Zhaoyan New Medicine (603127): The rapid growth of the safety assessment business and the clinical layout continue to advance

Zhaoyan New Medicine (603127): The rapid growth of the safety assessment business and the clinical layout continue to advance

Core Views The security assessment business will maintain rapid growth, and the construction of “Wuzhou Base + Chongqing Base” has long-term plans.

In 2018, the company increased the area of animal houses by approximately 1.

350,000 square meters, an increase of more than 70% a year.

At present, the company’s safety assessment business orders are very plentiful, and the new production capacity is also smooth. The conversion of experimental projects in the second half of the year is gradually settled. It is expected that the safety assessment business will maintain rapid growth.

In addition, the company invested in the construction of new drug evaluation centers in Guangzhou Wuzhou and Chongqing respectively. The Wuzhou base focuses on non-human primate experimental animal 南京夜网论坛 scientific research and production facilities, and the Chongqing base focuses on preclinical research and evaluation services.

Obviously, the construction of the company’s new capacity will effectively guarantee the supply of experimental animals, break through the existing capacity, and strengthen the coverage of the southern region.

The proposed acquisition of Biomere actively expands overseas markets and opens the ceiling of Anping.

In May this year, the company announced its intention to acquire US preclinical CRO Biomere for $ 27.28 million.

Currently, the total amount of transactions.

In our opinion, the significance of the company’s merger and acquisition lies in: 1) expanding the company’s visibility in the North American market and reaching the target customer group; 2) business collaboration.

The company 四川耍耍网 can undertake non-GLP business outsourced by Biomere.

For a long time, the company mainly focuses on domestic business (more than 95% in 18 years). Through Biomere’s expansion of the US market, it strives to break through geographical restrictions and raise the upper limit of safety assessment business.

The early advancement of clinical services is worth looking forward to.

The company’s strategy is to build a comprehensive CRO around early clinical and biopharmaceutical CRO / CMO based on the integration of GLP business with biopharmaceutical as the core.

It can be seen that the internationalization of the safety assessment business has taken the first step.

Early clinical: 1) The clinical trial base is under construction and will be launched during the year; 2) The clinical CRO team.

Expansion of the team is expected to be completed in the second half of the year; 3) Clinical biological sample analysis center.

The Taicang base laboratory is under construction and is expected to be completed within the year.

In summary, the clinical business will likely become a new growth point for the company’s performance.

Financial Forecast and Investment Suggestions Consider the company’s acquisition of Biomere. We re-forecast the company’s net profit attributable to mothers in 2019-2021.

55/2.

21/2.

9.7 billion (previous forecast: 1.

55/2.

10/2.

850,000 yuan), the corresponding EPS is 0.

97/1.

38/1.

86 yuan.

With reference to the comparable company’s estimates, maintain a 56x 2019 P / E ratio and a corresponding target price of 54.

32 yuan, maintaining the “overweight” level.

Risk Warning If the new business development is less than expected, it will adversely affect the company’s growth prospects.