The innovative drug sector hits bottom and rebounds, AIM VACCINE, which was "wrongly killed", sees a return in value
The Hong Kong stock pharmaceutical sector has rebounded recently, influenced by factors such as the Fed's interest rate cut, favorable policies, and growth in half-year performance reports. The Hong Kong stock connect innovation drug index rose by 21.75%, with AIM VACCINE surging over 40% intraday. Analysis suggests that high-quality growth stocks are expected to see a return in value, especially companies with strong innovation capabilities that possess greater risk resistance in the current uncertainty
Influenced by multiple factors such as the start of the Fed interest rate cut cycle, frequent policy benefits, and good performance in the semi-annual report, the healthcare sector in the Hong Kong stock market has recently experienced a strong rebound.
In 2024Q3, the Hong Kong Stock Connect Innovative Drug Index (987018) rose by 21.75%. Some believe that the Hong Kong stock market for innovative drugs has entered a technical bull market. As of September 26th, the latest scale of the Hong Kong Stock Connect Innovative Drug ETF reached HKD 292 million, hitting a new high since its establishment; the Hong Kong Stock Connect Innovative Drug ETF increased by 10 million shares in the past week, achieving significant growth; the Hong Kong Stock Connect Innovative Drug ETF had net inflows for 4 out of the past 5 trading days, with a total of "absorbing" HKD 10.8084 million.
On September 27th, the central bank announced a 0.5 percentage point reduction in the reserve requirement ratio for financial institutions, a series of policy combinations, and positive news once again driving the entire healthcare sector in the Hong Kong stock market to rise.
In terms of rebound gains and popular stocks in the technical bull market, AIM VACCINE (06660) rose by over 40% at one point during trading and closed with an increase of over 28%, WuXi AppTec closed with an increase of over 23%, GenScript Biotech rose by over 14%, and other innovative drug stocks such as BeiGene, Innovent Biologics, China Biologic Products, and Kangmei Pharmaceutical also followed the uptrend.
Looking at past data, the healthcare index has been in a deep adjustment period since 2021, with the magnitude and duration of this adjustment being rare, making it the "longest investment difficulty period in the history of the healthcare sector". At this point in time, re-evaluating the healthcare sector in the Hong Kong stock market, high-quality growth stocks that were severely underestimated by the market in the past are expected to experience a value rebound with the help of favorable conditions. These include Kangmei Pharmaceutical, which holds the heavyweight tumor new drug Yivoxi, BeiGene with the first domestically produced innovative drug worth over a billion US dollars, and AIM VACCINE, the vaccine leader with multiple heavyweight products accelerating their market launch.
In the current environment of many uncertainties, those with more certainty are the preferred investment targets. In the recent rebound of the Hong Kong stock market for innovative drugs, companies with strong innovation capabilities and abundant product reserves undoubtedly have stronger risk resistance, and significant volume increases will only occur during the overall rebound. From this perspective, AIM VACCINE's stock price surged by over 40% in a single trading day, showing inevitability and rationality.
As of the latest closing date (September 27th), AIM VACCINE's market value in the Hong Kong stock market is nearly HKD 7 billion, showing some rebound compared to the previous low point. However, upon careful examination, the market valuation still significantly deviates from its true value, and the stock price does not reflect the company's true strength.
AIM VACCINE wholly owns four licensed vaccine production companies, three vaccine research institutes, and four research centers. Calculated solely based on the scarcity of its vaccine production licenses, the total value of the four licensed vaccine production companies is already worth more than a hundred billion.
In the vaccine sector least affected by medical insurance policies, while also holding nearly 1.2 billion in annual revenue, AIM VACCINE is indeed a high-yield, low-risk stable investment target.
Most importantly, after intensive investment in R&D in the previous period, the company is about to declare the market launch of three heavyweight vaccine products this year, indicating that the company is about to enter a harvest period with a very clear turning point in performance. Some analysts believe that with the launch of the three new products, AIM VACCINE's sales revenue is expected to reach around RMB 5 billion, which is relatively easy to achieve. Based on an industry net profit margin of 26%, AIM VACCINE's net profit is estimated to reach around RMB 1.3 billion Based on the industry's average P/E ratio, at 23 times, AIM VACCINE's valuation could reach nearly RMB 30 billion.
AIM VACCINE has competitive advantages in pipeline, research and development, production, and sales, and now has a wide product pipeline including 8 commercialized vaccines and 21 vaccines under development, covering the top ten vaccine varieties globally.
By the end of the first half of 2024, the company's three blockbuster products, a 13-valent pneumococcal conjugate vaccine, a serum-free rabies vaccine iteration, and a 23-valent pneumococcal polysaccharide vaccine, have entered the final stage of market launch. Currently, the 13-valent pneumococcal conjugate vaccine has completed pre-application for market approval, the serum-free rabies vaccine iteration has completed pre-registration inspection, and the 23-valent pneumococcal polysaccharide vaccine is about to undergo unblinding statistics. The industrial supporting construction of these three vaccines has also been completed, and the subsequent commercialization process is expected to proceed quickly.
In addition, the company's two blockbuster products, mRNA RSV (respiratory syncytial virus) vaccine and mRNA herpes zoster vaccine, have been submitted for clinical trial applications in China and the United States. Once approved, not only will the safety and efficacy be verified by international authorities, but the globalization process will also be further accelerated.
According to the company's semi-annual report, AIM VACCINE is the earliest domestic vaccine company to deploy the mRNA technology platform, while the global mRNA vaccine market is still in a period with few products on the market, making AIM's two new products highly scarce. Data shows that from 2023 to 2028, the market size of mRNA vaccines and therapies is expected to grow rapidly at a compound annual growth rate of 16.8%, reaching USD 101.8 billion by 2028.
Of particular note, this year AIM VACCINE has entered a year of intensive application submissions, with an additional 7 products including a serum-free 20-valent pneumococcal conjugate vaccine and a serum-free high-efficiency new process human diploid rabies vaccine iteration completing clinical pre-applications.
Furthermore, according to this year's semi-annual report, AIM VACCINE has begun registering marketed products in multiple overseas markets such as Southeast Asia, Africa, South America, and the Middle East, continuously strengthening its global competitiveness. In the current rapid recovery of the pharmaceutical sector, with multiple blockbuster products set to be launched soon, positive catalysts are expected to accelerate the realization of AIM VACCINE's growth prospects