Strong trading of Zhaoyan new drug stock: the boom of cro industry keeps improving

In the evening of January 8, 2020, Zhaoyan new drug released the notice of performance increase in 2019 It is estimated that in 2019, the non net profit deduction attributable to shareholders of listed companies will be 126 million yuan to 144 million yuan, an increase of about 40% - 60% year on year According to the announcement, the main reason for its performance increase in advance is that the business climate of cro industry continues to be good, the company's orders continue to grow steadily, and the experimental facilities have been expanded in Suzhou, which to some extent alleviates the lack of production capacity and further enhances its profitability In addition, the performance increase in advance is also affected by non operating profit and loss Affected by this good news, Zhaoyan new drug stock rose sharply today, and now it is 64.61 yuan, with a turnover of 263 million yuan and the latest total market value of 10.45 billion yuan At the same time, e drug managers also noted that, as of 10:48 a.m., in addition to Zhaoyan new drug, major cro companies in China, including boten, Boji, tiger and Wuxi Pharmaceutical Co., Ltd., had achieved different degrees of share price increase Among them, boten's shares rose 6.21%, Boji's shares rose 5.63%, and tiger's and Wuxi's shares rose 4.65% and 4.36%, respectively According to frost Sullivan, the market size of China's cro industry rose rapidly from $2.1 billion in 2014 to $5.9 billion in 2018, with a compound annual growth rate of 29% It is estimated that by 2023, the domestic cro market will reach US $21.4 billion, with an average annual growth rate of 29.8% in 2019-2023 In fact, the rapid development of domestic cro industry can not be separated from three factors: industry, policy and capital In terms of policy, since July 22, 2015, the self-examination and verification of clinical data set off a "storm" of drug administration reform in the industry, the health and Health Commission, the drug regulatory bureau and the newly established National Health Insurance Bureau in 2018 have taken continuous actions to carry out the pilot of drug listing license holder system, and the review and approval reform has continued to clean up the source The evaluation of the consistency between the quality and efficacy of generic drugs and the launch of large-scale procurement have been carried out Fundamentally changed the survival rules of the industry, more and more traditional pharmaceutical enterprises began to transform to innovative drug R & D, a wave of biomedical innovative enterprises continued to emerge, cancer, rare diseases and other drug R & D increased, pharmaceutical enterprises' demand for specialized cro services increased, and the cro industry naturally welcomed important development opportunities In addition, compared with foreign countries, domestic cro has higher cost advantage and equivalent quality system, and foreign pharmaceutical companies are more inclined to cooperate with domestic cro For example, the customers of Wuxi Pharmaceutical Co., Ltd cover the top 20 large pharmaceutical companies in the world, and some customers have long-term cooperation with it for more than 10 years KANGLONG Huacheng, kailaiying and tiger pharmaceutical also have a large number of layouts in overseas markets In terms of the proportion of overseas revenue of major enterprises in total revenue in 2018, Wuxi apptec, KANGLONG Huacheng and kailaiying are all higher than 70% On the capital level, the opening of the new deal and the science and Technology Innovation Board of the Hong Kong Stock Exchange shows a good state for innovative enterprises As of January 4, 2020, there are 14 pharmaceutical and biological enterprises listed on the science and technology innovation board, with a total fundraising amount of 13.4 billion yuan Since the beginning of 2018, among the 35 pharmaceutical companies listed in Hong Kong stock market, there are 11 pharmaceutical companies, 7 health care providers and service companies, and the total amount of initial public offering of 35 companies has reached more than 67 billion Hong Kong dollars The new financing channels brought by science and technology innovation board and Hong Kong stock provide more financing platforms for emerging pharmaceutical enterprises In the field of medical and health investment in 2018, the top two financing amount are medicine (21.3 billion yuan) and Biotechnology (11.1 billion yuan) From the perspective of investment structure, the substantial increase in investment in medicine and biotechnology also reflects the confidence of market investors in the future development of pharmaceutical innovation Large amount financing provides financial support for domestic pharmaceutical enterprises to speed up innovation and development, and also effectively promotes the development of cro industry, which becomes another carriage to promote the development of cro It is worth noting that although the domestic cro industry has witnessed rapid growth at present, the overall situation is still large, small and scattered According to the 2018 report of China's pharmaceutical cro industry map, cro enterprises' investment and financing cases reached a climax in 2015-2017, with more than 100 cases of investment and financing each year, and about 60% of enterprises have only one financing record Only 0.38% of the top enterprises with a revenue scale of more than 1 billion yuan, and 65% of the enterprises with a revenue scale of less than 5 million yuan With the increasing demand of pharmaceutical enterprises for R & D outsourcing and the increasing demand for one-stop service, the vertical integration development of cro enterprises is an effective way to build their own competitiveness and improve their profitability At present, mingkant, a cro enterprise that can provide one-stop full process service, is at the forefront of China's cro industry Companies such as Taige pharmaceutical, kailaiying and KANGLONG Huacheng are actively exploring the integrated development, building a complete industrial service chain and meeting the end-to-end needs have become one of the development trends of China's cro industry With China's pharmaceutical enterprises increasing investment in scientific research and increasing demand for R & D outsourcing, their cooperation mode has gradually changed from the original point-to-point cooperation to the functional outsourcing mode, that is, pharmaceutical enterprises choose cros with different characteristics based on different needs Enterprises, such as research and development of rare diseases and tumor drugs are more specialized, and Research on cell and gene therapy is in the ascendant Differentiated and unique research and development services make enterprises easier to stand out, so constructing characteristic outsourcing services is one of the development paths of cro enterprises.