Keqian Biology(SH:688526)2024-06-28 02:01Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [1][2]. Core Insights - The company, KQ Bio, is a leading player in the non-mandatory immunization pig vaccine sector, focusing on the research, production, and sales of veterinary biological products. It has a strong market position, ranking first in non-mandatory pig vaccines and second in non-mandatory veterinary biological products overall in China [1][28]. - The report emphasizes the potential recovery of the animal health industry driven by improved profitability in downstream farming, which is expected to enhance the demand for vaccines. The long-term trend indicates a shift towards higher quality and more effective vaccines due to the increasing scale of farming operations [1][11]. - The company boasts a robust R&D capability, led by a team that includes an academician from the Chinese Academy of Engineering. The R&D personnel account for 30.12% of the workforce, with a significant proportion holding master's or doctoral degrees [1][11][18]. - The report highlights the company's core products, particularly the pig pseudorabies vaccine and the dual vaccine for gastric and intestinal diseases, which have significant market shares. New product developments, such as the African swine fever vaccine and the cat trivalent vaccine, are expected to create new growth opportunities [1][11][34]. Summary by Sections 1. Company Overview - KQ Bio has over 20 years of experience in the veterinary biological products sector, with a diverse product range that includes 58 types of veterinary biological products. The company has achieved significant market recognition, particularly in non-mandatory pig vaccines [1][28][34]. 2. Animal Health Industry - The animal health industry is characterized by a "small but beautiful" service model, with demand influenced by the profitability and scale of farming operations. The report anticipates a recovery in the industry driven by improved profitability in the short term and a long-term trend towards consumption upgrades [1][11][57]. 3. Core Competitiveness and Future Development - The company has a strong R&D capability, with significant investments leading to a high proportion of R&D personnel. The dual approach of collaborative and independent research enhances its innovation capacity [1][11][18]. - The report identifies the company's leading products, such as the pseudorabies vaccine, which has a market share of 49%, and the dual vaccine for gastric and intestinal diseases, which holds a 57% market share. The introduction of new vaccines is expected to drive future growth [1][11][34]. 4. Profit Forecast and Valuation - The report projects significant revenue growth for the company, estimating revenues of 1.216 billion, 1.370 billion, and 1.548 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 479 million, 550 million, and 630 million yuan. The company is expected to benefit from the recovery in vaccine sales and the introduction of new products [1][7][10].