As a vaccine company, kanghua bio's business situation is closely related to the industry. In January this year, the "14th Five-Year Plan" Pharmaceutical Industry Development Plan proposed to vigorously promote the research and development of innovative vaccine products, improve the technical level of new vaccine industrialization, and strengthen the layout of emergency vaccine technology, etc., with the intention of gradually promoting the development of the vaccine industry in the direction of high quality and innovation.
From January to June 2022, Kanghua Bio achieved operating income of 660 million yuan, an increase of 19.53% over the same period of the previous year; The net profit attributable to the mother was 316 million yuan, an increase of 25.18% year-on-year, and the non-net profit attributable to the mother was 301 million yuan, an increase of 23.6% year-on-year.
These performances were mainly due to the increase in sales of vaccine products and the increase in sales prices. In the first half of the year, the number of batches issued by Kanghua Bio's core product lyophilized human rabies vaccine (human diploid cells) was 3.8977 million, an increase of 151.11% over the first half of 2021.
Cut from the 2022 semi-annual report
However, it should be noted that compared with biological product companies such as Kangtai Biological (300601) and Zhifei Biological (300122), the structure of Kanghua Biological products is not very rich. In the first half of the year, the main business of Kanghua Bio is still lyophilized human rabies vaccine (human diploid cells) and ACYW135 group meningococcal polysaccharide vaccine, of which lyophilized human rabies vaccine (human diploid cells) is the main source of profit, achieving revenue of 645 million yuan, accounting for more than 97% of operating income, in 2021 and 2020, lyophilized human rabies vaccine accounted for 97.85% and 96.27% of revenue, respectively.
Cut from the 2022 semi-annual report
Lyophilized human rabies vaccine (human diploid cells) is a product independently developed by Kanghua Biology, which is still an exclusive product in China, because of its exclusivity, the gross profit margin is as high as 94.03%, and the overall gross profit margin of Kanghua Biology has remained above 93% in the past four years, and the degree of profiteering is comparable to that of Moutai (600519).
When an industry is very profitable, it will naturally attract new players to enter the game. According to the data disclosed in the semi-annual report of Kanghua Biology, 7 companies across the country have submitted clinical trial applications for human diploid cell rabies vaccine. If a potential competitor succeeds in developing and marketing a human diploid cell rabies vaccine, it may adversely affect the market share and selling price of the company's products.
In recent years, the number of rabies vaccines issued in the mainland has been 60 million to 80 million, and Kanghua Bio has issued about 4.795 million in 2021, accounting for 6%-8%.
Judging from the SGI index score of Hexun, Kanghua Bio fluctuated between 73-85 points, scoring 81 points in the first quarter.
From the perspective of profitability, the weighted average return on net assets of Kanghua Bio fell to 11.25%, compared with 12.09% and 27.43% in the same period of 2021 and 2020, respectively; Gross profit margin and net profit margin increased respectively over the same period last year, 93.92% and 47.85% in the first half of this year, respectively, and 92.22% and 45% in the same period last year, respectively.
The increase in gross profit margin and net profit margin was mainly due to the reasonable control of Kanghua Biological expenses, on the basis of the increase in revenue by 19.53% year-on-year, operating costs only increased by 14.12% year-on-year to 40.14 million yuan, and sales expenses and administrative expenses increased by -0.83% to 153 million yuan respectively, an increase of -9.85% to 39.6 million yuan. Selling expenses encroach on net profits, accounting for 48% of net profits.
However, it should be noted that although R&D investment increased by 98.05% year-on-year to 68.19 million yuan, it was still lower than the sales expense. The proportion of R&D investment in operating income increased from 6.14% in the same period last year to 10.34% in the first half of this year.
Kanghua Bio has 111 R&D personnel, including 7 doctors and 7 senior titles. The R&D site covers an area of about 14,000 square meters, with animal test centers, a number of pilot production lines, R&D laboratories, R&D quality control laboratories, etc. At present, a number of innovative vaccine platforms have been laid out, such as mRNA vaccine platform, recombinant protein VLP vaccine platform, recombinant adenovirus vaccine platform, and multiple innovative vaccine platforms.
From the perspective of cash flow, the net cash flow generated by Kanghua Bio's operating activities was -66.99 million yuan, down 248.60% year-on-year, the company explained that it was due to the increase in investment in research and development projects. From the perspective of accounts receivable, from 2017 to 2021, it was 105 million yuan, 251 million yuan, 277 million yuan, 353 million yuan and 837 million yuan, and in June this year, it rose to 1.097 billion yuan, accounting for -10.15% of operating income, down from -3.43% in the same period last year. At the same time, the number of days of accounts receivable turnover is 263.89 days, higher than the 155.66 days of the same period last year, and the speed of payment collection needs to be accelerated.
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