Why do Yao Bo VS Zheng Chuan stock glass bottles skyrocket?

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Overseas COVID-19 is still raging, with local outbreaks in Beijing, Dalian and Xinjiang. The listing of vaccines in COVID-19 has filled the world with expectations. On July 2 1, COVID-19 vaccine company Kangxinuo announced that its research paper on the results of the second phase clinical trial of recombinant novel coronavirus vaccine (adenovirus vector) was published in The Lancet. COVID-19 has made a key breakthrough in vaccine research and development, which proves its safety and reliability. The upstream and downstream of the vaccine industry chain are also attracting investors' pursuit.

Countries are preparing for the launch of COVID-19 vaccine. The Ministry of Industry and Information Technology of China held a forum in COVID-19 to discuss the supply and storage of vaccines and related packaging materials. On July 20th, Pfizer and BioNTech signed a purchase agreement with the British government for 30 million doses of COVID-19 vaccine. On July 22nd, the US Department of Health and Human Services (HHS) also announced that it had reached an agreement with the Ministry of National Defense, Pfizer and BioNTech, a German biotechnology company, for 600 million doses of vaccine.

Share prices of COVID-19 vaccine research and development enterprises such as zhifei Bio, watson biological and Fosun Pharma. Both are rising, and the concept of medical glass bottles for vaccine packaging has also begun to enter the investor's field of vision. Related concept stocks include Shandong Pharmaceutical Glass (600529. SH), a leading pharmaceutical glass enterprise in China, Zheng Chuan (603976. SH), a manufacturer of medical glass.

As of July 3 1, Yao Bo has increased from 28.03 yuan at the beginning of the year to 7 1. 1 yuan, with an increase of159%; Zheng Chuan shares rose from 17.77 yuan to 92.88 yuan, an increase of 436%.

Why do small glass bottles cause investors to compete for speculation?

Small industry, big opportunity

Medium borosilicate medical glass has become a clear future in the medical glass market.

On July 4th, Professor Zhang Wenhong said that it is more difficult to produce a glass bottle full of vaccines than to produce vaccines. China is not the only country facing this problem. As early as April, a professor at Oxford University Medical College said that there were only 200 million vaccine glass bottles left in the world. The output of vaccine glass bottles has become a "bottleneck" problem for the vaccine to flow smoothly to the end audience.

This incident has subverted investors' perceptions. Medical glass bottles, which have been ignored by investors before, have such a high gold content.

Where is the gold content of medical glass bottles?

The quality of medical glass bottles from low to high is soda-lime glass bottles, low borosilicate glass bottles and medium borosilicate glass bottles. COVID-19 vaccine needs to be stored in the highest quality medium borosilicate glass bottles. Compared with sodium calcium glass bottles and low boron silicon materials, medium boron silicon materials can keep the vaccine in a relatively stable state.

Because drugs are affected by temperature, humidity, air, light, microorganisms and so on. The stability of the drug will change. Neutral borosilicate glass is far superior to low borosilicate glass in water resistance, acid and alkali resistance, frost resistance, thermal stability and filling speed. Under the long-term immersion and erosion of drugs, glass bottles will not precipitate or cause changes in PH value, and have excellent chemical stability and thermal stability. Therefore, the technical threshold of medium borosilicate glass bottles is relatively high, and this market segment has long been monopolized by three overseas companies: Schott in Germany, Corning in the United States and NEG in Japan, and domestic enterprises rarely have the strength to share a piece of the action.

However, with the substitution of medical glass in China, the overall market size of medical glass in China has been on the rise in the past five years, reaching 265,438+094 million yuan in 2065,438+08, accounting for about 20% of the medical packaging industry.

Since 20 17, the consistency evaluation of drug injections in the market has been put on the agenda, and it is proposed that the packaging materials and containers for injections in direct contact with drugs should meet the packaging standards promulgated by the general administration, and it is not recommended to use low borosilicate glass and soda lime glass.

At present, the glass used for drug packaging in China is mostly low-end soda-lime glass and low borosilicate glass, and medium borosilicate glass bottles are widely used in foreign pharmaceutical companies. The first reason is the high cost of medium boron silicon, and the second reason is that the production stability is difficult to control.

Before the prevalence of generic drugs in China, cost became a key factor, and even the matching glass bottles became a part of cost control. Most of them used low boron silicon or sodium calcium glass bottles, while most of the original drugs with high gold content used medium boron silicon glass bottles. However, the pharmaceutical industry in China is transforming and upgrading from generic drugs to innovative drugs.

According to Frost &; According to Sullivan's data, from 20 16 to 2020, the compound annual growth rate of global biological agent research and development services will be 19.0%, reaching a market scale of 20 billion US dollars. China is the country with the fastest growth rate of research and development services for biological agents. It is estimated that the compound annual growth rate of China market will be 34.8% from 2016 to 2020, which is much higher than the global market. Therefore, medium borosilicate medical glass has become a clear future in the medical glass market.

Due to the small domestic demand for borosilicate glass, the products in the industry are mainly low-end soda-lime glass and low borosilicate glass, and the homogenized products will inevitably lead to disorderly competition in the price war and other industries. Therefore, technological breakthrough becomes the key.

Shandong Yao Bo VS Zheng Chuan stock.

The market value of Yao Bo is more than three times that of Zheng Chuan, but its P/E ratio is less than 2/5 of that of Zheng Chuan.

First of all, Yao Bo and Zheng Chuan have a long history. Yao Bo was founded in 1970 and listed in June 2002. Zheng Chuan was founded on 1989 and listed on August 20 17.

As of August 2nd, the market value of Yam Glass is more than three times that of Zheng Chuan stock, but its P/E ratio is less than 2/5 of that of Zheng Chuan stock. As the oldest and second child in the medical glass industry, the capital markets of the two companies are really interesting. Does this situation mean that the value of Zheng Chuan stock is seriously overvalued by the market?

In terms of revenue and net profit, the total revenue of Shandong Pharmaceutical Glass in 20 19 was 2.99 billion yuan, and the net profit was 459 million yuan. In 20 19, the total operating income of Zheng Chuan was 52 10/00000 yuan, and the net profit was 6 10/00000 yuan. From the perspective of volume, the two companies are obviously not in the same order of magnitude.

In addition, in terms of profit rate, the gross profit rate and net profit rate of Shandong Pharmaceutical Glass are 36.9 1% and 15.49% respectively. In the same period, the gross profit margin and net profit margin of Zheng Chuan were 27. 14% and 1 1.90% respectively. Regardless of the gross profit or net profit from sales, the situation of Shandong Pharmaceutical Glass is better than that of Zhengchuan.

Why are the interest rates of the two medical glass industries very different? From the perspective of asset market, Zheng Chuan stocks attract investors' favor. What is the main reason?

Yao Bo is a leading manufacturer of molded bottles in China. In 20 19, molded bottles brought it12.52 million yuan, accounting for 52.24%, accounting for half of the country. The gross profit margin of this product reaches 46.63%, which is the highest in its business.

Zheng Chuan Co., Ltd. mainly produces control bottles. In 20 19, the production of borosilicate glass bottles brought it 25 1 100 million yuan, accounting for 48.3 1% of its income, but the gross profit margin of this product was only 28.28%, which was far lower than the main product of Yao Bo. In 20 19, the revenue of soda-lime glass tube bottling was 654.38+09.9 billion yuan, accounting for 38.24% of the total revenue, and the gross profit margin was even lower, only 27.03%.

Mainly because the products and processes of the two companies are different, the gross profit margin is quite different.

According to the financial report, Shandong Medical Glass achieved an annual sales of 7.3 billion bottles in 20 19, up 4% year-on-year. Among them, the sales volume of 20 19 first-class glass molding bottles reached more than 200 million, up 40% year-on-year. The main customers include multinational companies such as Sanofi, Novartis, Bayer, Boehringer Ingelheim and Pfizer, as well as domestic pharmaceutical companies such as Hengrui, Zheng Da Tianqing, Fosun Pharma and Sinopharm Group. In the future, it is expected to replace and upgrade glass bottles in the consistency evaluation of injections. Shandong Yaobo is mainly produced by its own kiln, and its core barriers are cost advantage and quality advantage. At the same time, due to the high input cost of the kiln, the technical difficulty is relatively high and the entry threshold is high.

According to statistics, the main medical glass products (molded bottles, controlled bottles and ampoules) demand about 80 billion pieces every year, including about 654.38+0.5 billion pieces of molded bottles and controlled bottles and nearly 40 billion pieces of ampoules. At present, the domestic medical glass market is nearly 654.38+0 billion yuan, with an average annual growth rate of over 654.38+00%.

From the perspective of the industry, it faces the opportunity of technological upgrading. But judging from the current capital market, the surge of these two companies is due to the concept of vaccine. Shandong Yao Bo said in the open market that the company has not received an order for vaccine glass bottles from COVID-19.

Zheng Chuan also said that it has not received any large purchase orders for vaccine bottles. At present, the company only produces medium boron glass bottles through outsourcing, and the proportion of medium boron glass bottles in the company's product structure is relatively low. At present, the company's medium boron glass tube product kiln is in the construction stage and has not been officially mass-produced.

Both companies are far away from vaccine glass bottles, but their share prices are still rising. However, if there is only a concept, in the long run, it will not produce substantial performance gains. I believe that the short-term stock price rise is just a castle in the air.