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Kailaiying (002821) Matters Comment: New production capacity landing continuous reaction process enters large-scale application

Kailaiying (002821) Matters Comment: New production capacity landing continuous reaction process enters large-scale application

Matters: The company announced that the first phase of the key pharmaceutical industrialization project of Jilin Kailaiying Pharmaceutical Co., Ltd., a wholly-owned subsidiary, officially started production.

Ping An’s perspective: Capacity expansion, multiple drugs enter the verification approval stage: The new capacity will be the first phase of the Dunhua 2 plant, including several continuous reaction production workshops dedicated to Penan, and will soon begin accepting customers and GMP systemsaudit.

Several new Penan drugs will be transferred to the new plant for verification and supplementary production, which also means that these drugs are already in the final stage of clinical trials and are about to enter commercial production.

The opening of new production capacity can ensure that the company can successfully undertake subsequent expansion orders.

Continuous reaction opens the door to large-scale applications: Continuous reaction, also known as flow chemistry, refers to the technology of pumping materials through a pump and reacting the reactants in a continuous flow mode in a channel reactor.

More than 40% of the production of the upcoming Penan production line will use continuous reaction technology, which can achieve the continuous production of the core raw material 4-AA, reducing production costs and time, while reducing pollution.

Kailaiying’s continuous response technology is in a leading position locally, and the opening of the plant also marks that the company has been able to introduce technology to large-scale production.

In the past, a large-scale production plant with good operating conditions in the country could create about 2 times the scale of fixed asset investment every year, and large-scale applications of continuous response could revolutionize this boundary and further promote the company’s investment.ratio.

Maintaining the “Highly Recommended” level: Innovative pharmaceuticals surpassed the industry to maintain a high level of prosperity, and under the Matthew effect, the company’s leader became more stable. We were optimistic that the logic of the industry and the company had changed.

杭州桑拿网 The company’s layout in terms of industrial chain extension and technology deepening has continued to advance, and the development momentum is good.

Taking into account the replacement effect of equity incentives on equity, the EPS forecast for 2019-2021 is adjusted to 2.

42, 3.

23, 4.

15 yuan (original 2.

43, 3.

24, 4.

16 yuan), maintain “highly recommended” level.

Risk reminder (1) Industry risk: The ratio of innovative drug supplementation and expansion is lower than expected. If the risk ratio of innovative drug is insufficient, the international political environment and other reasons cause the substitution and expansion ratio of global innovative drugs to be lower than expected, which will affect the development of the CMO industry.

(2) Company risks: Failure of drug development and after-market 四川耍耍网 sales that are less than expected drug development failure will result in the termination of the project and the CMO will lose the corresponding order.

If the sales of the drug are less than expected after the listing, the corresponding CMO order cannot be realized.

(3) Company risk: Loss of customer trust risk If a production accident occurs, receiving a warning letter from a regulatory agency or other circumstances that cannot meet the customer’s needs may result in the loss of the order and even the customer.

(4) Corporate risk: The main customers of exchange rate changes are from Europe and the United States, and the foreign currency of orders is the unit of denomination.

Exchange rate fluctuations will result in exchange losses.