NEWS
After listing in Hong Kong for a year, Aimei vaccines initiates its A-share plan. The advisory institution is changed from CITIC Construction Investment to CITIC Securities.
Exactly one year after the company was listed on the main board of the Hong Kong Stock Exchange in October 2022, domestic vaccine company Aimei vaccines (06660.HK) promptly initiated its return-to-A-share plan.
On the evening of October 8th, Aimei vaccines announced that the company had decided to initiate an A-share listing plan. The board of directors agreed to engage CITIC Securities as the pre-listing advisory institution and planned to submit a filing application for A-share listing guidance.
It's worth noting that this is not the first time Aimei vaccines has pursued an A-share listing.
As early as December 2020, Aimei vaccines signed a listing advisory agreement with CITIC Securities to apply for listing on the Science and Technology Innovation Board (STAR Market). However, in June of the following year, the advisory agreement was terminated, and the company subsequently "shifted" to a Hong Kong IPO.
Just a year after landing on the H-share market, the company sought an A-share IPO plan. What is the intention behind this move?
On October 10th, Aimei vaccines responded to a reporter from 21st Century Business Herald, stating, "To promote business development, enhance overall competitiveness, and ensure the realization of the company's business goals and future development strategies, the company has decided to initiate an A-share listing plan."
Another set of data may be more persuasive.
Comparing data shows that for the same pharmaceutical company, A-share listings can obtain an average valuation premium 2.5 times higher than H-share listings. Taking the example of another vaccine industry member, Consino Biological Products (06185.HK), on October 11th, the company's H-share total market value was approximately HK$6.3 billion (approximately RMB 5.9 billion), while Consino (688185.SH) A-share total market value was around RMB 20.3 billion, with a premium of over 3 times.
Rabies vaccines for humans and hepatitis B vaccines contribute to 90% of revenue.
Aimei vaccines was established in 2011 and during 2015-2017, it acquired four certified vaccine production enterprises including Rong An Biotechnology, Aimei Sincerity, Aimei Kanghuai, and Aimei Weixin to carry out vaccine research, production, and sales.
In the prospectus for the Hong Kong IPO, Aimei vaccines mentioned, "Based on the quantity of approvals issued in 2021 (excluding COVID-19 vaccines), we are the second largest vaccine company in China, with a market share of 7.4%, second only to the state-owned enterprise China National Pharmaceutical Group (Sinopharm). Based on 2021 sales (excluding COVID-19 vaccines), our market share in China was 2.1%, while China National Biotech Group Co., Ltd. (CNBG) is the largest market participant in China".
As a leading private vaccine company, Aimei vaccines has 8 commercialized vaccine products, mainly including recombinant hepatitis B vaccine (Hansen's yeast), freeze-dried rabies vaccine for human use (Vero cell), inactivated hepatitis A vaccine (human diploid cells), mumps vaccine, bivalent inactivated vaccine for hemorrhagic fever with renal syndrome (Vero cell), and A, C, Y, and W135 meningococcal polysaccharide vaccine (MPSV4).
Especially, the two core products, the human rabies vaccine and the hepatitis B vaccine, support the company's main revenue.
In 2021, 2022, and the first half of 2023, Aimei vaccines achieved revenues of 1.57 billion yuan, 1.264 billion yuan, and 540 million yuan respectively. Among these, the two aforementioned products accounted for as high as 93.0%, 96.1%, and 93.3% of the total.
Aimei vaccines previously stated in the prospectus that "in 2021, based on the quantity of approvals, the company is the largest supplier of hepatitis B vaccines globally and in China, and is also the second largest supplier of human rabies vaccines globally and in China."
Particularly, its flagship product, the freeze-dried rabies vaccine for human use (Vero cell), approved since September 2007, has been on the commercialization path for 16 years.
Specifically, during 2021, 2022, and the first halves of 2023, the freeze-dried rabies vaccine for human use (Vero cells) contributed to the company's revenue by 59.7%, 61.5%, and 60.0% respectively.
During the same period, the Hansen's yeast hepatitis B vaccine accounted for 33.3%, 34.6%, and 33.3% of the company's revenue respectively.
In comparison, other vaccines such as the inactivated hepatitis A vaccine (human diploid cells) and the A, C, Y, and W135 meningococcal polysaccharide vaccine (MPSV4) contributed less than 5% to the company's revenue.
Based on its performance, Aimei vaccines achieved profits of 120 million yuan and 400 million yuan in 2019 and 2020 respectively, but then experienced losses in the following years.
In 2021, 2022, and the first halves of 2023, Aimei vaccines incurred net losses of -676 million yuan, -231 million yuan, and -257 million yuan respectively due to continued research and development expenses and a decrease in revenue from the human rabies vaccine.
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Seeking an A-share listing for the second time
Despite the lack of profitability in recent years, Aimei vaccines continues to expand its pipeline in multiple popular research and development areas.
Regarding future new sources of revenue growth, Aimei vaccines responded to 21st Century Business Herald journalists on October 10th, stating, "In our research pipeline, our 13-valent pneumococcal conjugate vaccine, 23-valent pneumococcal polysaccharide vaccine, and freeze-dried rabies vaccine for human use (serum-free Vero cells) have all entered Phase III clinical trials, with the 13-valent pneumococcal conjugate vaccine approaching the end of Phase III clinical trials and is about to be launched. These heavyweight products will support the company's future fundamental growth."
It is worth noting that the 13-valent pneumococcal conjugate vaccine is referred to as the "king of vaccines," primarily targeting young children, and there is enormous market demand, making it one of the best-selling vaccine varieties worldwide.
According to publicly available information, Pfizer's "Prevnar" series of pneumococcal vaccines (including Prevnar 13 and Prevnar 20) achieved sales of $2.981 billion in the first half of 2023.
Looking at the layout of domestic vaccine companies, Watson Biotechnology's 13-valent pneumococcal conjugate vaccine was approved for sale in December 2019, and Kangtai Biotechnology's 13-valent pneumococcal conjugate vaccine was approved for sale in September 2021.
In its mid-year report for 2023, Aimei vaccines mentioned the progress of research and development of the 13-valent pneumococcal conjugate vaccine, stating, "It is expected that in the first quarter of 2024, we will submit a drug registration certificate application to the National Medical Products Administration (NMPA), and it is expected that (this product) will be approved in the second half of 2024."
Therefore, following Watson Biotechnology and Kangtai Biotechnology, Aimei vaccines is expected to become the third domestic company to be approved for the sale of the 13-valent pneumococcal conjugate vaccine.
Regarding the status of the pipeline reserves, the company previously stated in its 2022 annual report, "It is expected that at least four products will have the opportunity to be listed in the second half of 2023 and in the years 2024-2025. In addition, bivalent hand, foot, and mouth disease vaccine, freeze-dried rabies vaccine for human use (human diploid cells), tetravalent conjugate meningococcal vaccine, tetanus vaccine, and other products are expected to be listed within 5 years."
However, continuous research and development expenditure requires strong financial support.
Referring to the A-share listing plan a year after its Hong Kong listing, Aimei vaccines responded to the 21st Century Business Herald journalist, stating, "To promote business development, enhance overall competitiveness, and ensure the realization of the company's business goals and future development strategies, the company has decided to initiate an A-share listing plan."
"The Hong Kong stock market started relatively early and is more mature and stable. Mainland companies listing in Hong Kong help enterprises enter international financing platforms to expand overseas financing channels, drive further internationalization of enterprises, and aid in the development of overseas business. The A-share market has a higher valuation and is becoming increasingly mature. A dual listing of A+H shares can further alleviate the company's financial pressure, enhance the company's valuation, and increase secondary market activity," said Li Zhiguang, Market Leader of Auditing Services for Deloitte China Central and Zhejiang Province Managing Partner, in an analysis provided to 21st Century Business Herald on October 11.
In Li Zhiguang's view, "with the subsequent integration of the two markets, the future valuations of both markets for the same listed entity will be closer."
According to incomplete statistics from 21st Century Business Herald reporters, pharmaceutical companies listed in both H-shares and A-shares include Fudan Zhangjiang (01349.HK/688505.SH), Haohai Biotech (Haohai Bio) (06826.HK/688366.SH), BeiGene (06160.HK/688235.SH), Junshi Biosciences (01877.HK/688180.SH), Cansino Biologics (Cansino) (06185.HK/688185.SH), Rongchang Biopharmaceuticals (09995.HK/688331.SH), among others.
Comparatively, the total market value of the same company in A-shares compared to H-shares shows a significant premium space.
For example, in the case of Consino Biological Products, which belongs to the same vaccine industry as Aimei vaccines, the company was listed on the Hong Kong Stock Exchange in March 2019 and on the A-share Sci-Tech Innovation Board in August 2020.
As of the close on October 11th, Consino Biological Products' H-share total market value was approximately HK$6.3 billion (approximately RMB 5.9 billion), while its A-share total market value was around RMB 20.3 billion, resulting in a premium of 344%.
On the evening of October 8th, Aimei vaccines announced that the company had decided to initiate an A-share listing plan. The board of directors agreed to engage CITIC Securities as the pre-listing advisory institution and planned to submit a filing application for A-share listing guidance.
It's worth noting that this is not the first time Aimei vaccines has pursued an A-share listing.
As early as December 2020, Aimei vaccines signed a listing advisory agreement with CITIC Securities to apply for listing on the Science and Technology Innovation Board (STAR Market). However, in June of the following year, the advisory agreement was terminated, and the company subsequently "shifted" to a Hong Kong IPO.
Just a year after landing on the H-share market, the company sought an A-share IPO plan. What is the intention behind this move?
On October 10th, Aimei vaccines responded to a reporter from 21st Century Business Herald, stating, "To promote business development, enhance overall competitiveness, and ensure the realization of the company's business goals and future development strategies, the company has decided to initiate an A-share listing plan."
Another set of data may be more persuasive.
Comparing data shows that for the same pharmaceutical company, A-share listings can obtain an average valuation premium 2.5 times higher than H-share listings. Taking the example of another vaccine industry member, Consino Biological Products (06185.HK), on October 11th, the company's H-share total market value was approximately HK$6.3 billion (approximately RMB 5.9 billion), while Consino (688185.SH) A-share total market value was around RMB 20.3 billion, with a premium of over 3 times.
Rabies vaccines for humans and hepatitis B vaccines contribute to 90% of revenue.
Aimei vaccines was established in 2011 and during 2015-2017, it acquired four certified vaccine production enterprises including Rong An Biotechnology, Aimei Sincerity, Aimei Kanghuai, and Aimei Weixin to carry out vaccine research, production, and sales.
In the prospectus for the Hong Kong IPO, Aimei vaccines mentioned, "Based on the quantity of approvals issued in 2021 (excluding COVID-19 vaccines), we are the second largest vaccine company in China, with a market share of 7.4%, second only to the state-owned enterprise China National Pharmaceutical Group (Sinopharm). Based on 2021 sales (excluding COVID-19 vaccines), our market share in China was 2.1%, while China National Biotech Group Co., Ltd. (CNBG) is the largest market participant in China".
As a leading private vaccine company, Aimei vaccines has 8 commercialized vaccine products, mainly including recombinant hepatitis B vaccine (Hansen's yeast), freeze-dried rabies vaccine for human use (Vero cell), inactivated hepatitis A vaccine (human diploid cells), mumps vaccine, bivalent inactivated vaccine for hemorrhagic fever with renal syndrome (Vero cell), and A, C, Y, and W135 meningococcal polysaccharide vaccine (MPSV4).
Especially, the two core products, the human rabies vaccine and the hepatitis B vaccine, support the company's main revenue.
In 2021, 2022, and the first half of 2023, Aimei vaccines achieved revenues of 1.57 billion yuan, 1.264 billion yuan, and 540 million yuan respectively. Among these, the two aforementioned products accounted for as high as 93.0%, 96.1%, and 93.3% of the total.
Aimei vaccines previously stated in the prospectus that "in 2021, based on the quantity of approvals, the company is the largest supplier of hepatitis B vaccines globally and in China, and is also the second largest supplier of human rabies vaccines globally and in China."
Particularly, its flagship product, the freeze-dried rabies vaccine for human use (Vero cell), approved since September 2007, has been on the commercialization path for 16 years.
Specifically, during 2021, 2022, and the first halves of 2023, the freeze-dried rabies vaccine for human use (Vero cells) contributed to the company's revenue by 59.7%, 61.5%, and 60.0% respectively.
During the same period, the Hansen's yeast hepatitis B vaccine accounted for 33.3%, 34.6%, and 33.3% of the company's revenue respectively.
In comparison, other vaccines such as the inactivated hepatitis A vaccine (human diploid cells) and the A, C, Y, and W135 meningococcal polysaccharide vaccine (MPSV4) contributed less than 5% to the company's revenue.
Based on its performance, Aimei vaccines achieved profits of 120 million yuan and 400 million yuan in 2019 and 2020 respectively, but then experienced losses in the following years.
In 2021, 2022, and the first halves of 2023, Aimei vaccines incurred net losses of -676 million yuan, -231 million yuan, and -257 million yuan respectively due to continued research and development expenses and a decrease in revenue from the human rabies vaccine.
.
Seeking an A-share listing for the second time
Despite the lack of profitability in recent years, Aimei vaccines continues to expand its pipeline in multiple popular research and development areas.
Regarding future new sources of revenue growth, Aimei vaccines responded to 21st Century Business Herald journalists on October 10th, stating, "In our research pipeline, our 13-valent pneumococcal conjugate vaccine, 23-valent pneumococcal polysaccharide vaccine, and freeze-dried rabies vaccine for human use (serum-free Vero cells) have all entered Phase III clinical trials, with the 13-valent pneumococcal conjugate vaccine approaching the end of Phase III clinical trials and is about to be launched. These heavyweight products will support the company's future fundamental growth."
It is worth noting that the 13-valent pneumococcal conjugate vaccine is referred to as the "king of vaccines," primarily targeting young children, and there is enormous market demand, making it one of the best-selling vaccine varieties worldwide.
According to publicly available information, Pfizer's "Prevnar" series of pneumococcal vaccines (including Prevnar 13 and Prevnar 20) achieved sales of $2.981 billion in the first half of 2023.
Looking at the layout of domestic vaccine companies, Watson Biotechnology's 13-valent pneumococcal conjugate vaccine was approved for sale in December 2019, and Kangtai Biotechnology's 13-valent pneumococcal conjugate vaccine was approved for sale in September 2021.
In its mid-year report for 2023, Aimei vaccines mentioned the progress of research and development of the 13-valent pneumococcal conjugate vaccine, stating, "It is expected that in the first quarter of 2024, we will submit a drug registration certificate application to the National Medical Products Administration (NMPA), and it is expected that (this product) will be approved in the second half of 2024."
Therefore, following Watson Biotechnology and Kangtai Biotechnology, Aimei vaccines is expected to become the third domestic company to be approved for the sale of the 13-valent pneumococcal conjugate vaccine.
Regarding the status of the pipeline reserves, the company previously stated in its 2022 annual report, "It is expected that at least four products will have the opportunity to be listed in the second half of 2023 and in the years 2024-2025. In addition, bivalent hand, foot, and mouth disease vaccine, freeze-dried rabies vaccine for human use (human diploid cells), tetravalent conjugate meningococcal vaccine, tetanus vaccine, and other products are expected to be listed within 5 years."
However, continuous research and development expenditure requires strong financial support.
Referring to the A-share listing plan a year after its Hong Kong listing, Aimei vaccines responded to the 21st Century Business Herald journalist, stating, "To promote business development, enhance overall competitiveness, and ensure the realization of the company's business goals and future development strategies, the company has decided to initiate an A-share listing plan."
"The Hong Kong stock market started relatively early and is more mature and stable. Mainland companies listing in Hong Kong help enterprises enter international financing platforms to expand overseas financing channels, drive further internationalization of enterprises, and aid in the development of overseas business. The A-share market has a higher valuation and is becoming increasingly mature. A dual listing of A+H shares can further alleviate the company's financial pressure, enhance the company's valuation, and increase secondary market activity," said Li Zhiguang, Market Leader of Auditing Services for Deloitte China Central and Zhejiang Province Managing Partner, in an analysis provided to 21st Century Business Herald on October 11.
In Li Zhiguang's view, "with the subsequent integration of the two markets, the future valuations of both markets for the same listed entity will be closer."
According to incomplete statistics from 21st Century Business Herald reporters, pharmaceutical companies listed in both H-shares and A-shares include Fudan Zhangjiang (01349.HK/688505.SH), Haohai Biotech (Haohai Bio) (06826.HK/688366.SH), BeiGene (06160.HK/688235.SH), Junshi Biosciences (01877.HK/688180.SH), Cansino Biologics (Cansino) (06185.HK/688185.SH), Rongchang Biopharmaceuticals (09995.HK/688331.SH), among others.
Comparatively, the total market value of the same company in A-shares compared to H-shares shows a significant premium space.
For example, in the case of Consino Biological Products, which belongs to the same vaccine industry as Aimei vaccines, the company was listed on the Hong Kong Stock Exchange in March 2019 and on the A-share Sci-Tech Innovation Board in August 2020.
As of the close on October 11th, Consino Biological Products' H-share total market value was approximately HK$6.3 billion (approximately RMB 5.9 billion), while its A-share total market value was around RMB 20.3 billion, resulting in a premium of 344%.
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