Hotgen(688068) 中邮证券·2024-12-09 01:04Investment Rating - Buy rating for Rejing Biotech (688068) with first-time coverage [2] Core Views - Rejing Biotech is transitioning from specialty diagnostics to innovative drug development, aiming for a full industry chain strategy [5] - The company is expected to achieve revenues of 543/655/792 million yuan in 2024-2026, with net profits of 3/59/99 million yuan, and EPS of 0.04/0.64/1.07 yuan/share [5] - The current stock price corresponds to a PE ratio of 1759.7/97.8/58.7 times for 2024-2026 [5] IVD Business - Rejing Biotech has 19 years of experience in the IVD market, with leading diagnostic products in hepatitis, liver cancer, early cancer screening, and neurodegenerative diseases [5] - The company's single-use chemiluminescence products address pain points in grassroots testing, with rapid business growth [5] - The company has developed three major "National Health Projects" based on advanced glycocapture technology, focusing on liver, brain, and cancer health [5] - The company's chemiluminescence platforms, including MQ60 and C800/C900 series, cover a wide range of diagnostic needs [11] - The company has installed over 13,600 testing units of its single-use chemiluminescence immunoassay analyzers (MQ series) by June 30, 2024 [12] - The company's up-conversion luminescence technology platform is widely used in public safety, with products applied in major national events [14] Glycocapture Technology - Rejing Biotech has developed a comprehensive liver health management platform, covering the entire process from hepatitis to liver cancer diagnosis [15] - The company's "National Liver Health Project" includes diagnostic tools, early screening, and AI-based risk prediction models [15] - The global liver disease diagnosis market is expected to reach $21.29 billion by 2030, with a CAGR of 6.7% from 2024 to 2030 [17] - The company's CK18 chemiluminescence detection product, the first of its kind in China, has potential applications in fatty liver and weight loss clinics [19] - The company's glycocapture technology is also applied in cancer early screening, with products like GlyExo-Capture® and EXO-01 for exosome detection [22] - The company has established a "National Brain Health Project" focusing on Alzheimer's and Parkinson's diseases, with collaborations with leading research institutions [23] Innovative Drug Business - Rejing Biotech's subsidiary, Shunjing Pharmaceutical, has received IND approvals in both China and the US for its FIC product SGC001 (Dujipumab), a monoclonal antibody for acute myocardial infarction (AMI) [28] - SGC001 is the first-in-class drug for AMI, with potential to revolutionize emergency treatment for heart attacks [30] - The company has also established the "X-Gen AI Drug Discovery and Design Research Center" to accelerate new drug development [31] Financial and Equity Incentives - Rejing Biotech's revenue and net profit have been under pressure in 2023-2024 due to the high base effect from COVID-19 testing product sales [33] - The company's R&D expenses accounted for 20.0% of revenue as of June 30, 2024, with a cumulative investment of 77.2 million yuan [35] - The company has launched a new employee stock ownership plan, with a target revenue CAGR of 20% from 2024 to 2026 [39] Profit Forecast and Investment Recommendation - Rejing Biotech is expected to achieve significant growth in the coming years, driven by its innovative products in both IVD and drug development [42] - The company's revenue is projected to grow from 543 million yuan in 2024 to 792 million yuan in 2026, with net profits increasing from 3 million yuan to 99 million yuan [42]