On the evening of March 25, CanSino Biologics released its 2024 annual report. The company achieved operating income of 846 million yuan for the whole year, an increase of 137.01% year-on-year; the net loss attributable to the parent company's owners was 379 million yuan, and the loss narrowed by 74.45% year-on-year. Since its listing, CanSino Biologics, which has been losing money continuously, turned losses into profits in 2021 with the help of the new crown vaccine. As the competition for the new crown vaccine intensified and demand slowed down, it fell into losses again in the second year. Until 2024, CanSino Biologics has been losing money for three consecutive years.

Increase in revenue from meningococcal vaccines

The operating income in 2024 increased significantly, mainly due to the impact of the estimated return of the new crown vaccine in the same period of 2023, which reduced the operating income by 253 million yuan in the current period. If this impact is excluded, CanSino achieved operating income of 610 million yuan in the same period of 2023, and the operating income in this reporting period increased by 38.68% year-on-year. In addition, as the only quadrivalent meningococcal conjugate vaccine in the domestic market, Manhaixin's product penetration rate continues to increase, achieving rapid sales growth; at the same time, the impact of global public health events on CanSino's operations has been basically eliminated.

CanSino's main business income is mainly from the sales of vaccines and related products. In 2024, the sales revenue of vaccine products reached 800 million yuan, of which the sales revenue of meningococcal vaccine products reached 794 million yuan, a year-on-year increase of 41.31%, mainly due to the precise layout of the market of Manhaixin, which promoted the continuous increase in sales and the continuous improvement of product penetration; in addition, the newly added pharmaceutical production process research and development business confirmed revenue of 24.5429 million yuan.

Regarding the reasons for the narrowing of losses, CanSino said that while operating income increased significantly, the company optimized resource allocation, promoted cost reduction and efficiency improvement measures, and improved operating efficiency. During the reporting period, management expenses and R&D expenses decreased significantly compared with the same period last year, and asset impairment losses also decreased significantly year-on-year, so the losses narrowed significantly. Among them, last year's management expenses were 179 million yuan, a year-on-year decrease of 37.62%; R&D expenses were 416 million yuan, a year-on-year decrease of 34.78%. The decline in R&D expenses was mainly due to the fact that during the reporting period, CanSino's R&D fully shifted to non-new crown innovative vaccine projects, and many candidate vaccine products in Phase III and later clinical stages met the capitalization conditions and confirmed development expenses.

Applications for listing of multiple products have been accepted

CanSino is mainly engaged in the research and development, production and commercialization of human vaccines. Its listed products include the quadrivalent meningococcal conjugate vaccine Manhaixin, the bivalent meningococcal conjugate vaccine Menaixi, the recombinant new coronavirus vaccine Covishield, the inhaled new crown vaccine Covishield Wuyou and the recombinant Ebola virus disease vaccine.

CanSino was listed on the Hong Kong Stock Exchange in March 2019, and in August 2020, it landed on the Science and Technology Innovation Board, becoming the first "A+H" vaccine stock since the opening of the Science and Technology Innovation Board. However, since its listing, the company has only made a profit in 2021, and has suffered losses in the rest of the years.

In 2021, CanSino turned losses into profits, with a profit of more than 1.9 billion yuan, mainly due to the successful commercialization of its recombinant new coronavirus vaccine Covid-19. Especially in the overseas market, in 2021, Covid-19 was approved for emergency use authorization in many countries abroad, which quickly opened up the overseas market. That year, overseas sales reached 3.057 billion yuan, a year-on-year increase of 480 times, accounting for 71.1% of total revenue.

As the demand for new crown vaccines slowed down and market competition intensified, CanSino's sales revenue of new crown vaccine products fell sharply, and other products were in the early stages of commercialization with a small revenue scale. In 2022, CanSino fell into losses again. In 2022, CanSino's operating income was 1.035 billion yuan, a year-on-year decline of 75.94%; net profit was -909 million yuan.

In 2023, the sequelae of the fading dividend of the new crown vaccine continued. In 2023, CanSino's operating income was only 357 million yuan, a year-on-year decline of 65.49%, of which the sales revenue of the new crown vaccine products was only 36.63 million yuan; net profit was -1.483 billion yuan, and the loss increased by 63.04% year-on-year. The main reason for the loss was the new crown vaccine, including a sharp decline in the income related to the new crown vaccine; the actual vaccination of the new crown vaccine products and the expectation of future vaccination reduced the relevant income; the output of the new crown vaccine was low, the capacity utilization rate of the relevant production lines was insufficient, and the fixed costs corresponding to the redundant capacity were included in the operating costs; considering the future use plan of the new crown vaccine-related inventory and long-term assets, impairment losses were recorded.

However, CanSino soon found a new revenue growth point-meningococcal conjugate vaccine. In June and December 2021, Menaixi and Manhaixin were approved for listing and commercialized in 2022 and beyond. In 2023, CanSino's meningococcal vaccine achieved sales revenue of approximately 562 million yuan, a year-on-year increase of approximately 266.39%. In 2024, this figure was 794 million yuan, a year-on-year increase of 41.31%.

In addition to the meningococcal conjugate vaccine, CanSino's 13-valent pneumococcal polysaccharide conjugate vaccine PCV13i drug registration and marketing authorization application, the quadrivalent meningococcal conjugate vaccine age expansion application, and the domestic production drug registration and marketing authorization application for adsorbed acellular diphtheria (component) pertussis combined vaccine for infants and young children have been accepted by the National Medical Products Administration. In addition, vaccines such as poliomyelitis and herpes zoster have also been deployed.

Haitong Securities pointed out that Manhaixin is the only MCV4 (ACYW135 group meningococcal polysaccharide conjugate vaccine) approved for listing in China, and the market competition pattern is relatively good. In November 2024, the application for MCV4 age extension was accepted. If the application is successfully approved, it will effectively continue the growth of the first three injections of MCV4 and help the product continue to increase in volume. CanSino's DPT combination vaccine has taken shape. If it is successfully approved for marketing, it will further enrich the company's infant pipeline and form a synergistic effect with existing products. The domestic PCV13 market size is nearly 7 billion, and the sales of domestic products are rising rapidly. The company's PCV13i is expected to be the fourth to be approved for marketing.

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