CR BOYA BIO-PHARMACEUTICAL(300294)：A WORLD-LEVEL MANUFACTURER OF BLOOD PRODUCTS EMPOWERED BY CHINA RESOURCES

CR Boya Bio-pharmaceutical is a leading manufacturer of blood products in China. In recent years, the Company's plasma harvest volume has increased steadily, and its comprehensive utilization rate of plasma has remained at the industry forefront. With CR Pharmaceutical becoming the controlling shareholder, CR Boya Bio-pharmaceutical will expand its raw plasma supply capacity and may enter the "first echelon of blood products enterprises in China". The marketing of prothrombin complex concentrate (PCC) and antihemophilic factor (factor VIII) will further increase the Company's earnings per tonne of plasma, while the construction of a new smart factory will break the Company's capacity bottleneck. Considering all these, we believe that the Company has a clear visibility of steady earnings growth. We assign 38x 2023E PE to derive a target price of Rmb39 and initiate coverage of the Company with a "BUY" rating.
China's leading manufacturer of blood products with focus on the blood product business. Founded in 1993, CR Boya Bio-pharmaceutical is a comprehensive healthcare industry group focusing on blood products, with integrated presence in biochemical drugs, chemical drugs and active pharmaceutical ingredients (APIs). In 2022, the Company achieved revenue/and attributable net profit (ANP) of Rmb2,759mn/432mn (+4.08%/+25.45% YoY) respectively. Among them, the revenue/ANP from blood products were Rmb1,315mn/498mn (+8.63%/+29.45% YoY) respectively. With CR Pharmaceutical becoming its controlling shareholder, we believe that the Company's future development strategy will be focusing on the blood product business, while relying on the resource advantages of China Resources Group (CR) and CR Pharmaceutical to achieve rapid development.
Steady increase in the plasma harvest volume based on the empowerment by CR. At present, the Company owns 14 plasma harvest stations, and has obtained county- and municipal-level approvals in Inner Mongolia, Shandong, Hubei, Hebei and Henan provinces. According to its announcement, the Company's annual plasma harvest volume was about 439 tonnes (+4.52% YoY) in 2022. We believe that as CR has become the actual controller of CR Boya Bio-pharmaceutical, the group can empower the Company in terms of resources, expansion of the coverage of plasma harvest stations, and application of the establishment of new stations, improving its raw plasma supply capacity. According to CR Boya Bio-pharmaceutical's announcement, the Company aims to achieve an annual plasma harvest capacity of more than 1kt during the 14th Five-Year Plan (FYP) period (2021-25), with the total number of its plasma harvest stations exceeding 30, so as to become a tier-one blood products supplier in China as soon as possible and also a world-class blood products manufacturer.
Smart factories expand production capacities, pushing earnings per tonne of plasma to a new high. The Company's private placement prospectus shows that the aggregate production capacity of its existing blood product workshops is 600 tonnes. To meet its needs for rapid plasma harvest volume growth and for manufacturing other new products in the future, the Company plans to build a new smart factory with an annual input of 1.8kt plasma. In this way, it will optimize and upgrade its business scale and products. CR Boya Bio-pharmaceutical is one of China's pharmaceutical companies with the most comprehensive blood product categories, with plasma revenue and net profit per tonne of plasma at the industry's leading level. As the Company's PCC and factor VIII have been approved for marketing, we believe that with more SKUs coming on the market in the future, the Company's portfolio of blood products will be further expanded, and that by enriching its product pipelines, it will further improve its comprehensive competitiveness.
Potential risks: Insufficient supply of raw materials; disappointing progress in R&D of new products; poor control of product quality; disappointing results of offering and investment project; goodwill impairment; intensifying market competition; slower-than-expected divestiture; and disappointing operations of Danxia Pharmaceutical.
Investment recommendation: CR Boya Bio-pharmaceutical is a leading manufacturer of blood products in China. In recent years, the Company's plasma harvest volume has increased steadily, and its comprehensive utilization rate of plasma has remained at the industry forefront. With CR Pharmaceutical becoming the controlling shareholder, the Company will expand its raw plasma supply capacity and may enter the "first echelon of blood products enterprises in China". The PCC and factor VIII will further increase the Company's earnings per tonne of plasma, while the construction of a new smart factory will break its capacity bottleneck. Considering all these, we believe that the Company has a clear visibility of steady earnings growth. Therefore, we estimate the Company’s 2023E/24E/25E ANPs to be Rmb517mn/604mn/680mn, corresponding to EPS forecasts of Rmb1.02/1.20/1.35. Referring to the 36x average 2023E PE (Wind consensus estimates) of comparable companies, Tiantan Biological Products (600161.SH), Hualan Biological Engineering (002007.SZ, excl vaccine business) and Weiguang Biological (002880.SZ), as well as based on absolute valuation results, we assign the Company 38x 2023E PE to derive a target price of Rmb39 and initiate coverage with a "BUY" rating.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。