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on April 23, vaccine leader zhifei biology (300122.SZ) released its annual report, achieving revenue of 52.918 billion yuan in 2023, up 38.30 percent from the same period last year. Net profit attributable to shareholders of listed companies was 8.07 billion yuan, up 7.04 percent from the same period last year. Net profit after deduction was 7.915 billion yuan, up 5.4 percent from the same period last year. Basic earnings per share was 3.36 yuan, up 7.04 percent year on year. By the end 2023, the company's net operating cash flow was 8.996 billion yuan, up 352.30 year on year.

According to the first quarter data, the company's performance has declined to a certain extent, mainly due to the impact of HPV vaccine batches. Looking ahead to 2024, the company's blockbuster product recombinant herpes zoster vaccine Xinanli suitable.®The upcoming release is expected to further thicken the company's performance.

Based on confidence in future development, Zhifei Biology has given 10 8 yuan's 2023 annual dividend plan, with a cash dividend of 1.915 billion yuan.

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HPV

Impact of vaccine batch issuance, first-quarter results decline

According to the first quarter report data, Zhifei Biology achieved revenue of 11.396 billion yuan in the first quarter, up 2% year-on-year; net profit and net profit after deduction of non-profit for the same period were 1.458 billion yuan and 1.455 billion yuan respectively.

The decline in the first quarter profit of Zhifei Bio was mainly due to changes in the structure of HPV vaccine products. According to the information of the Central People's Procuratorate, the number of 4-valent HPV vaccine batches issued in 2023 showed a downward trend, which was the first decline since the 4-valent HPV vaccine was put on the market. Since January this year, the 4-valent HPV vaccine has not been issued in batches, and only the 9-valent HPV vaccine has been issued in batches.

2023 annual report shows that the company Jiadaxiu 9®The number of batches of (nine-valent HPV vaccine) increased significantly, "Jiadaxu 4.®"(4-valent HPV vaccine) batch issuance decreased by 26.27 year-on-year.

titanium media APP noted that in the face of fierce market competition for HPV vaccine, mershadong (MRK.US) has made frequent moves since last year. from applying to the food and drug administration to expand male indications to optimizing the vaccination program for women aged 9-14, all these measures demonstrate mershadong's determination to strengthen the market competitiveness of jiadaxiu brand.

According to the purchase agreement signed by Zhifei Biology and Mercadon, the basic purchase amount of HPV vaccine in 2024 is 32.626 billion yuan, which is the year with the highest basic purchase amount in recent years. Therefore, in the context of Mercadon's power, from the point of view of the amount of basic procurement agreement, Zhifei biological agent's HPV vaccine sales are expected to grow further in 2024.

purchases of HPV vaccines, etc., from the Zhifei Biological Bulletin

based on the better performance in 2023 and the response to the call to return investors, zhifei biology announced the 2023 annual dividend plan, and plans to submit the shareholders' meeting to authorize the board of directors to authorize the 2024 mid-term profit distribution plan. In 2023, the company plans to distribute cash dividends of 8.00 yuan (including tax) to all shareholders for every 10 shares based on about 2.394 billion shares, with a total cash dividend of 1.915 billion yuan.

At the same time, Zhifei Bio intends to request the general meeting of shareholders to authorize the board of directors to formulate a mid-term profit distribution plan for 2024. The ratio is to distribute cash dividends of not less than 2 yuan (inclusive) to all shareholders for every 10 shares. If calculated at the lower limit of the minimum total dividend, after the completion of the implementation of the equity distribution, in 2024 Zhifei will actually distribute a cash dividend of not less than $10 per 10 shares to all shareholders, and 2024 will be the year in which Zhifei Bio has actually distributed the highest amount of cash dividends since its history.

It is worth mentioning that Zhifei Biology has implemented cash dividends for 14 consecutive years since its listing. When the 2023 cash dividends are implemented, the accumulated cash dividends will reach 6.839 billion yuan, which is 4.7 times the net amount of initial funds raised.

At the same time, Zhifei Bio has improved shareholder returns through diversified methods. In the first quarter of this year, the company implemented a share repurchase of more than 0.3 billion yuan, all of which were used to cancel and reduce registered capital. All of them have been implemented.

Recombinant herpes zoster vaccine is about to be released and is expected to increase performance

in October last year, zhifei biology and GSK signed an exclusive distribution and joint promotion agreement. GSK will exclusively supply recombinant herpes zoster vaccine to zhifei biology. Since the product is an international heavyweight vaccine variety, it is highly anticipated by the market.

titanium media APP learned that GSK's recombinant ribbon virus vaccine is called Shingrix (Xin 'an Li Shi®), which was approved by the FDA in 2017, is mainly used for the prevention of zoospora in adults 50 years and older. Clinical studies have shown that its protective efficacy is 97.2 per cent in people over 50 years of age and 91.3 per cent in people over 70 years of age. Xin An Li Shi®It is the second listed product worldwide after the listing of Merck's Zostavax, which will be listed in China in June 2020.

From a global perspective, Xin An Li Shi®Soon after listing, it became GSK's "cash cow" and sales continued to grow, with sales of 0.784 billion pounds, 1.8 billion pounds, 19.89 pounds, 1.721 billion pounds and 29.58 pounds respectively from 2018 to 2022.

By 2023, Xin An Lishi®Sales amounted to 3.446 billion pounds (about 30.911 billion yuan), up 17% year-on-year, making it GSK's highest-selling blockbuster product.

domestically, 100 grams of biological (688276.SH) herpes zoster vaccine launched in April last year®The domestic market is being validated. In 2023, the company's herpes zoster vaccine revenue of 0.883 billion yuan, sales of 663500.

In contrast, the use of restructuring technology route of Xin An Li suitable.®There is a higher rate of protection. Recombinant herpes zoster vaccine (CH0 cells) China's first protective efficacy study results show that Xin An Li suitable.®It is 100 per cent protective for adults aged 50 years and over in mainland China. GSK's latest ZOSTER-049 long-term follow-up phase III clinical trial results data show that the vaccine has a protective effect of 82.0 percent after 11 years of vaccination.

At present, Zhifei Bio and GSK have completed the preparation work, and the product is expected to start to grow in volume in the second quarter of this year. Public data show that from February 26, 2024 to March 3, 2024, the recombinant herpes zoster vaccine obtained the first batch of certification this year. Up to now, Zhifei Bio has obtained 18 batches of herpes zoster vaccine.

Zhifei Bio also stated in its annual report: "In the first year of the company's agent sales of GSK recombinant herpes zoster vaccine, the company will actively complete the annual promotion target and lay a solid foundation for long-term cooperation between the two parties."

On the sales side, the growth rate of HPV vaccine in China in recent years is sufficient to prove the strength of Zhifei Bio's sales channel. By the end of 2023, the number of Zhifei biological sales staff reached 3990 people, the company has more than 30000 grass-roots vaccination points across the country market coverage capacity.

the basic purchase amount also confirms the company's sales strength. according to the exclusive distribution and joint promotion agreement signed by zhifei biology and GSK, the minimum annual purchase amount for zhifei biology to purchase recombinant herpes zoster vaccine from GSK in 2024-2026 is 3.44 billion yuan, 6.88 billion yuan and 10.32 billion yuan respectively, with a total of not less than 20.64 billion yuan for three years.

procurement of recombinant herpes zoster vaccine, from Zhifei biological announcement

in other words, the basic purchase amount of recombinant herpes zoster vaccine superimposed on HPV vaccine will exceed that of 35 billion yuan in 2024, plus agent products such as pentavalent rotavirus vaccine and 23-valent pneumonia vaccine, as well as the sales amount of the company's self-developed products, which may support the company's 2024 performance.

In addition to the recombinant herpes zoster vaccine, Zhifei Bio is expanding its business footprint and creating a new growth curve. In November last year, the company plans to acquire a 100 per cent stake in Chen'an Bio. After the acquisition, the company's business will expand to the fields of metabolic diseases such as diabetes and obesity. Judging from the high performance and market value of foreign weight-loss drug giants Novo Nordisk (NVO.US) and Lilly (LLY.US), this is undoubtedly another potential business sector.

(this article started in titanium media APP, by Zhang Haixia)