurance in 2019 through medical insurance negotiation. The product price was close to 1290 yuan / piece, with a decrease rate of more than 83%, which directly prompted domestic manufacturers to fight for price war. The prospect of biopharmaceutical track is also not optimistic.
As of November 18, Hualan biological closed at 43.37 yuan / share, retreating 42.93% from the highest point.
Source: interface news Author: Fan Jiazhi, editor in charge: Wang Xiaowu_ NF