Zhaoyan New Drugs for Serialization of Pharmaceutical Outsourcing Industry (603127): Looking at Zhaoyan New Drugs Business Development Path from the First Overseas Acquisition

Zhaoyan New Drugs for Serialization of Pharmaceutical Outsourcing Industry (603127): Looking at Zhaoyan New Drugs Business Development Path from the First Overseas Acquisition

Report Summary: The first overseas acquisition of CRO by Anping revealed what industry path interpretation?

Significance of the first overseas acquisition: to enhance brand power and lay a solid foundation for the company’s leapfrog development. On May 17, 2019, Zhaoyan New Pharma announced the “Announcement on the Cash Acquisition of 100% Equity of Biomere in the United States”.100% equity.

The company is a pre-clinical CRO company established in the United States for 23 years. Its main business is pre-clinical CRO business and vaccine research and development business.

The pre-clinical CRO business 返回码: 500 网站打不开?重查 includes GLP business and non-GLP business. At present, the company employs about 100 people, and the area of laboratories and animal houses is about 8,268 square meters. At the time of the transaction, Biomere will only have the CRO business. The alternative transfer business is the deliveryOne of the preset conditions.

As a safety evaluation of the onshore expansion business, we believe that the current short-term core logic of the domestic safety evaluation pharmaceutical CRO company benefits from the domestic market dividend, and the opening of the medium and long-term closure depends on scale development.

We believe that Zhaoyan New Drug’s international development is an exploratory change to achieve leapfrog development, which is conducive to improving its domestic and foreign brand power and customer acquisition capabilities.

Industry Logic: As the CRO expands its business onshore, the core logic of the short-term and medium-term is the Chinese market dividend. The improvement of the medium- and long-term layout is to enhance the participation of the global supply chain through international development. On May 15, 2019, we released the depth of medical care.The report “Under the logic of dividends in the Chinese market, the flexibility of pharmaceutical expansion companies is different.”The long-term focus is to enhance international competitiveness and enjoy the increasing dividends of global market R & D. ”

We believe that the safety assessment business is a one-time, onshore expansion business. The core logic of the pharmaceutical outsourcing company in China is to benefit from the dividends of the Chinese market and the ability to develop internationally in the long term.

Company logic: the market boom period, focus on production capacity expansion, international expansion to enhance brand strength 1) focus on the main business of assessment, personnel and animal houses, can not be ignored: for the company’s production capacity, we remind investors: personnel and animal propertyBoth deserve important attention.


In the course of the company’s financial DuPont analysis, we found that the company’s asset turnover rate was relatively stable, basically around 40%, while the fixed asset turnover rate was 1 in 2014.

06 increased to 1 in 2018.

59, we previously found that the average fixed assets went from 1.

740,000 yuan increased to 2.

5.7 billion, we think that the increase in the turnover rate of fixed assets is related to the company’s current development stage (order structure and order scheduling have a significant impact), and looking at the growth rate of personnel, we find that there are still personnel in 2014-2018Compound growth rate reached 13.

3% (495 employees in 2014, 817 employees in 2018, and 65% increase in personnel capacity), the increase in 122% of revenue from 2014 to 2018, the increase in fixed assets and personnel capacity contributed significantly to the increase.

Therefore, we recommend that in the tracking of the company, we must obtain the development progress of both personnel and fixed assets; 2) Variables of short-term performance indicators: advance receipts, inventory: We believe that changes in “inventory” items can basically reflect short-term company performanceFor example, the “inventory” in the first quarter of 2019 reached a new record high. We estimate that the “unfinished topic cost” has also reached a new record high, and it indicates that the company’s short-term performance trend should not change, although the short-term due to the expense side, the baseFor some reasons, the growth rate of the first quarter of 2019 is slightly lower, but we are optimistic about its performance continuity; 3) Business model development: upstream and downstream development and accelerated international development, we are more concerned about the impact of international development on the competitiveness of the companyImpact: We believe that the short-to-medium-term space of the safety assessment business is still the dividend of the rise of the domestic innovative drug research and development market, but from another perspective, the core barriers or brand building of the domestic market dividend period also affect whether the domestic market dividend can be better enjoyed.Plays a very important role, so we think购Also worth focusing on, we are more inclined to understand that this is a tentative move the company by leaps and bounds.

Investment recommendations We expect the company’s EPS to be 0 in 2019-2021.

94, 1.

30, 1.

80 yuan, corresponding to 49 times PE in 2019 (36 times PE in 2020) according to the closing price on May 17, 2019, with reference to comparable company valuations and the company’s industry-leading level, the first coverage, given a “recommended” rating.

Risk reminders: the volatility risk of short-term order execution, the risk of improper control of accounts receivable brought by the increase of large contracts, and the risk of changes in drug approval policies.