Biological Stock (600201): Ascends to Yuanyuan, China’s animal vaccine leader expected to continue to grow

Investment suggestions We are optimistic about the investment opportunities of biological shares: 1) The performance of the animal protection industry is expected to improve during the cyclical period, and the scale of breeding promotes the long-term expansion of the industry; 2) The company has a competitive advantage in production, sales and services, leading the industryDevelopment; 3) In the long run, we believe that the company will replace the single product leader and turn to the mobile insurance platform, which has significant space for future development.

Reasons Industry performance is expected to change, and long-term growth is deterministic: from the perspective of cyclical nature, the animal vaccine industry matches the hog breeding cycle, which is transformed into a “post-cycle” attribute. As the production capacity of large-scale breeding companies recovers, we judge that the industry performance in 2020 has opportunities for transformation.
In terms of growth attributes, the animal vaccine industry is dominated by large breeding companies, and the large-scale trend of pig breeding is determined, which will promote the market expansion of the animal vaccine industry.

In addition, we believe that the African swine fever epidemic has raised vaccine expectations, boosted industry investment sentiment in the short term, and has long-term commercial market potential.

Lead the development of the industry in many ways, and the competitive advantage is outstanding: As a leader in animal vaccines, the company has formed a competitive advantage in many ways.

In terms of production technology, the company has advantages in suspension culture, concentration, and purification. It also has quantitative detection and full-cycle protection technology, which leads to product quality leadership.

In terms of sales channels, the company cuts into large customers through direct sales. At present, it has basically covered and covered large-scale pig breeding enterprises. At the same time, it has expanded its secondary network through distribution and tapped potential markets.

In terms of technical services, the company took the lead in launching a “one stitch and multiple seedlings” combined solution to reduce the stress response in the prevention and control process, solve customers’ pain points, and provide customers with customized prevention and control solutions and after-sales services to enhance customer stickiness and their own premium capabilities.
The single product leader is transitioning to the animal protection platform and is optimistic about the long-term development potential: In the long run, the company is committed to building a product matrix with foot-and-mouth disease vaccine as its core and covering four major areas of pig, poultry, ruminant, and pet vaccines.Increase revenue growth points.

At the same time, the company is improving its production technology and research and 苏州夜网论坛 development capabilities through the construction of new parks. Among them, the production side is turning to intelligence, which further deepens the moat in product strength.Subsequent applications for the basis for granting experimental qualifications for highly pathogenic pathogenic microorganisms.

We believe that the company will gradually shift from a single product leader to a mobile insurance platform enterprise in the long term, and is optimistic about its future development potential.

Earnings forecasts and estimates Taking into account the impact of the epidemic on the company’s sales in 2019, we adjust the 2019/20 return to net profit attributable to motherhood-21.

1% / 0.

0% to 3.

02/6.

07 million yuan, date 2021 return to mother’s net profit forecast10.

One million yuan.

Corresponds to 36/22 times P / E in 2020/21 in advance.

Maintain Outperform rating and 26.

The target price of 0 yuan corresponds to 48/29 times P / E in 2020/21, + 33% space.

Risk market competition intensifies; product promotion is lower than expected; policy risk; epidemic risk.