Hotgen(688068) 德邦证券·2024-11-27 05:23Investment Rating - The report initiates coverage on Hotgen Biotech (688068 SH) with an "Overweight" rating [2] Core Views - Hotgen Biotech's IVD business is steadily growing, with its chemiluminescence business entering a rapid expansion phase The company's core business has maintained stable growth, with a CAGR of 18% for conventional business revenue from 2019 to 2023 [2] - The company has built eight technology platforms, including bio-active raw material R&D, sugar capture, magnetic particle chemiluminescence, up-conversion luminescence, colloidal gold immunochromatography, enzyme-linked immunosorbent assay, molecular diagnostics, and instrument R&D, continuously deepening its IVDT business [2] - The chemiluminescence platform has entered a rapid expansion phase, with revenue increasing by 45% in 2023 The company's employee stock ownership plan for 2024-2026 sets a revenue CAGR growth target of 20% or higher [2] Business Development - Hotgen Biotech has a strong R&D focus, with a 24 3% R&D expense ratio in 2023 Many core technical personnel come from military research institutes [3] - The company has established multi-omics diagnostic technology platforms, including protein marker sugar chain exosomes and DNA methylation, and has entered the drug R&D field through three subsidiaries: Yaojing Gene, Shunjing Pharma, and Yujing Pharma [3] - Shunjing Pharma's FIC product, SGC001, has entered dual reporting in China and the US SGC001 is a monoclonal antibody targeting S100A8/A9, indicated for acute myocardial infarction (AMI), and is the first FIC drug globally [3] Financial Projections - The company is expected to achieve revenues of 545/655/784 million yuan in 2024-2026, with net profits attributable to the parent company of 3/55/94 million yuan The corresponding PE valuations for 2024-2026 are 1444/74/43 times [4] - The company's non-COVID business is expected to grow steadily, and the innovation drug pipeline of its subsidiaries is progressing, supporting the "Overweight" rating [4] Industry and Market Analysis - Hotgen Biotech's products cover a wide range of clinical fields, including inflammation, infection, cardiovascular diseases, bone metabolism, thyroid function, diabetes, hypertension, hepatitis, liver cancer, tumors, kidney injury, and gastric function, widely used in hospitals, community health service stations, and third-party testing centers [50] - The company has a comprehensive product portfolio in the clinical reagent sector, with 13 approved cytokine detection reagents, maintaining a leading position in the cytokine detection field [54] - The company's public safety detection reagents cover biosecurity, foodborne pathogens, fungal toxins, and infectious diseases, widely used in disease control centers, public security, firefighting, military, and food safety monitoring [55] Innovation and R&D - Hotgen Biotech has established multiple advanced technology platforms, including phage display antibody preparation, sugar capture, magnetic particle chemiluminescence, and up-conversion luminescence, through years of development and collaboration with research institutions [69] - The company's GlyExo-Capture® technology, used for the extraction of glycosylated extracellular vesicles, has shown significant potential in early cancer diagnosis and screening, particularly in liver cancer [71] - The company continues to promote the "Chinese Liver Health Project," improving liver disease diagnosis and treatment levels through innovative products like the C-GALAD II liver cancer risk prediction model [77] Drug Development - Shunjing Pharma, a subsidiary of Hotgen Biotech, focuses on innovative drug R&D, with SGC001, a first-in-class drug for AMI, entering clinical trials in both China and the US [81] - SGC001 has shown promising preclinical data, significantly reducing mortality, myocardial infarction area, and improving heart function in animal models [90] - The drug has received IND approval from the US FDA and clinical trial approval from China's NMPA, with Phase II trials expected to begin in 2025 [92]