Zhang Wei, Investor Network

The COVID-19 epidemic has dispersed, and the performance of some vaccine companies has begun to fade.

CANSINOBIO Co., Ltd. (hereinafter referred to as "CANSINOBIO", 688185.SH, 06185.HK), a manufacturer of human vaccines, released its 2022 results KuaiBao on February 28th. According to KuaiBao, CANSINOBIO's total operating income in 2022 was 1.035 billion yuan, down 76 percent from the same period last year, while its mother's net profit was a loss of 902 million yuan, down 147 percent from the same period last year.

In 2021, CANSINOBIO's revenue reached 4.3 billion yuan and his net profit exceeded 1.9 billion yuan. For the reasons for the dramatic changes in performance, CANSINOBIO said that it is mainly due to the slowdown in the global COVID-19 vaccine vaccination rate growth and the reduction in vaccine demand.

CANSINOBIO has previously said that the company's non-COVID-19 vaccine product research and development progress and commercial landing capacity is not yet mature. In the case of the weak growth of COVID-19 's vaccine business, what other products of CANSINOBIO can help it turn losses into profits?

COVID-19 's performance of declining demand for vaccine "changed face"

According to public data, CANSINOBIO was founded in January 2009, listed on the main board of the Hong Kong Stock Exchange in March 2019, and listed on the Shanghai Stock Exchange Kechuang Board in August 2010. it is the first listed company in the domestic vaccine industry.

According to the prospectus, CANSINOBIO is committed to the research, development, production and commercialization of innovative vaccines that meet Chinese and international standards. The company's R & D pipeline covers 17 vaccine products for 13 indications such as pneumonia, tuberculosis, meningitis, diphtheria tetanus and Ebola virus disease.

In the past two years, CANSINOBIO's revenue mainly comes from inhaled recombinant novel coronavirus vaccine (adenovirus type 5 vector) (hereinafter referred to as "inhaled COVID-19 vaccine").

According to Wind data, CANSINOBIO's revenue from 2017 to 2020 grew from scratch to only 25 million yuan in 2020, while net profit lost for four consecutive years in the same period. In 2021, CANSINOBIO's COVID-19 vaccine for inhalation was put on the market, which helped it achieve a revenue of 4.3 billion yuan and a net profit of 1.914 billion yuan in 2021.

CANSINOBIO made his first profit in 2021

CANSINOBIO, who made a profit for the first time, also became the first biotechnology loss-making listed company in Science and Technology Innovation Board to lose money (commonly known as "picking U"). However, in 2022, CANSINOBIO lost money again.

According to KuaiBao, the results released on Feb. 28, CANSINOBIO's total operating income in 2022 was 1.035 billion yuan, down 76 percent from the same period last year; its net profit was a loss of 902 million yuan, down 147 percent from the same period last year; and basic earnings per share also changed from 7.74 yuan in 2021 to-3.65 yuan.

For the reasons for the "change of face" of the performance in 2022, CANSINOBIO said that the demand for COVID-19 vaccine has dropped sharply compared with 2021, so that the company's COVID-19 vaccine product sales revenue has dropped sharply compared with 2021; at the same time, as the commercialization process continues to advance, the sales cost is higher than 2021; coupled with the impairment of COVID-19 vaccine-related inventory, the combined factors lead to a loss of net profit in 2022.

Non-vaccine products are not available yet.

Although the domestic epidemic has long been over, CANSINOBIO's COVID-19 vaccine business is still continuing. CANSINOBIO announced on March 2 that the company's COVID-19 vaccine for inhalation had recently received emergency permission from the Indonesian Drug and Food Administration.

CANSINOBIO said that Indonesia is the third country in the world after China and Morocco to approve the use of inhaled COVID-19 vaccine, which will play a positive role in promoting registration in other countries and regions; if subsequent sales orders are formed, it will have a positive impact on the performance of listed companies.

After entering 2023, the global COVID-19 vaccine market environment has undergone great changes. COVID-19 vaccine demand has been greatly reduced, and the supply of related products has already exceeded demand. Under such circumstances, what other products of CANSINOBIO can help him turn losses into profits in the "post-epidemic" era?

According to the announcement, CANSINOBIO's tetravalent meningococcal polysaccharide conjugate vaccine (MCV4) was officially approved in December 2021. It is understood that MCV4 is the first tetravalent meningitis conjugate vaccine approved to market in China. It is pointed out that MCV4 has better immune effect than bivalent meningitis conjugate vaccine (MCV2), and MCV4 has great room for growth in the future.

On the other hand, for CANSINOBIO, MCV4 is also the fourth vaccine product approved by the company after bivalent meningitis conjugate vaccine (MCV2), Ebola vaccine and inhaled COVID-19 vaccine.

In addition, CANSINOBIO's thirteen-valent pneumococcal conjugate vaccine (PCV13i) will complete all clinical field work by the end of 2022. CITIC expects PCV13i to be registered by 2023, with nodes approved by the end of 2024 or the first half of 2025.

However, it is not clear whether the above products can help CANSINOBIO's performance. CANSINOBIO has previously said that the company's non-COVID-19 vaccine product research and development progress and commercial landing capacity is not yet mature. From this point of view, there is still uncertainty about whether CANSINOBIO can turn losses into profits in 2023.

Both A shares and H shares are weak.

As the first Aspirh stock in the vaccine industry, CANSINOBIO has attracted a lot of attention since it went public.

According to Wind data, CANSINOBIO listed on Science and Technology Innovation Board on August 13, 2020 at an issue price of 209.71 yuan per share. In July 2021, CANSINOBIO rose to 797.2 yuan per share, with a market capitalization of nearly 200 billion yuan. As of March 2, CANSINOBIO closed at 125.19 yuan per share, with a market capitalization of 31 billion yuan. At present, the market value of CANSINOBIO's A shares has evaporated more than 150 billion yuan from its peak.

Compared with A shares, the decline of CANSINOBIO H shares is also larger. CANSINOBIO's H shares hit a high of HK $449 per share in February 2021 and fell to a low of HK $40 per share in October 2022. As of March 2, CANSINOBIO's H shares closed at HK $61.1 per share, with a market capitalization of HK $15.1 billion.

CANSINOBIO's A shares and H shares have fallen sharply.

Although A shares and H shares have both fallen, some investment institutions still have confidence in CANSINOBIO's future trend.

CITIC said that the global COVID-19 vaccine vaccination rate growth rate slowed down, but CANSINOBIO's research and development pipeline is rich, a number of varieties are expected to become new growth points of performance, the future sales of MCV2 and MCV4 products can be expected. By the end of 2022, CANSINOBIO's MCV2 and MCV4 had completed access to more than 20 provinces. CITIC expects CANSINOBIO's net profit in 2023 and 2024 to be 757 million yuan and 1.61 billion yuan, with a target price of 153yuan in 2023, maintaining a "buy" rating.

Morgan Stanley pointed out in a report that it was challenging for CANSINOBIO to set a sales target of 1.5 billion to 2 billion yuan for inhaled COVID-19 vaccine, forecasting sales of only 1.17 billion yuan in 2022 and falling to 790 million yuan in 2023. CANSINOBIO's H-share target price is 90 Hong Kong dollars, rated as "overweight."

Judging from the current trend, CANSINOBIO A shares, H price trends have not reached the organization's expectations. In 2023, CANSINOBIO's A shares fell 14% and H shares fell 11%. (produced by thinking Finance) ■