On January 19, Tuoxin Pharmaceutical (301089. SZ) shares continued to reach new highs, touching 135 yuan / share during the session, and then closed down 4.13% due to market sentiment.
Since its listing, Tuoxin Pharmaceutical has risen by more than 300%, and its market value has soared from nearly 3.3 billion yuan to 14.87 billion yuan, which can be called the leader of the pharmaceutical sector and the "shoulder handle" in the sub-new stocks.
New crown medicine has become a market outlet
Under the raging spread of the Omiljung variant, not only the daily new crown diagnosis in the world has reached a new high, but also the domestic epidemic has also appeared in multiple outbreaks. Behind this is the inadequacy of the previous COVID-19 epidemic prevention model, which was only built by vaccination, in the face of constantly mutating viruses.
The new wave of the epidemic has made the world more and more aware that vaccines alone are not enough. If vaccines can't completely stop the spread of the virus, then the combination of "COVID-19 vaccine + COVID-19 treatment" may be the key to humanity's final victory over the epidemic.
And the bullishness of Tuoxin Pharmaceutical is soaring precisely because of the new crown drug.
On 4 November, Merck/Ridgeback announced that the UK Medicines and Healthcare Products Regulatory Authority (MHRA) has approved the listing of Molnupiravir (MK-4482, EIDD-2801) in the UK for the treatment of adult patients with mild to moderate COVID-19 at higher risk of severe illness and hospitalization.
Molnupiravir is the world's first oral antiviral drug approved for the treatment of mild to moderate COVID-19 in adults. Therefore, the drug is also called "new crown miracle drug" by many people.
Tuoxin Pharmaceutical previously said on the interactive platform on November 2 that the company's product uridine is the raw material for the production of EIDD-2801, and EIDD-2801 is the raw material for the production of the new crown oral drug Molnupiravir.
This "ambiguous" reply immediately triggered a hot discussion in the market, and the company's stock began to rise continuously from November 5, often 20% up and down, out of the strong market of 6 days and 5 boards.
Unexpectedly, Tuoxin Pharmaceutical said that it had not signed any cooperation agreement with Merck, did not have any direct cooperative relationship with it, and the promotion and approval of Molnupiravir had no direct impact on the sales volume of uridine intermediates and the company's performance.
However, this can not prevent its stock price from rising, from January 13, Tuoxin Pharmaceutical once again opened the upward trend, within 5 days the stock price rose by 65%, continue to break through the previous new high. This is also the characteristic of A shares, the company said no, but the shareholders think "you have".
And it involves "new AIDS drugs"
It is worth mentioning that Tuoxin Pharmaceutical is also related to another new AIDS drug, Azfedine.
Recently, CCTV reported that the new HIV drug azifristine has the effect of inhibiting the replication of the new crown virus, and phase III clinical trials of azifedine treatment of the new crown virus are being carried out at home and abroad.
It is understood that Azfedine, jointly developed by Henan True Biotechnology Co., Ltd., the team of Professor Chang Junbiao of Henan Normal University, and Peking Union Pharmaceutical Factory, is an effective candidate drug against the new crown virus with independent intellectual property rights in the mainland, and is also the world's first dual-target anti-AIDS class new drug.
Tuoxin Pharmaceutical once said on the investor interactive platform that the company is a manufacturer of APIs of Azvedine, but there is no clinical data on the treatment of new crown pneumonia.
This has further stimulated the rise in the stock price of Tuoxin Pharmaceutical, and even some investors have sharply raised their stock price expectations for Tuoxin Pharmaceutical.
On November 20, the company further responded on the investor interaction platform that the company did not sign a supply contract with Peking Union Pharmaceutical Factory, and at present, only the subsidiary Xinxiang Pharmaceutical Azifdine API passed the related review with the Azif customized agent, but did not participate in the clinical study of the preparation.
Performance is at the test
Founded in August 2001, the company integrates chemical synthesis, biological fermentation nucleoside (acid) API and pharmaceutical intermediates research and development, production and sales as one, the main products are pyrimidine series, purine series, nucleotide series, nucleoside series and other series of nucleoside (acid) products, mainly covering the field of antiviral, anti-tumor and nervous system drugs.
In the years of production and operation, Tuoxin Pharmaceutical has formed an integrated industrial chain of "chemical raw material input - pharmaceutical intermediate production - API preparation". In 2020, its API business contributed approximately 40% of revenue and 45% of profits.
Recently, the National Development and Reform Commission and the Ministry of Industry and Information Technology issued the "Notice on The Implementation Plan for Promoting the High-quality Development of the API Industry", chemical RAW materials are the basic raw materials and active ingredients of drugs, and are an important part of the pharmaceutical industry.
The notice pointed out that by 2025, the mainland will develop a number of high-value-added and high-growth varieties, break through a number of green and low-carbon technology and equipment, cultivate a number of internationally competitive leading enterprises, and create a number of industrial agglomeration areas and production bases with global influence. Tuoxin Pharmaceutical has obviously benefited from the industrial trend of APIs.
In terms of performance, from 2018 to 2020, Tuoxin Pharmaceutical achieved revenue of 391 million yuan, 386 million yuan and 528 million yuan respectively, and the net profit attributable to the mother was 63.2274 million yuan, 61.2518 million yuan and 113 million yuan, respectively, of which the growth rate of the net profit attributable to the mother in 2020 was as high as 84.16%.
However, in the first three quarters of 2021, Tuoxin Pharmaceutical achieved a main revenue of 388 million yuan, down 3.07% year-on-year. Its net profit attributable to the mother was 65.8856 million yuan, down 22.36% year-on-year.
For the decline in performance, Tuoxin Pharmaceutical explained in the reply to the letter of concern that the main reason was caused by the increase in the price of upstream raw materials, the increase in employee salaries, and the relocation of its subsidiary Xinxiang Pharmaceutical; at the same time, due to the impact of the epidemic, the company's overseas sales increased by air transportation, resulting in an increase in transportation costs; and the increase in R&D investment led to an increase in R&D expenses. Previously, in the prospectus, Tuoxin Pharmaceutical predicted that the performance of the first three quarters would decline, and it expected that the revenue in the first three quarters of 2021 would fall by 6.57%-0.94%, while the net profit attributable to the mother would fall by 23.41%-11.72%.
Overall, the company's performance in recent years has been relatively average, with a relatively small scale and growth rate.
In addition, from 2018 to 2020, the gross profit margin of Tuoxin Pharmaceutical was 45.37%, 41.17% and 42.60% respectively. However, in the first three quarters of 2021, the gross profit margin of Tuoxin Pharmaceutical declined, reaching 39.14%.
Conclusion ——
Tuoxin Pharmaceutical has just been listed on the face of a decline in performance, but the stock price is standing on the market outlet, in just over 2 months, has risen 3 times, in the long run, the prospects of the API industry are good. However, there are many sub-categories in the field of APIs, the industry competition pattern is unstable, and whether Tuoxin Pharmaceutical can have sufficient strength still needs long-term tracking.
This article originated from Caihua Network