Relying on the agency products, “vaccine quality leading stock” Zhifei Biological delivered a double-digit revenue and net profit in the first half of the results, bluntly said that part of the region, part of the product marketing work did not meet expectations.

The evening of August 29, Chongqing Zhifei Biological Products Co., Ltd (Zhifei Biological, 300122) announced 2024 semi-annual report, operating income of 18.258 billion yuan, a year-on-year decline of 25.31%; the mother of the net profit of 2.234 billion yuan, a year-on-year decline of 47.55%; the mother of the deduction of non-net profit of 2.23 billion yuan, a year-on-year decline of 47.04%.

Zhifei biological performance decline is not a surprise. This year's quarterly report shows that its quarterly operating income of 11.396 billion yuan, up 2% year-on-year; mother net profit of 1.458 billion yuan, down 28.26% year-on-year; mother deducted net profit of 1.455 billion yuan, down 28.36% year-on-year. Combined with the semi-annual report to see the second quarter, revenue of 6.863 billion yuan, down 48.29% year-on-year, down nearly 40% sequentially; mother net profit: 777 million yuan, down 65.14% year-on-year, down 46% sequentially.

As a leading domestic private vaccine company, Zhifei biological performance is supported by a number of star agent varieties. Agency products accounted for 96% of total revenue in the first half of the year, but the segment's revenue fell 25.40% year-on-year, and gross profit margin fell 9.91 percentage points year-on-year.

The agency of Merck Sharp & Dohme's quadrivalent and nine-valent HPV vaccines has been the growth point of Zhifei Bio's performance for many years, and according to Merck Sharp & Dohme's second-quarter report, the revenue of its nine-valent HPV vaccine in the second quarter was US$2.478 billion, an increase of only 1 percent year-on-year. Merck Sharp & Dohme said the growth was mainly driven by higher sales in the U.S. market. Meanwhile, lower sales in China largely offset that growth. Now, Zhifei Bio's half-year report confirms this.

In terms of the volume of approvals and issues, Zhifei Bio's first-half quadrivalent HPV vaccine 466,000, compared with the same period last year, a decrease of 5.8 million, a year-on-year plunge of 92.56%; nine-valent HPV vaccine approvals and issues increased by 3,593,600, a year-on-year increase of 24.48%.

It is worth mentioning that on August 26, the official website of the State Drug Administration Drug Evaluation Center showed that the listing application for the nine-valent HPV vaccine (Escherichia coli) of Xiamen Wantai Canghai Biotechnology Co., Ltd, a subsidiary of Wantai Biological (603392), a preventive biological product, was accepted. If the approval goes well, the vaccine will become the first domestic nine-valent HPV vaccine. This means that Zhifei Bio may face pressure on the nine-valent HPV vaccine in the future.

For the quarterly net profit decline, Zhifei Biological did not directly explain the reason in the quarterly report. In the half-yearly report, Zhifei Biological bluntly said that some areas of the company, some of the products of the market promotion work did not meet expectations, the company's main product sales volume compared with the same period last year has declined. However, Zhifei Biological also pointed out that the market share has maintained a high share, and the competitive advantage of product differentiation is obvious.

Zhifei Biological is marking up other agent vaccine varieties.2023 In October, the company reached a cooperation with GlaxoSmithKline UK, which will jointly carry out the commercialization of recombinant herpes zoster vaccine in the next three years, and at the same time, the two sides reached a preliminary cooperation intention for RSV vaccine. Shingles is considered the next star adult vaccine after HPV vaccine. In the half-yearly report, Zhifei Biological mentioned that the recombinant herpes zoster vaccine, which is a new agent, obtained the first batch of certificate of approval in March this year, and is currently in the initial stage of market promotion. The company has formed to further deepen the implementation of the promotion strategy, is gradually expanding market share and brand influence, the product market space and growth potential is huge.

August 29 closing, Zhifei biological rose 2.8%, at 22.77 yuan / share, market value of 54.51 billion yuan.

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