Heparin API leader's 600 million yuan new API production base project

Netxun’s API product revenue has increased significantly. Qianhong Pharmaceutical (002550.SZ), one of the leading heparin APIs, plans to use 600 million yuan of its own funds to build a new API production base project.

According to the announcement disclosed by Qianhong Pharmaceutical on September 21, the company signed the "Changzhou Qianhong Pharmaceutical API Production Base Project Contract" with the People's Government of Zhongxiang City, Hubei Province on September 20.

The production base is divided into two phases of construction: the first phase project will build a new polysaccharide product production line, high-end anti-thrombotic drug production line, medicinal protease drug production line, crude trypsin raw material production line, etc. and related supporting auxiliary facilities ; The second phase of the project will build new pharmaceutical packaging material production lines, targeted anti-tumor drug production lines, etc. and related supporting auxiliary facilities.

After the project is completed, it will form an annual production capacity of 6.5 tons of high-end anti-thrombotic drugs, 125 tons of crude trypsin, 75 billion units of pharmaceutical protease, 5 tons of targeted anti-tumor raw materials, and 100 million pharmaceutical packaging materials. production capacity.

For this new API project, Qianhong Pharmaceutical said that it will further expand the company's new drug and core product industry chain and enhance the company's core competitiveness. However, the impact on financial data/income statement is unclear.

Data show that Qianhong Pharmaceutical’s main products include biopharmaceutical enzyme series products and heparin series products. The company has the most complete heparin series industry chain in China. Heparin sodium series products are clinical anticoagulant products. Just-in-time medication is one of Qianhong Pharmaceutical’s core competitiveness in this segment.

Caijing.com noticed that in the first half of this year, the revenue share of Qianhong Pharmaceutical’s API products increased significantly and became the company’s fastest growing revenue business.

According to financial report data, in the first half of the year, Qianhong Pharmaceutical achieved revenue of 1.137 billion yuan, a year-on-year increase of 30.23%; attributable net profit was 202 million yuan, a year-on-year increase of 126.42%. During the reporting period, the API series achieved revenue of 555 million yuan, a year-on-year increase of 61.87%; the preparation drug series achieved revenue of 579 million yuan, a year-on-year increase of 9.44%.

In the secondary market, Qianhong Pharmaceutical’s stock price experienced a rise at the beginning of the year and reached the year’s high of 8.43 yuan/share at the end of January. Since then, it has fluctuated and fallen. As of the close of September 21, Qianhong Pharmaceutical’s stock price The stock price is reported at 5.64 yuan/share.

API is the abbreviation of API, which is the active ingredient of the drug and is also the basic substance that constitutes the pharmacological effect of the drug. However, raw materials generally cannot be used directly as medicines. They need to be made into preparations through adding excipients and other steps before they can be used by patients. According to different product cycles, APIs can be divided into bulk APIs, specialty APIs and patented APIs.

my country is a major producer and exporter of APIs. In recent years, with the advancement of new medical reform policies and the impact of global order shifts and other factors, the scale of my country's API industry has continued to expand.

In addition to Qianhong Pharmaceutical, the performance of API companies Hepalink and Guobang Pharmaceutical also increased significantly in the first half of this year. Among them, Hepalink's attributable net profit in the first half of 2022 was 511 million yuan, a year-on-year increase of 51.15%; Guobang Pharmaceutical's attributable net profit in the first half of 2022 was 495 million yuan, a year-on-year increase of 31.07%.

However, from the perspective of the entire sector, on the one hand, due to the impact of the epidemic lockdown, logistics and shipments were hindered, and on the other hand, due to the increase in raw material prices, which led to increased costs, the revenue and profit growth of the API sector slowed down in the first half of the year. Performance is under pressure.

Take Propulo Pharmaceuticals as an example. While its revenue increased by 16.57% in the first half of the year, its operating costs increased by 25.44%, resulting in a year-on-year decrease of 21.04% in net profit margin. The company also admitted in its interim report that the price of some commodities increased. The sharp increase resulted in a significant increase in costs.

However, the Southwest Securities Research Report pointed out that in the long term, API companies can enhance market competitiveness by enriching product pipelines; the "14th Five-Year Plan for Pharmaceutical Industry Development" encourages API companies to extend downstream, Realize the integration of APIs and preparations and consolidate the advantages of API manufacturing; API companies are expected to expand into high-end innovative drug CDMOs that focus on China's new pharmaceutical manufacturing, which is expected to open up long-term growth space.

With the gradual improvement of GMP, EHS and other systems of Chinese API companies, the added value of China’s API products has gradually increased. It has gradually established the ability to supply directly to the regulated market, and its position in the global pharmaceutical industry chain is increasing. promote. CICC believes that the status of the API industry chain continues to improve, and the concentration is expected to continue to increase; API companies adopt differentiated competition strategies, such as imitation grabbing, customer cooperation, preparation integration and difficult-to-imitate strategies, and are expected to achieve differentiated performance realization Rhythm.