WANTAI BIOLOGICAL(SH:603392) Jin Rong Jie·2025-04-17 11:45Core Viewpoint - WanTai Biologics (603392.SH) reported its worst financial performance since its IPO, with a significant decline in revenue and profit, highlighting deep-seated strategic and risk management issues in the face of a changing HPV vaccine market landscape [1][3]. Financial Performance - The total revenue for 2024 was 2.245 billion yuan, a year-on-year decrease of 59.25% from 5.511 billion yuan in 2023 [2]. - The net profit attributable to shareholders was 106 million yuan, down over 90% from 1.248 billion yuan in 2023, reflecting a year-on-year growth rate of -91.49% [2]. - The non-recurring net profit turned negative at -186 million yuan, a stark contrast to the 1.078 billion yuan in 2023, with a year-on-year growth rate of -117.29% [2]. - The vaccine segment revenue plummeted to 606 million yuan, a decrease of 84.69% compared to the previous year [2][3]. Market Dynamics - The HPV vaccine market has undergone significant changes, with increased competition from Merck's nine-valent HPV vaccine, which expanded its target demographic, severely impacting the market space for two-valent vaccines [3]. - The price of WanTai's two-valent HPV vaccine dropped to 86 yuan per dose, a reduction of over 73%, leading to a decline in gross margin from 91.6% in 2023 to 70.43% in 2024, a decrease of 21 percentage points [3]. R&D and Competitive Position - WanTai's R&D expenses reached 886 million yuan in 2024, accounting for 44.02% of revenue, as the company focuses on developing the nine-valent HPV vaccine and mRNA technology [6]. - The company is lagging behind competitors like Watson Biologics in the development of the nine-valent vaccine, which is currently in phase III clinical trials [6]. - There are concerns about the risk of technological obsolescence, as the supply of Merck's nine-valent vaccine in China has increased significantly, and domestic mRNA vaccine development is accelerating [8]. Strategic Challenges - Following the decline in the vaccine business, WanTai is attempting to pivot towards its diagnostics segment, which achieved 1.433 billion yuan in revenue, a 7.66% increase year-on-year, but faces stiff competition from established players [9]. - The company has initiated international expansion, with its vaccine entering markets like Angola and Nepal, but these efforts are insufficient to offset domestic losses [9]. - WanTai's financial position is strained, with a net cash flow from operating activities of 355 million yuan, down 76.91% year-on-year, and accounts receivable reaching 2.041 billion yuan, indicating weakened bargaining power [8]. M&A and Future Outlook - The company is exploring strategic mergers and acquisitions to enhance its market position, focusing on innovative technologies in the vaccine and diagnostics sectors [10]. - However, with only 1.87 billion yuan in cash reserves and ongoing cash flow issues in the vaccine business, the feasibility of these plans remains uncertain [10].