Zhitong Financial APP News, Puluo Pharmaceutical (000739. SZ) received more than 90 institutions for research on January 10, including a number of well-known private equity, large insurance funds and star managers, including Xie Zhiyu, a Xingquan fund with a scale of nearly 100 billion yuan under management. During the survey, the company said that the production capacity is expanding rapidly, the high-activity workshop will be put into use in the first quarter of 2022, and another larger multi-functional unitary flexible workshop is expected to be put into use around September-October 2022.
According to Wind statistics, since January, 154 institutions have conducted research on Puluo Pharmaceutical, among which star fund managers such as Xie Zhiyu and Housewarming of Industrial Fund have participated in the company's research activities in the form of conference calls, well-known private equity such as Gao Yi Asset, Chongyang Investment, Xingshi Investment, Tamsui Spring Investment, as well as large-scale insurance funds such as China Life Assets, PICC Assets, and Taikang Assets have also appeared in the institutional research list. It is worth noting that Puluo Pharmaceutical is the target of Xie Zhiyu's fund heavy holding, Xingquan Herun held 28.1899 million shares of Puluo Pharmaceutical at the end of the third quarter, and Xingquan Heyi held 21.1566 million shares. However, during the third quarter of last year, xie Zhiyu's two funds reduced their holdings in part of Puluo Pharmaceutical. But this does not affect Xie Zhiyu's attention to Puluo Pharmaceutical, after the reduction, last October, Xie Zhiyu personally participated in the research of Puluo Pharmaceutical, and Xie Zhiyu appeared in the survey for the first time after the beginning of this year, and it appeared on the company's list.
In an interview, Puluo Pharmaceutical said that from the beginning of September to October 2021, the price of raw materials increased significantly, the company adjusted the pricing strategy for some products in a timely manner and was also accepted by customers, and the operating income in the fourth quarter created a record high. The company said that whether the price of the product can be adjusted or determined by the supply and demand relationship and competitiveness of the product, and the price of raw materials will always have cyclical fluctuations, we should pay more attention to how to increase the competitiveness of the product, rather than paying too much attention to the short-term rise and fall of the price.
When introducing the business situation, the company said that the CDMO business has gradually increased with the gradual increase of more projects, quotation projects, running projects, phase III clinical projects, API projects and registered intermediate projects. CdMO business is affected by shipments, product structure, etc., and it is normal for the gross profit margin to fluctuate in the quarter, so don't pay too much attention to the gross profit margin of a single quarter. However, in the long run, it is reasonable to maintain the gross profit margin between 40% and 50%. In addition, the company's production capacity is also expanding rapidly, and in October 2021, the company's first multi-functional flexible workshop will be put into use; another high-activity workshop will also be put into use in the first quarter of 2022. Another larger multifunctional united flexible workshop is also expected to be put into use around September-October 2022. R & D, by the end of 2020, the company's R & D personnel has increased to more than 800 people, The second R & D building of Shanghai CDMO is expected to be officially put into operation after the Spring Festival, and the CDMO R & D building in Hengdian is also under construction, and it is expected to be put into use by the end of 2022.
The variety metoprolol that the company participated in the subsequent collection has three mainstream specifications, and the competition situation is better. There are not many companies that have passed the consistency evaluation of this variety, and the preparation process is also difficult. In addition, the company is the only manufacturer of Metoprolol intermediates in China, and the API production capacity is also the largest, so the company's competitive advantage in this product is obvious. Cefixime granules and cefixime tablets are also the company's api preparation integrated varieties, API is currently the world's largest, the preparations were previously sold in the third terminal, the hospital market is almost zero, after entering the collection, the hospital market will be a relatively large increment for the company.
In terms of the classic formula project of traditional Chinese medicine, the company currently has 6 varieties of classic formulas under research, and the sales volume of traditional Chinese medicine business is currently small. The company will also continue to promote the work of classic recipes and further promote the sales and promotion of the original exclusive varieties in accordance with the relevant policies of the state to encourage traditional Chinese medicine.
When asked about the globalization of cephalosporin API, the company said that cephalosporin is a rigid demand, and the layout must be global. At the current stage of the company, cephalosporin intermediates include side chains and parent nuclei exported overseas, and the company will have a global layout with a combination of "API + preparations" in the future. In order to further enhance the competitiveness of the product, the company is strengthening the construction of side chains and parent nuclei, including scientific and technological research and capacity expansion.
The specific research content is as follows:
First, Mr. Zhu introduced the main operation of the company
In 2021, affected by the continuous impact of the epidemic, especially overseas, not only the business side is facing large fluctuations in the RMB exchange rate, but also some difficulties in international transportation. In the face of many difficult factors, the company has still achieved good results with the joint efforts of all cadres and employees. The CDMO business maintained rapid growth, and the API business recovered well and remained stable overall, both of which were in line with expectations. The formulation business was slightly affected and recovered more slowly, and the company's metoprolol project was affected by the epidemic, and the FDA audit has been delayed. In addition, from the beginning of September to October, the price of raw materials rose sharply, the company adjusted the pricing strategy for some products in a timely manner and was also accepted by customers, and the operating income in the fourth quarter created a record high.
Specific three business conditions: CDMO business with the gradual increase of more projects, quotation projects, running projects, phase III clinical projects, API projects and registered intermediate projects have increased significantly. Due to the enhancement of the company's ability in the R&D end, the overall number of CDMO projects is increasing, and there are more projects that have been transferred to commercialization, and the company is very confident in the rapid growth of CDMO business. In addition, the company's production capacity is also expanding rapidly. In October 2021, the company's first multi-functional flexible workshop was put into use; another high-activity workshop will also be put into use in the first quarter of 2022. Another larger multifunctional united flexible workshop is also expected to be put into use around September-October 2022. R & D, by the end of 2020, the company's R & D personnel has increased to more than 800 people, The second R & D building of Shanghai CDMO is expected to be officially put into operation after the Spring Festival, and the CDMO R & D building in Hengdian is also under construction, and it is expected to be put into use by the end of 2022. In terms of R&D and production capacity, it ensures that the company's CDMO business will continue to grow rapidly in the future. APIs were greatly affected in the second and third quarters of 2021, and the recovery in the fourth quarter was more obvious. In terms of new technologies: the first commercial workshop of the fluid chemistry engineering technology platform has been put into use, and more fluid chemistry commercial workshops are under renovation and construction, and there will be more applications next year. Synthetic biology and enzyme catalytic engineering technology platform construction, through enzyme catalysis to solve the problem of some existing products, such as the original chemical catalysis to enzyme catalysis, there are many new products have landed on the use of enzyme catalysis; synthetic biology, including the selection and transformation of enzymes themselves, there are some products directly made of fermentation are also undergoing a large number of strain transformation, gene editing, transformation. The company has nearly 100 R & D personnel in biology, related laboratories have been put into use for nearly a year, and the strategic cooperation with Shanghai Jiao Tong University and Zhejiang University of Technology is centered on synthetic biology, which will bring great benefits to future development. The recovery of the preparation in 2021 is slightly slower, but with the company's subsequent participation in the next round of collection of several more competitive core varieties and the recovery of sales of the original varieties, we are more optimistic about the recovery of the preparation business. In accordance with the development concept of strong scientific and technological research and development, the company invested nearly 500 million yuan in research and development in 2021, an increase of 38% year-on-year, and the intensity of research and development investment is very large, which is an important cornerstone of the company's long-term sustainable development in the future.
II. Question-and-Answer Session:
Q: The company made a price strategy adjustment in October, is the impact obvious?
A: The sharp increase in the price of raw materials began in mid-September, which promoted the subsequent price adjustment, but whether the product can be adjusted is still determined by the supply and demand relationship and competitiveness of the product. Some of our products have also been accepted by customers this time, indicating that our products still have certain advantages. However, the price adjustment that began in mid-October, we did not execute it immediately, the original contract still needs to be completed, the real price adjustment execution is still in November, and by December it has been basically implemented in place. However, the price of raw materials will always fluctuate cyclically, and we should pay more attention to how to increase the competitiveness of products, rather than paying too much attention to the short-term rise and fall of prices.
Q: What is the gross profit margin of the company's CDMO business?
A: CdMO business is affected by shipments, product structure, etc., and it is normal for the gross profit margin to fluctuate in the quarter, so don't pay too much attention to the gross profit margin of a single quarter. However, in the long run, it is reasonable to maintain the gross profit margin between 40% and 50%.
Q: What are the competitive advantages of different companies in synthetic biology research?
A: The company's layout is relatively early, and there are not many enterprises in China that can do a good job in both aspects of biological fermentation and chemical synthesis, and we have maintained a relatively good competitiveness in these two aspects. In recent years, with the advancement of gene sequencing technology and gene editing technology, the research process of synthetic biology has been greatly accelerated. The company also began to cooperate with Shanghai Jiaotong University and Zhejiang University of Technology a year or two ago. Research in this area can bring about a significant reduction in costs, and can better meet the needs of "carbon neutrality and carbon peaking", which is more in line with the direction of the times. In the next few years, the company will also invest more resources in this regard, and the two larger API projects added by the company will also apply this technology.
Q: Will the varieties of preparations participating in the subsequent collection affect the company?
A: The variety of metoprolol that the company participated in the subsequent collection has three mainstream specifications, and the competition situation is better. There are not many companies that have passed the consistency evaluation of this variety, and the preparation process is also difficult. In addition, the company is the only manufacturer of Metoprolol intermediates in China, and the API production capacity is also the largest, so the company's competitive advantage in this product is obvious. Cefixime granules and cefixime tablets are also the company's api preparation integrated varieties, API is currently the world's largest, the preparations were previously sold in the third terminal, the hospital market is almost zero, after entering the collection, the hospital market will be a relatively large increment for the company.
Q: How about the expansion of the company's R&D personnel?
A: The company currently has more than 800 R & D personnel, the goal is to reach more than 1,300 people by the end of 2022, and the long-term goal is to reach more than 2,000 people in 2025, of which about 60% are CDMO R&D personnel.
Q: What is the globalization strategy of cephalosporin API?
A: Cephalosporin is a rigid demand, and the layout must be global. At the current stage of the company, cephalosporin intermediates include side chains and parent nuclei exported overseas, and the company will have a global layout with a combination of "API + preparations" in the future. In order to further enhance the competitiveness of the product, the company is strengthening the construction of side chains and parent nuclei, including scientific and technological research and capacity expansion.
Q: What kind of technological progress will be brought about by the establishment of the company's overseas CDMO R&D center and strategic cooperation with universities?
A: The company's CDMO R&D center is set up in Boston, the United States, Boston is the global innovative drug talent, technology highland, many of the company's customers are also there, the purpose of setting up boston CDMO R & D center is mainly to do some cutting-edge services for customers, and then gradually transfer to China in the later stage. We have also had several Boston-based Biotech companies sign cooperation agreements with us. The core of the cooperation with Shanghai Jiao Tong University and Zhejiang University of Technology is synthetic biology, through product-centric research, including the construction of enzyme banks, enzyme screening, etc., the construction of the entire technology platform, which has also been effective, but it will take some time to move to the process of commercialization. Cooperation with Shanghai University of Technology is mainly fluid chemistry, their engineering experience is very rich, can help us do a large number of existing projects of fluid chemistry transformation, but also for the company's automation transformation to provide a lot of technical support. The company will combine the development of its own technology with external technical cooperation to make it produce the best effect.
Q: Is the increase in subsequent projects mainly from commercialization or the transfer of projects?
A: The main part of the increment is the commercial supply of the original project after the transfer is landed. The company has only been taking on some early projects in the last two years, and these projects still need some time to reflect in sales.
Q: How is the company's traditional Chinese medicine classic formula project advancing?
A: The company currently has 6 classic formula varieties under research, and the sales volume of the Traditional Chinese medicine business is currently small. The company will also continue to promote the work of classic recipes and further promote the sales and promotion of the original exclusive varieties in accordance with the relevant policies of the state to encourage traditional Chinese medicine.
Q: What are the company's future plans for intelligent manufacturing?
Answer: The domestic pharmaceutical manufacturing industry is relatively backward in intelligent manufacturing, the main reason is that in the past the industry was relatively scattered and not concentrated enough, and with the gradual concentration of the industry in the past two years, continuous, automated, and information technology has been deeply applied in the pharmaceutical industry. In recent years, the company's investment in these aspects is still relatively large, including strategic cooperation with Zhejiang Zhongkong, etc., the company will first start from continuousization to informatization, and then gradually move towards intelligent manufacturing.
[Disclaimer] The stock market is risky and you need to be cautious when entering the market. This information is derived from the investor activity record form issued by the enterprise, the text is slightly collated, does not constitute investment advice, the original record and more information Please refer to the relevant announcement of the enterprise.
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