Watson biological “cheap sale” asset farce: vaccine stocks

On the evening of December 4, Watson bio (300142. SZ) announced that it plans to transfer 32.60% of its shares in Shanghai Zerun Biotechnology Co., Ltd. (hereinafter referred to as “Shanghai Zerun”) to Zibo Yunze and yongxiuguanyou with 1.141 billion yuan. After the completion of the transaction, the proportion of equity directly held by the listed company in Shanghai Zerun will drop from 65.1429% to 28.50%, and Shanghai Zerun will no longer be the holding subsidiary of the listed company. Although in the strong voice of doubt, Watson bio immediately pressed the pause button for the transaction, the company’s share price still plummeted all the way after the opening on December 7, and finally dropped to 36.53 yuan. < / P > < p > investors reacted strongly to the sale of Shanghai Zerun by Watson bio. In addition to selling the HPV vaccine concept, more importantly, the market believed that the valuation of Shanghai Zerun was too “cheap”. However, from another point of view, since the beginning of the year, the price of vaccine stocks has increased significantly, and the profit ratio of many vaccine stocks has exceeded 100 times. If the future market expectations are difficult to translate into actual performance, how will the high valuation of vaccine stocks be digested? < / P > < p > Shanghai Zerun is one of the important subsidiaries of Watson biology. Although it has not made any profit so far, its HPV vaccine in research and development is expected to become a new profit growth point of the company. At present, its bivalent HPV vaccine is in the stage of applying for production approval and is expected to be put on the market in 2022; its nine valent HPV vaccine is in the stage of clinical phase I trial and is expected to be put on the market in 2026. < / P > < p > according to the appraisal report, the appraisal institution adopts the income method to evaluate Shanghai Zerun. According to the income method, the total equity value of Shanghai Zerun on the benchmark date of June 30, 2020 is 3.496 billion yuan, with a value-added of 2.875 billion yuan and a value-added rate of 462.55%. < / P > < p > in the conference call, investors reacted fiercely to the company’s resolution and raised a series of questions: Shanghai Zerun’s bivalent HPV vaccine is about to come out, why did they decide to sell it at this time? More importantly, why is it so cheap? Is it related to the transfer of interests? Under the heavy doubts of investors, the exchange also quickly sent a letter of inquiry. < / P > < p > with the market value of Wantai biological Co., Ltd. of nearly 80 billion yuan, Shanghai Zerun is only valued at 3.5 billion yuan, which seems to be too “cheap” by comparison. However, the transfer of the storm also let investors focus on the valuation of vaccine stocks. Covid-19,

, and the development of the new crown vaccine undoubtedly make vaccine shares the focus of market attention. The market value of the vaccine concept is also expanding. < / P > < p > wind shows that the A-share vaccine index (8841313. WI) closed at 2693.64 on December 7. Although it is lower than the historical closing price of 4047.76 on August 4, the year to date increase is still as high as 98.65%, and the recent year increase is 113.97%, far higher than all the core indexes of Shanghai and Shenzhen markets. < / P > < p > specifically, in addition to Kanghua bio, Wantai bio and kangxinuo-u newly listed in 2020, the year to date gains of other constituent stocks in the vaccine index are Tibet pharmaceutical, Zhifei bio, Weiming pharmaceutical, Fosun Pharmaceutical, Kangtai bio, Tiantan bio, Changchun hi tech, Hualan bio, Liaoning Chengda, Watson bio and Huabei pharmaceutical, respectively 71%, 182.67%, 148.62%, 104.74%, 83.21%, 82.62%, 73.54%, 68.44%, 52.80%, 12.65%, 7.01%. Correspondingly, as of December 7, the total market value of vaccine concept sector was as high as 1.11 trillion yuan, which has increased significantly compared with the total market value of 0.47 trillion yuan at the beginning of the year. Even excluding the market value of new listed companies in 2020, the total market value of vaccine concept sector is nearly 100% higher than that at the beginning of the year, almost doubling. < / P > < p > among the newly listed vaccine stocks in 2020, the stock price of Wantai biology rose the fastest, and the current market value is the highest. Wantai bio was listed on April 29, with an issue price of 8.75 yuan per share and a price earnings ratio of 22.98 times. Since its listing, the share price of Wantai bio has risen all the way, reaching the highest of 296.80 yuan, and the closing price of 188.20 yuan on December 7. Since its listing, the cumulative increase in share price has reached 2050.86%, and the market value has expanded from 5.463 billion yuan on the first day of issue to 81.604 billion yuan. Kanghua bio started its business on June 16 The price of Kanghua bio was set at 70.37 yuan / share, with a price earnings ratio of 22.99 times. Since the listing, Kanghua bio’s share price has reached the highest of 996 yuan, with a closing price of 472 yuan on December 7, with a cumulative increase of 570.74%, and its market value has expanded from 6.08 billion yuan to 28.32 billion yuan. Kangxinuo-u has been listed on the Lu Kechuang board on August 13, with an issue price of 209.71 yuan / share, and a closing price of 396.5 yuan on December 7, with a cumulative increase in share price It rose by 89.07%, with a closing market value of 65.671 billion yuan on December 7. According to wind, the price earnings ratio of vaccine index doubled from 42.79 at the beginning of the year to 67.29 on December 7, up 57.26%. < / P > < p > from the perspective of individual stocks, the most obvious change in P / E ratio is Watson bio, whose PE (TTM) was 46.38 times at the beginning of the year and 123.35 times on December 7. < / P > < p > in addition, the PE (TTM) of Kangtai biology at the beginning of the year and December 7 were 115.52 times and 190.12 times respectively, that of Tiantan biology were 50.38 times and 83.11 times respectively, that of Zhifei biology were 37.34 times and 72.64 times respectively, that of Hualan biology were 36.70 times and 64.19 times respectively, and that of Fosun medicine were 30.70 times and 53.91 times respectively. The PE (TTM) of Kanghua bio and Wantai bio, which are newly listed in 2020, also reached 64.09 times and 148.23 times on December 7, respectively. < / P > < p > the same is true in terms of static P / E ratio. According to the calculation of net profit in 2019, as of December 7, Watson bio’s static P / E ratio was 397.13 times, Wantai bio’s static P / E ratio was 390.70 times, Kangtai bio’s was 190.94 times, unnamed pharmaceutical’s was 187.36 times, Kanghua bio’s was 151.70 times, Huabei pharmaceutical’s was 111.70 times, Zhifei bio’s was 94.61 times, Changchun hi tech’s was 88.30 times, Tiantan bio’s was 87.18 times, Hualan bio’s was 64.21 times, and Xifei bio’s was 64.21 times 64 times. < / P > < p > take Wantai biology, which can be compared with Watson biology, as an example. The main products of Wantai bio are divided into in vitro diagnostic products and vaccine products. In 2019, 83.77% of Wantai bio’s sales revenue of 1.152 billion yuan came from diagnostic reagents, and only 1.30% of the revenue (14.97 million yuan) came from hepatitis E vaccine. The revenue contributed by hepatitis E vaccine is very limited. The main reason why the market gives Wantai bio a higher valuation is that in the month of its HPV vaccine R & D pipeline, Wantai bio’s bivalent HPV vaccine began to supply the market. < / P > < p > according to the agency, compared with the bivalent HPV vaccine of GSK and the tetravalent / jiuvalent HPV vaccine of MSD, the bivalent HPV vaccine of Wantai bio has a certain price advantage. However, in terms of the number of batches issued and the growth rate, the bivalent HPV vaccine is obviously inferior to the tetravalent and the nine valent HPV vaccine. < / P > < p > according to the batch issuing data of the Chinese people’s Procuratorate, the batch issuing quantity of bivalent HPV vaccine and tetravalent HPV vaccine in 2017 was 1.107 million and 348000 respectively; the batch issuing quantity of bivalent HPV vaccine, tetravalent HPV vaccine and nine valent HPV vaccine in 2018 was 2.112 million, 3.80 million and 1.216 million respectively; the batch issuing quantity in 2019 was 2.01 million, 5.54 million and 3.32 million respectively; and the batch issuing quantity from January to September 2020 was 2.13 million respectively There were 4.365 million, 4.59 million. < / P > < p > compared with bivalent vaccine, tetravalent and nine valent HPV vaccine can prevent more types of HPV virus and is more popular in the age range. Therefore, the nine valent HPV vaccine is relatively more imaginative. At present, Wantai biological’s nine valent HPV vaccine is in the phase II clinical trial stage, and Shanghai Zerun’s nine valent HPV vaccine is in the phase I clinical trial stage. However, even considering the listing of the nine valent vaccine in the future, the current valuation of Wantai biology and Watson biology is significantly higher than that of the original research manufacturer. < / P > < p > MSD is the exclusive manufacturer of four valent HPV vaccine and nine valent HPV vaccine worldwide. As a comparison, the total market value of Merck East on December 7 was US $208.753 billion. According to the net profit of US $9.843 billion in 2019, PE was only 21.21 times, and the current PE (TTM) was only 18.27 times. The static P / E ratios of Watson bio and Wantai bio are 397.13 and 390.70 times respectively, and the rolling P / E ratios (excluding non deduction) are 123.35 and 148.23 times respectively. In particular, Zhifei biology is worth mentioning. Among the A-share vaccine listed companies, Zhifei bio has the highest market value, with a total market value of 223.9 billion yuan on December 7. It also has the largest sales scale, with a revenue of 10.587 billion yuan in 2019. However, nearly 90% of its revenue comes from the agency of MSD vaccine products (i.e. four / nine valence HPV vaccine), and the revenue from its main products is less than 13%. Zhifei biology is essentially a vaccine agent, but its valuation level is far higher than that of the original research manufacturer with real technical content. According to the net profit of 2.366 billion yuan in 2019, Zhifei bio’s PE is more than 90 times and its rolling P / E ratio is 72.85 times. < / P > < p > as mentioned above, the rolling P / E ratio of Kangtai bio in vaccine stocks changed greatly, reaching 115.52 times at the beginning of the year and 190.12 times on December 7, mainly because its performance did not increase significantly in the first three quarters. From January to September 2020, Kangtai bio’s revenue was 1.420 billion yuan, a year-on-year increase of 1.87%; its net profit was 433 million yuan, a year-on-year increase of 0.58%. In fact, since 2019, the revenue of Kangtai biology has shown a downward trend, and the revenue growth of its original products has stagnated. Benefiting from the concept of new crown vaccine and the expected listing of 13 valent pneumococcal conjugate vaccine, the static P / E ratio of Kangtai bio is 190.94 times based on the net profit of RMB 575 million in 2019. < / P > < p > back to the discussion of Watson biology. After years of low performance, Watson bio’s stock price remains strong, mainly because the market gives higher expectations of 23 valent pneumonia vaccine, 13 valent pneumonia conjugate vaccine (currently listed) and HPV vaccine to be released soon. However, the valuation of Shanghai Zerun is only 3.5 billion yuan, which undoubtedly breaks the investors’ understanding of the valuation of vaccine stocks. < / P > < p > after a wave of correction in early August, the valuation of vaccine stocks is still on the high side at present. If it is difficult for the market expectation to turn into real performance in the future, the value will gradually return. Who will be the successor? < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.