Boya's acquisition of Luo Yi to settle in vaccine industry may go further

On the evening of December 23, 2019, Boya biology announced the report on issuing shares, convertible corporate bonds and paying cash to purchase assets and related transactions (Draft) It is disclosed in the announcement that Boya biology plans to purchase 48.87% of equity of Luoyi biology by issuing shares, convertible bonds and paying cash at a price of 778 million yuan, plus 11.68% of equity of Luoyi biology by cash of 175 million yuan, and the price of 60.55% of equity of Luoyi biology is 953 million yuan The issue price of common shares and the initial conversion price of convertible bonds are both 25.00 yuan / share Therefore, this also means that Boya biology officially announced to settle in the vaccine industry, opening the double strategic support of blood + vaccine, but there are more or less questions: how significant the acquisition event is to Boya Luoyi biology is mainly engaged in group A + C meningococcal combined vaccine, haemorrhagic fever vaccine, For calf serum diagnostic kit, the progress of AC Hib triple vaccine research and development is its advantage However, before 2018, Luo Yi biology had been making "loss trading" due to the long-term backlog of shareholders, operation and sales It was also after the adjustment of shareholder structure in 2018 that the profitability was greatly enhanced According to the audit report of Luoyi (Wuxi) biopharmaceutical Co., Ltd issued by Boya, the revenue in 2017, 2018 and January to September 2019 was 167, 188 and 214 million yuan respectively, and the net profit deducted from non parent company was - 42, 19 and 52 million yuan respectively, with a significant improvement in performance Therefore, it seems that at least the acquired Luoyi biology is indeed a profitable company in the face, and there will be no post purchase situation According to the analysis of southwest, Guoxin, Tianfeng, Bank of China and other institutions, the overall valuation of Luoyi biology is 1.574 billion yuan, which is also a reasonable situation On the other hand, in terms of the analysis of the development potential of Luoyi bio, the revenue of Luoyi bio mainly comes from AC combined seedlings, accounting for 98.04% of the total revenue of Luoyi bio in the first three quarters of 2019 It is worthy of being the main product and core product of Luoyi bio, as well as the main revenue and profit source From the perspective of market issuing proportion, from January to November 2019, a total of 3.74 million copies (+ 57%) were issued by AC in combination with Miao, among which 3.03 million copies (+ 72%) were issued by Luoyi biology, accounting for 81% of the total In the past three years, the compound growth rate of the issuance of AC combined seedlings is close to 40%, and the proportion of Luoyi biology is also increasing, which is the main competitive power in the market of AC combined seedlings Due to the decline in the issuance of the batch of AC Hib seedlings this year, the growth of AC Hib seedlings is expected to further Secondly, there are also several points that can play a positive role in the market outlook prediction and short-term valuation of loyi bio 1 At present, the AC Hib triple vaccine of Luoyi biology is in the third stage of clinical practice AC Hib triple vaccine is the exclusive product of Zhifei biology From 2016 to 2018, 11.1/235.2/3218000 people were issued respectively, and the sales volume in 2018 is estimated to exceed 1.1 billion yuan After the listing in 2014, the volume was released rapidly, and the proportion of batch issuance in 2018 reached 57% (AC + AC Hib total batch issuance) In contrast, at present, the R & D Progress of loyi biology is still in a leading position If it can be approved for listing in 2022, the company will add another major variety 2 Luoyi biological AC combined vaccine is applied for clinical extension of applicable age At present, the AC combination vaccine of loyi biology is suitable for children aged from 6 months to 15 years, while the AC combination vaccine of competitors (Zhifei biology and Watson Biology) is suitable for children aged over 3 months In this respect, it is not without advantages, but in the near future, the company plans to expand the applicable population to children aged from 3 months to 15 years, and has completed the comparative research experiment of similar products In the future, it will apply for clinical III and IV Phase II clinical trial To a certain extent, it makes up the gap with competitive products and indirectly increases the competitiveness of Luoyi products 3 According to the audit report data, the annual compound growth rate of Luoyi biology is generally over 25%, with huge value-added space Luoyi biological revenue (100 million yuan) Photo source: Guoxin Securities Boya biology quick review Non net profit deducted by Luoyi bio (hospital) Photo source: Guoxin Securities Boya biology quick review Revenue and profit of blood products per ton of plasma are leading in the industry, and Danxia plasma allocation is promoted in an orderly manner Boya biology was founded in 1993, established a modern blood products production base in 2007, and listed in 2012 At present, it is mainly engaged in blood products business, and is a designated unit for blood products production At the same time, it is a comprehensive industrial group integrating biochemical medicine, chemical medicine and API Its main products include albumin, immunoglobulin and coagulation factor It is one of the enterprises with the most complete specifications of albumin and human immunoglobulin for intravenous injection in China, and one of the few enterprises with complete products in three categories In this year's catalogue of national basic medical insurance, work injury insurance and maternity insurance drugs, the main products of blood and non blood sectors, such as human serum albumin, intravenous C, human fibrinogen, rabies patient immunoglobulin, metformin, pioglitazone, are included As the most important determinant of blood products manufacturing enterprises, "pulp collection station", Borui currently has 12, with a pulp collection volume of 350 tons in 2018 and is expected to exceed 400 tons in 2019 At present, Danxia has 25 single plasma collection stations, which is the largest single blood product enterprise in China It is estimated that the current plasma collection volume has exceeded 400 tons After Danxia is injected into Boya, the number of Boya plasma collection stations will be in the top position in China, and the plasma collection volume will exceed 800 tons, and it is expected to impact the 1000 ton level of plasma collection, becoming the domestic blood system One of the leading enterprises As for Boya biology as a whole, the company has made great progress in recent years, with its main business income and net profit increasing year by year In the third quarter of 2019, its main business income exceeded 2 billion yuan, and its non net profit deducted reached 301 million yuan, with an annual growth rate of more than 10% But if we compare several other listed companies of blood products, we will find that the data growth gap is still wide The reason may be that in recent years, Chinese blood products enterprises have gradually become centralized through increasing the volume of pulp collection, expanding the production scale, and the continuous merger and reorganization among enterprises, forming a new pattern of four leading enterprises, i.e Zhongsheng group, Hualan biology, Shanghai Laishi and Taibang biology The volume of pulp collection of four enterprises accounts for more than 50% of the total volume of pulp collection in China, and the industry The concentration has increased significantly, while Boya biology is in the most embarrassing fifth place Data source: annual report of each enterprise Since 2019, in the face of the trend of industry concentration, the competition in the fiber market has intensified, and the company's sales indeed bear no small pressure The fiber sales have also increased slightly compared with the same period last year, and the data of 10% growth rate is not good But at the same time, Danxia plasma allocation was promoted in an orderly manner At the same time, although limited by albumin and muscle C approval only, the profit end cannot be improved If the plasma transfer between Danxia and Boya can be approved in 2020, it will also make Boya obtain effective profit increase In addition, the new blood product management regulations are expected to be promulgated and implemented next year, which is likely to benefit the plasma allocation of Boya In addition, Wuxi Luoyi's injection plan has two major advantages Although two major asset restructuring cannot be carried out in the same period of time, Danxia's completion of the injection has been delayed If Danxia starts to inject after the plasma transfer is approved, 2021 is also a very promising year, 1-2 years is not too late! At present, although the revenue and profit of blood products per ton of plasma of Boya's headquarters are less than that of several giants in the industry, Danxia is in the forefront Danxia also has rich plasma resources (stock plasma + 25 plasma stations) The injection of Danxia + Luoyi will complement the advantages of Boya's headquarters, or it may be comparable to the top of blood products enterprises In addition, the R & D work of blood products has not fallen, and the investment continues to rise year by year, and the core innovation ability keeps moving forward In this era of advocating innovation, at least it proves that Boya has absolutely kept up with the pace At least even if the industry can improve the concentration, Boya has a place in the blood products industry.