NKF(603707) 天风证券·2024-10-08 06:00Investment Rating - The report initiates coverage on the company with a "Buy" rating, setting a target price of 18.15 RMB for 2025, based on a 25x PE ratio [5][7] Core Views - The company has successfully transitioned from being primarily an API producer to a formulation-focused business, with overseas formulations expected to drive high growth [1] - As the global leader in heparin API, the company is expected to maintain stable revenue in this segment as heparin prices stabilize [2] - The company's international capabilities in injectable formulations are leading in China, with 69 ANDA approvals as of July 2024, the highest among domestic companies [3] - The company is diversifying into biosimilars, with four biosimilar candidates in Phase I clinical trials and strategic partnerships in insulin development [4] Financial Projections - Revenue is projected to grow from 4.33 billion RMB in 2024 to 6.49 billion RMB in 2026, with a CAGR of 21.1% [5] - Net profit attributable to shareholders is expected to increase from 802.85 million RMB in 2024 to 1.52 billion RMB in 2026 [5] - The company's EPS is forecasted to grow from 0.50 RMB in 2024 to 0.94 RMB in 2026 [6] Heparin Business - The company is the global leader in heparin API, with exports stabilizing around $5,000/kg in H1 2024 after a price decline from pandemic highs [2] - Heparin API revenue has been declining since 2020 due to inventory destocking and formulation business focus, but is expected to stabilize [35] - The company has passed multiple international quality certifications, including FDA, EDQM, and PMDA [36] Formulation Business - The company has 69 ANDA approvals for injectables as of July 2024, leading among Chinese companies [3] - Domestic formulation business has been impacted by volume-based procurement, but the company maintains leading market shares in several low molecular weight heparin products [43] - The company has been successful in national centralized procurement, winning bids for several key products [48] International Expansion - Through its subsidiary Meitheal, the company has established a strong presence in the US injectable market, leveraging GPO and IDN/PN channels [54] - The company has made strategic acquisitions and partnerships to expand its product portfolio, including albumin-bound paclitaxel and adalimumab biosimilar [4][64] - Meitheal's local expertise in the US market has significantly enhanced the company's R&D and regulatory capabilities [61] Biosimilar Business - The company has four biosimilar candidates in Phase I clinical trials and has entered into partnerships for insulin development [4] - The company acquired the US commercialization rights for adalimumab biosimilar Yusimry for $40 million in June 2024 [4] - The biosimilar market is expected to grow rapidly, with global sales projected to reach $164.4 billion by 2030 [72] Quality and Regulatory - The company has a strong track record of passing FDA inspections, with multiple facilities and products receiving approvals [59] - The company's high-quality standards and advanced manufacturing technologies have established it as a leader in sterile injectables [59]