, has "been behind" in the issuance stage.
20.43 yuan/share issue price, market value of 8.376 billion, price-to-earnings ratio of 467.51 times, fundraising of 1.0215 billion, this is the issuance data just disclosed by Microchip Bio on the evening of July 29.
On July 31, online and offline subscription will begin. New stock issuance has not yet begun, and many institutions have given valuations. According to the seller's research report, the pricing ranges given by Pacific Securities , CICC Securities , and China Merchants Securities are 16.10-21.95 yuan per share, 19.59-22.05 yuan per share and 17.30-21.14 yuan per share, respectively. The Anxin Securities investment price report obtained by the First Financial reporter is the recommended price range of 18.23-21.54 yuan per share. From the final pricing,
basically meets the expectations of mainstream brokers in the market. Compared with comparable companies, the total market value of Microchip Biologics after issuance was 8.376 billion yuan, which is lower than the median market value of comparable companies in the investment price report, Beida Pharmaceutical, BeiGene, Hualing Pharmaceutical, Innobi Biologics , Junshi Biologics, and Jishi Pharmaceuticals, which is 11.041 billion yuan and an average of 13.769 billion yuan. Is the market value of
with a exceeding 8 billion yuan reasonable? Some market view believes that innovative pharmaceutical companies cannot reasonably give valuations using the traditional relative valuation method PE, PEG, and PS methods. Compared with the discounts of peers, the valuation of about 8 billion is within a reasonable range. In addition, in the early stages of listing, it is possible that PE of science and technology enterprises is an abnormally high value or negative number, but with the increase in product volume and the emergence of new products, and after the business situation is improved, PE will fall back to a reasonable range.
registration "left behind" and the issuance is being stepped up
Today's announcement shows that the total number of remaining quotations after excluding invalid quotations and highest quotations in this issuance is 17.4746 billion shares, and the overall subscription multiple is 513.96 times. After excluding the highest quotation part, the quotation information of offline investors is as follows:
From the perspective of approval time, Microchip Bio is indeed "left behind".
Since Science and Technology Innovation Board began to accept listing applications in late March this year, biotechnology companies are undoubtedly the main force in application. Microchip Bio is the second batch of companies accepted by the China Securities Regulatory Commission. In May, Microchip Bio took the lead in completing the second and third rounds of inquiries. According to the official website of the Shanghai Stock Exchange, Microchip Bio was the first to pass the review meeting of the Shanghai Stock Exchange Listing Committee as early as June 5, becoming the first batch of listed companies and passed the meeting on the same day. On June 11, Microchip Bio submitted a registration application.
In the early stage of its declaration, there were constant controversies in terms of the company's technological content, profitability, actual controller identification issues, capacity utilization issues, and valuation. However, Microchip Bio, which thought it would become the first batch of listed science and technology companies, has not waited for further news. Seeing that other "candidates" of the same batch are on the list, Huaxing Yuanchuang, which was accepted at the same time, has become the "first stock" of the Science and Technology Innovation Board. Therefore, many speculations have emerged in the market, such as "the CSRC has basically concluded that it rejected the IPO of microchip bio", " microchip biochip will voluntarily withdraw the application materials", which has also caused controversy about the division of labor between the CSRC and the exchange in the IPO registration system.
According to the review process of listing on the Science and Technology Innovation Board, after the issuer submits the registration application, the CSRC must make a decision to agree or not register the issuer's registration application within 20 working days. The 20 working days do not include the CSRC inquiry time. After calculation, the company was further inquired by the China Securities Regulatory Commission from microchip bio- on June 11 to July 5. This happened to be 19 working days.
In the three rounds of inquiries on the Shanghai Stock Exchange, the issue of expense and capitalization of R&D expenditures has been paid attention to. In the third round of inquiries, the Shanghai Stock Exchange even asked Microchip Bio to modify the risk statement on the impact of capitalization of R&D expenditures on issuers' performance.
htmlOn the evening of July 17, the China Securities Regulatory Commission issued a message saying that it agreed to register the initial public offering of Microchip Bio- in accordance with the statutory procedures. Less than two hours from the time of agreeing to registration and registration taking effect, Microchip Bio has once again refreshed the speed of the Science and Technology Innovation Board.htmlOn July 28, Microchip Bio released an online roadshow announcement for its initial public offering and listing on the Science and Technology Innovation Board. It plans to issue no more than 50 million shares for the first time, raising 804 million yuan. The company's initial strategic allotment was 7.5 million shares, accounting for 15% of the total number of this issuance. The strategic allocation is composed of a special plan established by the sponsor's follow-up investment subsidiary (Anxin Securities Investment Co., Ltd.) and company executives participating in this strategic allocation (Anxin Securities Microchip Biotechnology executives participating in the strategic allocation collective asset management plan of the Science and Technology Innovation Board).latest announcement stated that the number of investors who submitted valid quotations for this offline issuance is 238, the number of allotment objects managed is 2,466, and the total number of valid plans to be subscribed is 16.0234 billion shares, which is 471.28 times the initial offline issuance scale before the callback. The subscription date for offline issuance of
is July 31 (9:30-15:00, ending at 15:00 on the same day) The subscription date for online issuance (9:30-11:30, 13:00-15:00) Determine whether to initiate the callback mechanism and the final online issuance number online.
8 billion valuation is expensive or not
The issue price of this issue is 20.43 yuan per share corresponding to the issuer's diluted price-to-earnings ratio in 2018 after deducting non-recurring gains and losses was 467.51 times, which is higher than the average static price-to-earnings ratio of the industry released by in the past month, and higher than the average static price-to-earnings ratio corresponding to comparable companies.
It is worth noting that the industry released by CSI Index Co., Ltd. has an average static price-to-earnings ratio in the past month is 30.79 times. Judging from the static price-to-earnings ratio corresponding to the closing price on July 26, the , which has the highest price-to-earnings ratio among comparable listed companies, is only 135.25 times. The average price-to-earnings ratio of several comparable companies given by the announcement is only 61.48 times, far lower than the price-to-earnings ratio of microchip bio.
Judging from the above data, the valuation of microchip biotechnology seems to be very high. However, it should be noted that the initial cost of new drug research and development is huge but often without any profit. It is common for net profit growth to be negative or even negative profits to be negative. The traditional relative valuation methods cannot reasonably give valuations. At the same time, since the R&D pipelines of different innovative drug companies are significantly different, the market value reference method for comparable companies is more limited.
The valuation system of innovative drugs is very obvious different from the valuation system of traditional pharmaceutical manufacturing. Referring to the relatively complete valuation system of innovative drug companies in mature foreign markets, the current value evaluation methods for innovative drug companies mainly include cost analysis method, market analysis method, expected income method (cash flow discount method DCF, risk-adjusted net present value method rNPV) and relative valuation method.
Domestic innovative drug companies are mainly divided into two types. One is to upgrade from large generic drug companies to innovation. These companies start from generic drugs or raw materials, and upgrade and transform into innovative drug companies through independent research and development or mergers and acquisitions, and then to internationalization, and eventually become leading pharmaceutical companies. The representative domestic companies include Hengrui Medicine , Fosun Pharmaceutical , etc.
Another type is a "born and innovative" R&D-driven biotechnology company. In addition to microchip bio, Chinese representative companies include BeiGene, Innovent Biologics , etc. These companies are all in the early stages of growth. Because they have no profits or have a small profit scale, they have not been listed in China, or they choose to list on the US and Hong Kong stocks. For innovative pharmaceutical companies at different stages, different valuation methods should be adopted.
reporter learned from market insiders that the valuation systems of leading pharmaceutical companies and innovative drug companies in the early stages of growth vary greatly. The former can use the relative valuation method or the expected return method, and the latter's most commonly used valuation method is the expected return method. This valuation system combines product pipelines and takes into account the risk factors such as new drug research and development and market sales in a relatively comprehensive manner, which is worth learning from by domestic innovative drug companies. As a classic indicator for measuring the operation of a company, PE sometimes does not reflect the real situation of pharmaceutical companies, especially innovative pharmaceutical companies. This is determined by the characteristics and special characteristics of the pharmaceutical industry itself. Microchip Bio (688321), which "left behind" during the launch of
, has "been behind" in the issuance stage.
20.43 yuan/share issue price, market value of 8.376 billion, price-to-earnings ratio of 467.51 times, fundraising of 1.0215 billion, this is the issuance data just disclosed by Microchip Bio on the evening of July 29.
On July 31, online and offline subscription will begin. New stock issuance has not yet begun, and many institutions have given valuations. According to the seller's research report, the pricing ranges given by Pacific Securities , CICC Securities , and China Merchants Securities are 16.10-21.95 yuan per share, 19.59-22.05 yuan per share and 17.30-21.14 yuan per share, respectively. The Anxin Securities investment price report obtained by the First Financial reporter is the recommended price range of 18.23-21.54 yuan per share. From the final pricing,
basically meets the expectations of mainstream brokers in the market. Compared with comparable companies, the total market value of Microchip Biologics after issuance was 8.376 billion yuan, which is lower than the median market value of comparable companies in the investment price report, Beida Pharmaceutical, BeiGene, Hualing Pharmaceutical, Innobi Biologics , Junshi Biologics, and Jishi Pharmaceuticals, which is 11.041 billion yuan and an average of 13.769 billion yuan. Is the market value of
with a exceeding 8 billion yuan reasonable? Some market view believes that innovative pharmaceutical companies cannot reasonably give valuations using the traditional relative valuation method PE, PEG, and PS methods. Compared with the discounts of peers, the valuation of about 8 billion is within a reasonable range. In addition, in the early stages of listing, it is possible that PE of science and technology enterprises is an abnormally high value or negative number, but with the increase in product volume and the emergence of new products, and after the business situation is improved, PE will fall back to a reasonable range.
registration "left behind" and the issuance is being stepped up
Today's announcement shows that the total number of remaining quotations after excluding invalid quotations and highest quotations in this issuance is 17.4746 billion shares, and the overall subscription multiple is 513.96 times. After excluding the highest quotation part, the quotation information of offline investors is as follows:
From the perspective of approval time, Microchip Bio is indeed "left behind".
Since Science and Technology Innovation Board began to accept listing applications in late March this year, biotechnology companies are undoubtedly the main force in application. Microchip Bio is the second batch of companies accepted by the China Securities Regulatory Commission. In May, Microchip Bio took the lead in completing the second and third rounds of inquiries. According to the official website of the Shanghai Stock Exchange, Microchip Bio was the first to pass the review meeting of the Shanghai Stock Exchange Listing Committee as early as June 5, becoming the first batch of listed companies and passed the meeting on the same day. On June 11, Microchip Bio submitted a registration application.
In the early stage of its declaration, there were constant controversies in terms of the company's technological content, profitability, actual controller identification issues, capacity utilization issues, and valuation. However, Microchip Bio, which thought it would become the first batch of listed science and technology companies, has not waited for further news. Seeing that other "candidates" of the same batch are on the list, Huaxing Yuanchuang, which was accepted at the same time, has become the "first stock" of the Science and Technology Innovation Board. Therefore, many speculations have emerged in the market, such as "the CSRC has basically concluded that it rejected the IPO of microchip bio", " microchip biochip will voluntarily withdraw the application materials", which has also caused controversy about the division of labor between the CSRC and the exchange in the IPO registration system.
According to the review process of listing on the Science and Technology Innovation Board, after the issuer submits the registration application, the CSRC must make a decision to agree or not register the issuer's registration application within 20 working days. The 20 working days do not include the CSRC inquiry time. After calculation, the company was further inquired by the China Securities Regulatory Commission from microchip bio- on June 11 to July 5. This happened to be 19 working days.
In the three rounds of inquiries on the Shanghai Stock Exchange, the issue of expense and capitalization of R&D expenditures has been paid attention to. In the third round of inquiries, the Shanghai Stock Exchange even asked Microchip Bio to modify the risk statement on the impact of capitalization of R&D expenditures on issuers' performance.
htmlOn the evening of July 17, the China Securities Regulatory Commission issued a message saying that it agreed to register the initial public offering of Microchip Bio- in accordance with the statutory procedures. Less than two hours from the time of agreeing to registration and registration taking effect, Microchip Bio has once again refreshed the speed of the Science and Technology Innovation Board.htmlOn July 28, Microchip Bio released an online roadshow announcement for its initial public offering and listing on the Science and Technology Innovation Board. It plans to issue no more than 50 million shares for the first time, raising 804 million yuan. The company's initial strategic allotment was 7.5 million shares, accounting for 15% of the total number of this issuance. The strategic allocation is composed of a special plan established by the sponsor's follow-up investment subsidiary (Anxin Securities Investment Co., Ltd.) and company executives participating in this strategic allocation (Anxin Securities Microchip Biotechnology executives participating in the strategic allocation collective asset management plan of the Science and Technology Innovation Board).latest announcement stated that the number of investors who submitted valid quotations for this offline issuance is 238, the number of allotment objects managed is 2,466, and the total number of valid plans to be subscribed is 16.0234 billion shares, which is 471.28 times the initial offline issuance scale before the callback. The subscription date for offline issuance of
is July 31 (9:30-15:00, ending at 15:00 on the same day) The subscription date for online issuance (9:30-11:30, 13:00-15:00) Determine whether to initiate the callback mechanism and the final online issuance number online.
8 billion valuation is expensive or not
The issue price of this issue is 20.43 yuan per share corresponding to the issuer's diluted price-to-earnings ratio in 2018 after deducting non-recurring gains and losses was 467.51 times, which is higher than the average static price-to-earnings ratio of the industry released by in the past month, and higher than the average static price-to-earnings ratio corresponding to comparable companies.
It is worth noting that the industry released by CSI Index Co., Ltd. has an average static price-to-earnings ratio in the past month is 30.79 times. Judging from the static price-to-earnings ratio corresponding to the closing price on July 26, the , which has the highest price-to-earnings ratio among comparable listed companies, is only 135.25 times. The average price-to-earnings ratio of several comparable companies given by the announcement is only 61.48 times, far lower than the price-to-earnings ratio of microchip bio.
Judging from the above data, the valuation of microchip biotechnology seems to be very high. However, it should be noted that the initial cost of new drug research and development is huge but often without any profit. It is common for net profit growth to be negative or even negative profits to be negative. The traditional relative valuation methods cannot reasonably give valuations. At the same time, since the R&D pipelines of different innovative drug companies are significantly different, the market value reference method for comparable companies is more limited.
The valuation system of innovative drugs is very obvious different from the valuation system of traditional pharmaceutical manufacturing. Referring to the relatively complete valuation system of innovative drug companies in mature foreign markets, the current value evaluation methods for innovative drug companies mainly include cost analysis method, market analysis method, expected income method (cash flow discount method DCF, risk-adjusted net present value method rNPV) and relative valuation method.
Domestic innovative drug companies are mainly divided into two types. One is to upgrade from large generic drug companies to innovation. These companies start from generic drugs or raw materials, and upgrade and transform into innovative drug companies through independent research and development or mergers and acquisitions, and then to internationalization, and eventually become leading pharmaceutical companies. The representative domestic companies include Hengrui Medicine , Fosun Pharmaceutical , etc.
Another type is a "born and innovative" R&D-driven biotechnology company. In addition to microchip bio, Chinese representative companies include BeiGene, Innovent Biologics , etc. These companies are all in the early stages of growth. Because they have no profits or have a small profit scale, they have not been listed in China, or they choose to list on the US and Hong Kong stocks. For innovative pharmaceutical companies at different stages, different valuation methods should be adopted.
reporter learned from market insiders that the valuation systems of leading pharmaceutical companies and innovative drug companies in the early stages of growth vary greatly. The former can use the relative valuation method or the expected return method, and the latter's most commonly used valuation method is the expected return method. This valuation system combines product pipelines and takes into account the risk factors such as new drug research and development and market sales in a relatively comprehensive manner, which is worth learning from by domestic innovative drug companies. As a classic indicator for measuring the operation of a company, PE sometimes does not reflect the real situation of pharmaceutical companies, especially innovative pharmaceutical companies. This is determined by the characteristics and special characteristics of the pharmaceutical industry itself.
combined with the disclosure of the company's prospectus, by comparing factors such as business model and main revenue composition, more than ten companies including A-share and Hong Kong listed companies include Hengrui Medicine, Kangchen Pharmaceutical, Geli Pharmaceutical, BeiGene, etc., which are more than ten companies including Microchip Biotechnology and . Among these companies, the main business activities of Beida Pharmaceutical , Geli Pharmaceutical, BeiGene, Hualing Pharmaceutical, Innobi , Junshi Biologics and Jishi Pharmaceutical are the closest to Microchip Biologics . They are all mainly engaged in the research and development and commercialization of innovative drugs, and the innovative drug product pipeline is relatively rich.
Currently, the latest market value of the 7 comparable companies is 20.3 billion yuan, and the median is 18.9 billion yuan. Shenwan Hongyuan analyst Lin Jin believes that microchip bio has a relatively small asset and revenue scale among comparable companies, and the growth rate of R&D expenditure is also lower than that of comparable companies. The number of R&D pipelines is at the midstream level, so a 40% discount is given. In other words, the reasonable market value range of microchip bio may be between 7.5 billion and 8.8 billion yuan. Judging from the announcement, the "positioning" of microchip biotechnology does not really break out of this range.
Northeast Securities research director Fu Lichun told reporters that valuing companies with strong scientific and technological innovation attributes is a challenge to the market. In addition to absolute valuation and relative valuation methods, it is also possible to consider comparing the valuations of A-shares, Hong Kong stocks and international market related companies as reference basis.
The above-mentioned market participants believe that in the early stage of listing, the company's profits were low or even negative due to the lack of products or small quantities ( microchip biotechnology only has Cedarbenamine), huge R&D investment, and other reasons, and the PE was an abnormally high value or negative number. However, with the increase in product volume and the emergence of new products, and after the business situation is improved, PE will fall back to a reasonable range.
"At present, there are relatively few new stocks compared with the Science and Technology Innovation Board, and they are in a state of insufficient supply of stocks and oversupply of funds. Therefore, the capital side needs to be considered." Fu Lichun also said that in the future, as the number of companies listed on the Science and Technology Innovation Board increases, prices may enter a new stage.
estimated price 16 yuan ~ 22 yuan
As early as after the prospectus for Microchip Biologics disclosed, the market discussed its net profit in 2018 of only 31 million yuan, but its valuation reached 8 billion yuan. Science and Technology Innovation Board companies have their own "non-profit" characteristics, and their valuation methods are also different from those of other A-share listed companies. In fact, the industry's valuation consensus on the Science and Technology Innovation Board has been initially formed, that is, while decreasing the price-to-earnings ratio, it will comprehensively examine the quality and development prospects of the company on the basis of grasping the characteristics of the industry. Generally speaking, the market will use the price-to-earnings ratio to measure the cost-effectiveness of an enterprise's investment, but this indicator is not applicable if there is a lack of profit data or when facing special enterprises.
However, Microchip Bio was declared under the standard of "the estimated market value is not less than RMB 1 billion, the net profit in the past year is positive and the operating income is not less than RMB 100 million". The prospectus shows that the operating income of Microchip Bio from 2016 to 2018 was RMB 85.3644 million, RMB 110 million and RMB 147 million, respectively, and the net profit attributable to the parent company owners was RMB 5.3992 million, RMB 25.9054 million, and RMB 31.2762 million, respectively. This means that when the market predicts its price, there are more references that can be quantified in principle than companies that are not profitable.
reporter sorted out the seller's research report and found that the price prediction of microchip biotechnology is mainly maintained between 16 yuan and 22 yuan per share.
The investment price report obtained by the First Financial reporter from an institutional person shows that the absolute valuation method and the relative valuation method are used to analyze it, and the reference market value range is 7.48 billion yuan to 9.27 billion yuan. Assuming that there is no over-allotment option, the valuation range per share is 18.23 yuan to 22.62 yuan, corresponding to the price-to-earnings ratio of net profit in 2018 is 240-293 times, corresponding to the price-to-earnings ratio of non-net profit in 2018 is 417-509 times, corresponding to the price-to-earnings ratio of expected net profit in 2019 is 196-239 times, corresponding to the price-to-sales ratio of of sales revenue in 2018 is 51-63 times, and corresponding to the price-to-sales ratio of expected sales revenue in 2019 is 36-45 times.
The institution also made predictions that the company's revenue from 2019 to 2021 will be RMB 208 million, RMB 558 million and RMB 646 million, respectively, with a compound growth rate of 63.54% in three years, and is expected to have net profits from 2019 to 2021 to be RMB 0.38 million, RMB 0.98 million and RMB 120 million, respectively, with a compound growth rate of 56.86% in three years.
is a coincidence. Shenwan Hongyuan also stated in its research report that it is recommended that the subscription price range of microchip biotechnology new shares is 20.48-20.58 yuan. China Merchants Securities also stated that the core business of microchip biotechnology is reasonably worth 7.09 billion yuan, plus cash, and after deducting debt, the equity is worth 7.88 billion yuan, corresponding to the stock price of 19.22 yuan, using 90%-110% of the price as the reasonable valuation range, that is, 17.30~21.14 yuan per share. Some brokerages also gave different views on
. Taking Huaxin Securities and BOCI as examples, the price range given is significantly lower than that given by other seller institutions.
Huaxin Securities used the historical valuation reference method, relative valuation PE method and absolute valuation DCF method to analyze and calculate the company's valuation respectively. Overall, the company's valuation is predicted to be 6.35 billion yuan by using the historical valuation reference method, the company's valuation is predicted to be 5.92 billion yuan by using the PE method, and the company's valuation is predicted to be 6.26 billion yuan by using the DCF method. After giving three valuation methods with different weights, it is concluded that the corresponding share price of the company is RMB 15.14 per share, and the recommended inquiry range is RMB 13.17 to RMB 17.12 per share, which is lower than the final issue price.
BOC International expects to achieve net profits of RMB 40.53 million, RMB 68.43 million and RMB 9646 trillion respectively from 2019 to 2021, with EPS of RMB 0.10, RMB 0.17, and RMB 0.24 per share, respectively. Therefore, it is believed that the DCF valuation is reasonable in price range of RMB 16.72~18.49.
is a coincidence. Shenwan Hongyuan also stated in its research report that it is recommended that the subscription price range of microchip biotechnology new shares is 20.48-20.58 yuan. China Merchants Securities also stated that the core business of microchip biotechnology is reasonably worth 7.09 billion yuan, plus cash, and after deducting debt, the equity is worth 7.88 billion yuan, corresponding to the stock price of 19.22 yuan, using 90%-110% of the price as the reasonable valuation range, that is, 17.30~21.14 yuan per share. Some brokerages also gave different views on
. Taking Huaxin Securities and BOCI as examples, the price range given is significantly lower than that given by other seller institutions.
Huaxin Securities used the historical valuation reference method, relative valuation PE method and absolute valuation DCF method to analyze and calculate the company's valuation respectively. Overall, the company's valuation is predicted to be 6.35 billion yuan by using the historical valuation reference method, the company's valuation is predicted to be 5.92 billion yuan by using the PE method, and the company's valuation is predicted to be 6.26 billion yuan by using the DCF method. After giving three valuation methods with different weights, it is concluded that the corresponding share price of the company is RMB 15.14 per share, and the recommended inquiry range is RMB 13.17 to RMB 17.12 per share, which is lower than the final issue price.
BOC International expects to achieve net profits of RMB 40.53 million, RMB 68.43 million and RMB 9646 trillion respectively from 2019 to 2021, with EPS of RMB 0.10, RMB 0.17, and RMB 0.24 per share, respectively. Therefore, it is believed that the DCF valuation is reasonable in price range of RMB 16.72~18.49.
