The epidemic is spreading around the world, allowing China's vaccine industry to "go global" on an unprecedented scale. However, Yunnan Watson Biotechnology Co., Ltd. (hereinafter referred to as " Watson Bio"), which has accumulated 21 years in this industry, 300142.SZ), why are there some doubts?
Compared with other listed vaccine companies, Watson Bio can be said to be a pharmaceutical company full of topics. From time to time, a piece of news breaks out and causes market agitation. For example: "selling off" core assets caused outrage among investors, and was questioned by regulatory authorities. It took 127 pages to respond to questions, but it was still difficult to regain the trust of investors.
Let’s look at the company’s performance again. The previously announced 2021 first quarter report and 2020 annual report show that both revenue and net profit have achieved high growth. However, the stock price of Watson Bio has dropped from last year’s highest price of 95.79 yuan. It has been falling all the way. Even if the stock price rebounded this year with the help of the recurrence of the epidemic, as of the end of May, it only closed at 67.90 yuan, which is still far from the peak.
Recently, the mRNA new crown vaccine ARCoV jointly developed by Watson Bio, Suzhou Aibo Biotechnology, and the Academy of Military Medical Sciences Institute of Military Medicine will begin Phase III trials in Mexico at the end of the month.
The market is worried that the above-mentioned progress of the new crown vaccine may not be able to effectively restore the confidence of investors, because there are some "hidden dangers" hidden behind the surge in company performance.
New vaccine will start Phase III trial
It is understood that the above-mentioned Phase III trial of the new coronavirus vaccine to be started in Mexico is currently waiting for approval from the Mexican drug regulatory agency.
This new crown vaccine is Watson Bio announced in May last year that it was jointly developed with Suzhou Aibo Biotech.
Among them, Watson Bio is mainly responsible for the QA, QC, IND, clinical research, NDA and commercial production of the new coronavirus mRNA vaccine; it is responsible for paying the research and development expenses of the vaccine to Abbio according to the agreement, and paying Abbio milestones according to the milestones. For fees, will pay a sales commission to Aibo Biotech as agreed in the agreement after the product is launched.
Suzhou Aibo Biotech is responsible for the preclinical research of the new coronavirus mRNA vaccine, including the molecular design, chemical modification and formulation process development of the mRNA vaccine, and carrying out vaccine efficacy and toxicology experiments; it is responsible for clinical application samples, clinical phase I, and clinical trials. Preparation of phase II samples; responsible for technology transfer to Watson Bio.
ARCoV vaccine has independent intellectual property rights, and its core raw materials and key equipment have been domestically produced. In December 2020, Watson built China's first mRNA COVID-19 vaccine production workshop. The ARCoV vaccine is expected to be completed and put into production within 8 months, with a first-phase production capacity of 120 million doses per year.
According to Reuters , this is China’s first mRNA vaccine to enter Phase III clinical trials.
At the same time, the outbreak of the epidemic in India has also caused vaccine stocks to see a sharp rise in their stock prices. Watson Bio is also one of the "beneficiaries". From April 9 to May 27, the company's stock price rose from around 41 yuan to around 67 yuan, an increase of more than 50%. Still, it's still some way off from last year's peak share price.
Performance surge and hidden "hidden dangers"
Watson Bio Although the performance seems to be growing, there are many related market doubts.
At the same time that Watson Bio released its first quarter report for 2021, it also announced its 2020 annual report. Looking at the first quarter report first, its operating income was 434 million yuan, a year-on-year increase of 286.45%; the net profit attributable to the parent company was 32.1588 million yuan, a year-on-year increase of 277.5%. The company said, "The performance growth is mainly due to the increased sales of 13-valent pneumococcal polysaccharide conjugate vaccine and original vaccine products."
Looking at the 2020 annual report, operating income increased by 162.13% year-on-year to 2.939 billion yuan; after deducting non-returnable income Net profit of the parent company increased by 485.44% year-on-year to 715 million yuan.
The surface data looks good, but regarding the performance of Watson Bio in 2020, the Eagle Eye Early Warning System believes that the company's performance growth has not improved the company's profitability quality. During the reporting period, the net cash flow/net profit ratio from operating activities was 0.09 lower than 1, indicating poor earnings quality.
In addition, according to Wind data, the company's book balance of accounts receivable at the end of 2020 was 2.004 billion yuan, an increase of 290.68% from the beginning of the period, but the balance of bad debt provisions for accounts receivable was 64.3763 million yuan, a decrease of 10.18% from the beginning of the period. The book balance of other receivables was 366 million yuan, an increase of 23.77% from the beginning of the period, and the balance of bad debt provisions for other receivables was 64.5282 million yuan, a decrease of 36.84% from the beginning of the period.
If you look closely, you will find that the growth rate of Watson Bio's accounts receivable in 2020 far exceeded the growth rate of operating income, which were 290.68% and 162.13% respectively, and this is in sharp contrast to the situation in the previous two years. According to the situation in the past three years, the company's accounts receivable/operating income ratio is also far higher than the industry average.
Regarding related issues, Shenzhen Stock Exchange also inquired about Watson Bio. The company responded, "Mainly due to the launch of the company's 23-valent pneumonia vaccine and 13-valent pneumonia vaccine, sales revenue has continued to grow year by year. The balance of accounts receivable has also increased year by year. "He also said that the company has continued to increase the management of collection of accounts receivable in recent years.
Although the company has strengthened collection management, how effective can this be? In response to related issues, "Investor Network" contacted Watson Bio , but the company did not make any response.
In addition to accounts receivable, the marketing expenses of Watson Bio have also attracted market attention. In 2020, the company's marketing and maintenance expenses in sales expenses reached 1.059 billion yuan, a year-on-year increase of 163.99%, accounting for 36.03% of operating income. Talking about the reasons for the growth, the company attributed it to the increase in sales of the 13-valent pneumonia conjugate vaccine. Due to the expansion of sales scale, marketing expenses will naturally increase.
html The 113-valent pneumonia vaccine is about to face fierce competition
Since Watson Bio attributed the increase in accounts receivable and marketing expenses to the 13-valent pneumonia vaccine (the price of the vaccine refers to: the vaccine can prevent several types of bacteria Effectiveness, the 13-valent vaccine can cover 13 types of pneumococcal bacteria), then let’s take a look at the situation of the company’s 13-valent pneumonia vaccine (hereinafter referred to as the “13-valent vaccine”)?
In the past ten years, the 13-valent pneumonia vaccine has been dominated by Pfizer and is by far the best choice for preventing pneumococcal infection. The global sales in 2020 are almost equivalent to the second and third places combined, and it is known as the "King of Vaccines".
Until December 31, 2019, the 13-price vaccine of Watson Biotechnology was approved for sale in China. It is understood that the 13-price vaccine requires a total of 4 injections. Each injection of Watson Bio is 100 yuan cheaper than Pfizer . Moreover, Watson products are suitable for children aged 6 weeks to 5 years old, while Pfizer products are only suitable for children aged 6 weeks to 5 years old. 15 month old child.
According to the data released in the annual report of Watson Biotechnology , the 13-price vaccine contributed a total of 1.658 billion in revenue, accounting for 56.41% of the total revenue of Watson Bio32.939 billion. It can be seen that the 13-price vaccine has a significant impact on the overall revenue of Watson Biotechnology . importance of the company.
However, it is worth noting that after reaching the peak of global sales of US$6.245 billion in 2015, the sales of 13-price vaccines have begun to decline. From 2018 to 2020, global sales of 13-price seedlings have basically remained stable and have entered an era of stock competition.
and Kangtai Biotech ’s second on-site inspection of 13-price seedlings has ended, and it is basically a certainty that it will be launched within the year. In addition, companies such as CanSino , Wuhan Bovo Biotech, and Chengdu Antjin Biotech are all developing 13-valent pneumonia vaccines. my country's market size is about 6.97 billion. After competing products are launched one after another, how much of the pie can Watson Bio get? "Investor Network" will continue to pay attention.
This article comes from investor network
