In 4 months, the market value has evaporated by nearly 200 billion yuan.

Hengrui Pharmaceuticals, which used to be known as the “medical brother” of A-shares in the past, is a bit uneasy this year
.

Hengrui's revenue last year was 27.
7 billion, and this year's Q1 growth rate slowed down?

On the evening of April 19, Hengrui Medicine released its 2020 and 2021 first quarter financial reports
.

Among them, Hengrui's anti-tumor, anesthesia and contrast agent business achieved revenues of 15.
268 billion yuan, 4.
591 billion yuan and 3.
63 billion yuan, respectively, representing a year-on-year increase of 44.
37%, -16.
63% and 12.
4%
.

Regarding the sales of its blockbuster product PD-1 Karelizumab for injection, Hengrui did not disclose it directly in the financial report, but gave it-the realization of Karelizumab since the second half of 2019 On the basis of commercialization, the drug achieved a sales growth of 326.
42% during the reporting period last year, with a sales volume of 306,900 bottles
.

Hengrui PD-1 was newly entered into the medical insurance catalog at the end of December 2020.
The four indications of Hodgkin’s lymphoma, liver cancer, lung cancer, and esophageal cancer are all included.
The new medical insurance catalog has been officially implemented on March 1, 2021.
It is expected Hengrui PD-1 will increase substantially in the hospital market
.

On the other hand, the sales expenses of Hengrui Pharmaceuticals have always attracted the attention of the industry
.

Under the influence of factors such as the new crown epidemic, many industry insiders pointed out that Hengrui's 2020 financial report is basically in line with expectations
.

Hengrui's 2021 quarterly report shows that the company's operating income from January to March 2021 was 6.
929 billion yuan, a year-on-year increase of 25.
37%, and the net profit attributable to shareholders of listed companies was 1.
497 billion yuan, a year-on-year increase of 13.
77%
.

       In addition, it was previously reported that the net sales of carrelizumab from January to February totaled 2 billion yuan, while only 290 million yuan in March.
It is expected that the sales of carrelizumab in the first quarter will be lower than expected
.

       The fifth batch of centralized procurement is coming, and Hengrui’s blockbuster products have not yet been reviewed

       Hengrui's full-year 2020 performance and the financial report for the first quarter of 20121 have been clarified
.

       Recently, the industry has released a fifth batch of national organization drug procurement catalogs
.

       Several major varieties of Hengrui Pharmaceuticals, such as docetaxel, oxaliplatin, atracurium cisbesilate, and iodixanol, are in the fifth batch of centralized procurement catalogs, with sales totaling more than 4 billion.
In terms of total revenue of 27.
7 billion in 2020 alone, the impact of centralized procurement on Hengrui's revenue exceeds 14%
.

       What's more unfavorable is that Hengrui's iodixanol injection and oxaliplatin injection have not been reviewed, and they will undoubtedly bring some impact in the short term
.
According to Hengrui's 2020 financial report, the sales volume of only 100ml iodixanol injection in medical institutions is about 3.
6455 million
.
If calculated at the price of 569.
99-721 yuan per tube, the sales amount of the drug is about 2.
077 billion to 2.
628 billion, accounting for about 7.
5% to 9.
4% of its main operating income
.

       On April 16, a meeting minutes on Hengrui Pharmaceutical's exchanges flowed out of the industry
.
This document directly reveals that “Although Hengrui’s current innovative drug growth rate is relatively high, there is still a relatively high income from generic drugs.
The forthcoming fifth batch of centralized procurement will have a greater impact on the company
.
According to the historical implementation speed of centralized procurement It is roughly estimated that these centralized sourcing varieties will be on the financial statements in 2022, and there will be greater pressure on the performance in 2022.

"

       National drug procurement will be normalized.
It is expected that more and more generic drugs will be included in the future.
Even leading pharmaceutical companies should not underestimate its impact on performance
.

       The status of "medical brother" is difficult to maintain, and the market value has evaporated by nearly 200 billion in 4 months

       Just before Hengrui Medicine released its 2020 and 2021 Q1 financial reports, within five trading days from April 9th ​​to 15th, Hengrui’s stock price continued to fall from its closing price of 92.
44 yuan per share on April 8 to its closing price on the 15th.
82.
18 yuan per share, a cumulative decline of 11.
10%
.
Especially on April 14, the largest intraday drop in Hengrui's stock price reached 7.
60%, a record low in 10 months
.

       This may be affected by the announcement by the Ministry of Finance on the quality inspection of accounting information for pharmaceutical companies on April 12
.
The announcement shows that in 2018, Hengrui Medicine reimbursed expert lecture fees, review fees, and hosting fees for air tickets that were not incurred by the company, involving an amount of 1.
088 million yuan; in 2018, air tickets and tolls, consulting fees, and advertising incurred by the company were not incurred.
Fees and other invoices included the company’s employee welfare rewards, involving an amount of RMB 2,149,100; in 2018, the affiliated Lianyungang Comprehensive Second Office reimbursed the office sales staff subsidies, gifts for customers, and meals for academic activities with invoices for bridge tolls incurred by non-units.
And other expenses, involving an amount of 961,900 yuan
.
Accordingly, the Ministry of Finance imposed a fine of 50,000 yuan on Hengrui Medicine in accordance with the law
.

       On the evening of April 19, Hengrui successively disclosed relevant financial reports.
Even if the performance was basically in line with expectations, the stock price was still not very effective.
As of the afternoon of April 20, the price per share of Hengrui was 80.
31 yuan, down from the previous trading day.
2.
17%
.
Behind the continued decline in stock prices, it seems that the market sees a trace of hidden worries in the development of its performance
.

       It is worth recalling that on December 25, 2020, affected by the good news such as the approval of related drugs in clinical trials, the share price of Hengrui Pharmaceuticals, known as the “medical brother”, rose for a while, setting a new record high price at 115.
35 yuan.
/Share, with a market value of over 610 billion yuan
.
In January 2021, Hengrui's highest market value once approached 620 billion, and its stock price was around 116 yuan
.

       According to industry statistics, it took 16 years for Hengrui to go public and its market value exceeded 100 billion yuan, from 100 billion to 200 billion in 1 year, from 400 billion to 500 billion, and the time was shortened to less than 8 months, from 500 billion to 600 billion.
It only took 6 months
.

       However, it took only 4 months to fall from the 620 billion mark to the current 428.
2 billion
.
And just this year, Mindray's market value surpassed Hengrui, becoming a new A-share "medicine brother", with its latest market value of more than 510 billion
.

       Anti-tumor drugs are still Hengrui's core competitiveness

       With a large amount of investment in research and development, Hengrui’s financial report revealed that innovative drugs are irecoxib, apatinib mesylate, thiopefigrastim, pirotinib maleate, carrelizumab, toluenesulfonic acid Remazolam and fluzoparib are on the market
.
At present, nearly 20 projects have been approved to carry out global multi-center or regional clinical research.
Among them, karelizumab combined with apatinib, fluzoparib and other products have carried out phase III clinical trials in international multi-centers
.

       The profit margin of generic drugs continues to narrow, and Hengrui continues to increase its investment in and promotion of innovative drugs
.
According to its financial report, the company plans to build a R&D team with more than 4,700 people; it has established a professional academic team in the fields of anti-tumor drugs, contrast agents, infusion, cardiovascular and other fields, and has built a nationwide sales network and professionalization.
Marketing team; on the basis of maintaining the existing anti-tumor drugs and surgical drugs, further broaden the sales area, focusing on creating new growth points in areas such as immunotherapy, cardiovascular, metabolic diseases, and pain management.
.
.
To date, anti-tumor drugs, contrast agents and other fields are still important growth directions for its future performance
.

       Hengrui's financial report shows that in recent years, R&D investment accounted for more than 17% of sales revenue
.
Compared with Livzon Group, Fosun Pharma, Changchun High-tech, etc.
, Hengrui's R&D investment is also relatively high among its peers
.