Zhu Guoguang and Zhang Kun recently conducted research on Kangwei Century and released a research report "Molecular Testing Whole Industry Chain Layout, Helicobacter Pylori Stool Detection Creates the Second Growth Curve", this report gives a ** rating to Kangwei Century, and the current stock price is 20$3.
Kang is the century (688426).
Investment Essentials. Investment logic: The traditional molecular testing business covers the whole business process of "core raw materials + kits + testing services", bringing steady growth; Helicobacter pylori resistance testing products are expected to be approved in 2024, bringing the second growth curve.
It is the first to deploy Helicobacter pylori drug resistance testing, and it is expected to be approved as the first product in 2024, contributing to the peak sales of 1.5 billion yuan: The medical burden of many digestive tract diseases and gastric cancer in China is heavy, and Helicobacter pylori (HP) infection is the main related agent, and HP infection is associated with 65% of gastric cancer deaths. The incidence of HP is as high as 44%, and the clinical pain point urgently needs to solve the problem of antibiotic resistance, so as to improve the efficiency. The fecal nucleic acid method products have the advantages of high sensitivity, non-invasiveness, and high detection throughput, and are suitable for drug resistance detection and large-scale screening. At the same time, at present, due to technical difficulties, only one product of Kangwei Century uses fecal nucleic acid method, and it is expected to become the first product in China to be approved for marketing in 2024. Assuming that the target population of HP testing products includes recommended screeners for gastric cancer risk and routine physical examinations, then we estimate that the number of people screened in 2024 can reach 383 million. We assume that the terminal price of HP positive and negative testing and drug resistance testing is 298 yuan and 798 yuan, respectively, and assumes that the ex-factory price is about 30%. With the popularization of the importance of drug resistance testing, the promotion of early screening for HP infection and gastric cancer, and the development of market education in the company, the number of customers who choose drug resistance testing in one step will gradually increase. We**, 2023-2025 Kangwei Century HP testing products total sales. 800 million yuan; And it will reach a peak sales of 1.5 billion yuan in 2030.
Deeply cultivating the molecular testing industry, integrating the whole business process of reagents and services: the company has more than ten years of research and development accumulation in the field of molecular testing, forming a relatively complete product system, with a strong technical level in the industry, and is one of the few enterprises in China that have a layout in various business sectors of molecular testing, covering the whole business process of molecular testing "core raw materials + kits + testing services". The follow-up opportunities are mainly the popularization of early cancer screening and home testing, the application of modern medical testing methods, and the expansion of market scale and the surge in demand for domestic substitution driven by the epidemic.
Profit** and investment rating: The valuation method of the company's various businesses is quite different, we use segment valuation, traditional business adopts PE valuation, and the emerging business represented by HP series products adopts PS valuation, we believe that the company's target market value in 2024 is about 3 billion yuan, considering the company's strong advanced nature in nucleic acid preservation and extraction and purification business + the industrial chain extension advantage of integrated layout + faster performance growth rate than comparable companies + HP series products have strong innovative attributes and clinical needs, covering for the first time, Give a "** rating."
Risk warning: the risk of delayed approval of new products and less than expected promotion; Dealer management risk; Strategic and managerial risks associated with the expansion of operations.
The latest profit** breakdown is as follows:
A total of 1 institutions have rated the stock in the last 90 days,** 1 ratings.
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