Some people love bull "misuse of this report REVIEW: Rip biological product reserves, business structure in line with industry trends; IPO equity investment projects into the production release cycle; long-term equity incentive earnings forecasts growth momentum .12-14 idexx laboratories inc 1.01 / 1.34 / 1.76 Yuan, "overweight," target price 28 yuan Investment Highlights:.. idexx laboratories inc Rip biological is the development, production, sales and technical services in one of the animal health products business Rip biological products, including veterinary biological products and veterinary Formulation two categories 276 varieties, covering animal disease prevention, diagnosis, treatment, and promoting growth and regulating idexx laboratories inc aspects of the immune system international animal health industry: industry idexx laboratories inc is highly concentrated, .10 M to change the pattern idexx laboratories inc of global idexx laboratories inc animal idexx laboratories inc health industry capacity $ 20.1 billion, 14 years of industry capacity is expected to exceed $ 22 billion international animal health industry is more mature, highly concentrated market, Top10 accounting for more than 80 percent since. In 2008, several important acquisitions were the international situation has undergone major changes in the industry. scale promote the development of domestic idexx laboratories inc farming animal health industry. rising labor costs, earnings volatility idexx laboratories inc farming, food safety requirements to promote China's large-scale farming to enhance the rate of acceleration from the backyard to the scale of animal idexx laboratories inc products from concept through "cost-saving" to "buy insurance idexx laboratories inc "transformation, with accelerated scale farming, domestic animal health industry will usher in rapid growth. domestic animal health industry before the market idexx laboratories inc gradually .08, the animal health industry is most concerned about animal vaccines, government procurement .09 After almost stagnant government procurement, large-scale farming accelerating rate, non-governmental procurement and veterinary preparations rapid growth, the industry gradually come to the market growth Keywords: routine idexx laboratories inc vaccines, veterinary preparations, veterinary product idexx laboratories inc that is to maintain the government. Bidding share, develop conventional vaccines; formulations, bulk drugs have great progress; idexx laboratories inc rich veterinary product line Rip biological recommend logic product reserves, business structure in line with industry trends;.. IPO equity idexx laboratories inc investment projects into the production release cycle; Equity Incentive provide long-term growth momentum. overweight rating, target price of 28 yuan. We Rip biological 2012-14 EPS forecast of 1.01 / 1.34 / 1.76 yuan, "overweight" rating, target price of 28 yuan.
1. Investment Highlights Rip biological products, including veterinary biological products and veterinary preparations two major categories of 276 varieties, covering animal disease prevention, diagnosis, idexx laboratories inc treatment, and promoting growth and regulating aspects of the immune system, the company's business and animal health products R & D, production, sales and technical services in one. International animal health industry for over a hundred years, in 2010 the capacity of the global industry $ 20.1 billion in 2014 to over 22 billion US dollars. In 2010 42% of animal health products for pets, food animals, cattle accounted for the highest, idexx laboratories inc followed by swine, poultry, sheep. International animal health industry has entered a relatively mature idexx laboratories inc industry stage, high market concentration, the top ten companies accounted idexx laboratories inc for more than 80%. As can be seen from Schering-Plough's history, M & A is the main expansion means international animal protection giants. Since 2008, several acquisitions were important for the international trade situation has undergone great changes, Merck acquired Schering-Plough, idexx laboratories inc Sanofi acquisition of Merial, Pfizer's acquisition of Wyeth. Rising labor costs, earnings volatility farming, food safety requirements to promote China's large-scale farming to enhance the rate of acceleration. In pigs, for example, the above (50) the slaughter accounted for more than 60% in 2009 size, but the criteria for the classification is not suitable for China's reality. From the backyard to scale, of the concept of animal health has gone from "cost-saving" to "buy insurance" transformation, with accelerated scale farming, domestic animal health industry will usher in rapid growth. And international animal health industry has a long history, a high concentration idexx laboratories inc of industry compared to the level of development of the domestic animal health industry, there is a big gap. Prior to 2008, the animal health industry's most concerned about: animal vaccines, government procurement. After 2009, government procurement idexx laboratories inc almost stagnant, while the ratio of large-scale farming has accelerated a trend of increasing non-government procurement market and veterinary preparations traditionally not taken seriously rapid growth, the domestic insurance industry is gradually moving towards the market. 2007-10, biological idexx laboratories inc products is the main income Rip organisms, the source idexx laboratories inc of profits, in 2011 changed greatly, and operating income increased by API, the proportion idexx laboratories inc of 26% of total revenue; government procurement biological products, veterinary preparations The income ratio significantly decreased, instead of government procurement to maintain a high growth, income share remained at around 40%. Rip biological idexx laboratories inc future growth Keywords are: routine vaccines, veterinary preparations, veterinary products. That is the basis for maintaining the share of government tenders, to develop conventional vaccines; there is substantial progress on preparations, pharmaceutical raw materials business; rich products for livestock (pigs, cattle) product line. Recommended Logic Rip organisms: (a) large-scale farming speed, non-governmental procurement, veterinary preparations market growth, Rip biological product reserves, business structure in line with industry trends. (Ii) IPO equity investment projects come on stream in 2012-13, entered the production release period, production will greatly enhance, improve the sharpest inactivated vaccine production capacity, expanding 244.6 percent. (Iii) Equity Incentive provide long-term growth momentum. Vesting conditions implied net profit CAGR of 33.2%, higher than the market average. Rip biological 2012-14 we forecast EPS of 1.01 / 1.34 / 1.76 yuan, the current dynamic valuation of 22.6 / 17.0 times, we give Rip biological "overweight" rating, target price of 28 yuan. 2. Rip biological Introduction 2.1. History is a Rip biological veterinary biological products and veterinary formulation research and development, production, sales and technical services in one of the high-tech enterprises, the company's products include veterinary biological products and veterinary preparations two major categories of 276 varieties, covering animal disease prevention, diagnosis, treatment, growth and other aspects of the regulation of immune mechanisms. idexx laboratories inc "Tianjin Rip Biotechnology Co., Ltd." (the "Rip biological") by the "Tianjin Rip Biotechnology Group Limited" (the "Rip limited") in April 2008 from the overall change, Rip Limited formerly known as "Tianjin Run Extension Biological Technology Co., Ltd.", founded in 2001, in November 2006 it changed its name to "Tianjin Rip Biotechnology Group Limited." Rip biological agents initially rely on veterinary products started, after the acquisition of Rip Baoding enter biologics. Rip biological There are currently six holding shares of a subsidiary, the main business is mainly operated by three specific subsidiaries, idexx laboratories inc including Rip Baoding is the company's main revenue source of profits, the company is also a major production base of biological products. IPO in the starting material, Rip Baoding, Tianjin Rip is a holding company, Hubei and Hunan Lung shore are joint stock companies, after the company completed the IPO, using its own funds and part of the raised funds, through continuous acquisition of shares, currently Rip has been a wholly idexx laboratories inc owned Tianjin, holding Hubei and Hunan Lung shore. The latest announcement will use the raised funds 70 million yuan to acquire 25% stake in Baoding Rip, when completed, will wholly owned Rip Baoding.
2.2 Rip industry position and competitive advantage is mainly engaged in biological products and veterinary preparations veterinary biological research and development, idexx laboratories inc production, consumption idexx laboratories inc and technology services, including veterinary biological products including the preparation (50 varieties) and veterinary preparations (226 species ) two categories of 276 varieties. Veterinary biological products company idexx laboratories inc in swine fever vaccine, blue ear pig disease vaccine for the national compulsory vaccination varieties. Rip Baoding national mandatory immunization biological products swine fever vaccine, one of the highly pathogenic idexx laboratories inc blue ear pig disease vaccine manufacturers. Technological innovation is one of the strengths of the company. . The company has one of the veterinary industry two five ministries awarded the "National Enterprise Technology Center" of the enterprise, "national IPR pilot work units," one of only two in the industry, with the Ministry of Personnel, that the " post-doctoral research station. idexx laboratories inc " The company and its subsidiaries in Tianjin Rip, Rip Baoding are national high-tech enterprises. The only company to have business casual idexx laboratories inc and Alice M. Terminalia PROPER stasis scattered independent intellectual idexx laboratories inc property rights is one of the intellectual property of oral transfer factor has two companies, in order to have a heat protectant live vaccine proprietary three companies one, to have one of PRRS vaccine proprietary three companies, to have cefquinome sulfate injection drug substances and intellectual property, one of seven companies. The company has a national class new veterinary certificate registered three, three new veterinary certificate of registration 9, four types of new veterinary certificate registered one, get one of the country's new veterinary idexx laboratories inc certificate of registration idexx laboratories inc for the last five years at most veterinary enterprises. In 2009, a total grant of a new veterinary certificate of registration 39, the company received 5, obtain a new certificate idexx laboratories inc of veterinary drugs for the year registered the largest enterprises. The company currently veterinary biologics market share of 2.6 percent, the company forward in poultry vaccine market business rankings. Rip biological 2011Q3 biological products, idexx laboratories inc veterinary preparations, pharmaceutical raw materials revenue accounting for respectively 53.38%, 20.75%, 25.41%. Biological products more than 60% non-government tenders revenue.
We found that global animal health industry's largest companies are large-scale integrated pharmaceutical company, its animal health business is only one of numerous business segments. In 2010, global animal health industry's largest four companies Pfizer, Merck, Merial, Bayer's animal health revenue over 10 billion US dollars, more than 50% of total global animal health industry. This suggests that after years of development, the international animal health industry has entered a mature stage of development, market share is relatively idexx laboratories inc concentrated, leading enterprises have obvious advantages. Since 2008, several acquisitions were important for the international animal health industry landscape changed greatly. Prior to 2009, Schering-Plough Animal Health is the largest business income in 2009 was the acquisition of Merck; the same year, Sanofi-Aventis idexx laboratories inc to $ 4 billion acquisition of Merck's stake in Merial, a wholly owned subsidiary of Almeria idexx laboratories inc ; Pfizer will acquire Wyeth Pharmaceuticals and its affiliated Fort Dodge Animal idexx laboratories inc Health. After these several acquisitions, idexx laboratories inc business name from the point of view, the income scale industry has changed dramatically in the top ten list. Like many multinational companies become industry giants Schering-Plough's growth process is accompanied by a number of important acquisitions. Schering-Plough's history can be traced back to 1851, Schering AG, established in Germany. In 1971, the Company and Schering Plough (a consumer products company idexx laboratories inc Tennessee) merged to form Schering-Plough. Schering-Plough's acquisition of Mallinckrodt established idexx laboratories inc a leading position in the poultry markets; thereafter turn Takeda animal health idexx laboratories inc business into the arm; in 2007, the company acquired Intervet BV (Netherlands Organon Biosciences Animal Health Department), not only enrich the product line, but also to achieve a geographical complementarity, animal health industry has become the world leader.
3.3 Domestic idexx laboratories inc General: large-scale farming to promote the development of the industry sustained development of China's animal husbandry industry, for the development of animal health care industry to provide a solid foundation. We believe that the following three factors in the past few years contributed to accelerate the increase in large-scale breeding ratio: (1) the minimum wage standards continue to rise, resulting idexx laboratories inc in the opportunity cost of the increase in the backyard, backyard farmers quit more; (2) Price ( meat, eggs), cost (corn, idexx laboratories inc soybean meal) and other volatility, large-scale farming in terms of specialization, economies of scale become increasingly prominent advantages; (3) In recent years, frequent food safety incidents, large-scale farming in product traceability, etc. obvious advantages. Over the past 10 years, China's pig industry scale significantly improved, above designated size (50 or more years of slaughter) pig farming accounted for less than 30 percent in 2000, in 2009 more than 60%, but a higher rate of the United States idexx laboratories inc and other large-scale countries, there is still a big gap.
For large-scale farming enterprises, disease transmission is likely to lead to huge economic losses (lots culling). Therefore, regular epidemic prevention work is necessary. Data show that China's first large-scale pig farming all medical expenses of the absolute amount of prevention, costs are higher than the proportion of small and medium-scale farming, vaccination costs and a positive relationship between the scale of farming. Medical quarantine costs account for lower production costs (less than 2%), similar to insurance cover for the breeding process, are less sensitive to business-to-prevention costs, the effect of the epidemic very seriously. With the acceleration of large-scale farming, large-scale breeding since 2008 medical quarantine idexx laboratories inc expenses growth rate was significantly higher than the backyard, in 2010 cross-sectional data also supports this conclusion.
Our animal vaccine industry has been subject to government regulation, before 2003 all state-owned enterprises, one from each province, after a limited release in 2003, private capital began to gradually enter the animal vaccine industry. After nearly a decade of development, although the income scale animal husbandry shares of central enterprises background is still far ahead in the industry, private enterprise has gained rapid development in the industry, and be listed. Current A-share listed idexx laboratories inc companies engaged in the business of veterinary biological products has six listed companies. We found that in all listed companies in the animal vaccine business, in addition to grazing stock, other biological products business in 2010 income mostly between 2 and 4 million, the growth rate mostly in the 10% -20%. And, over the past 10 years, except for grazing stock, there have been no animal idexx laboratories inc vaccine industry revenues continued to grow more than 400 million cases. We believe that the reason for this phenomenon is: the earlier development of the industry's enterprises are dependent on government bidding (compulsory vaccination). Prior to 2008, due to the large area of the bird flu, blue ear pig disease outbreaks and other government idexx laboratories inc procurement scale rapid growth in animal husbandry, Kim, Tian Kang and other companies is to make use of government procurement and its animal vaccine business to grow and develop. After 2009, the government forced the immune capacity of the stagnant market, while at the same time with the increase of China's total farming, increase the rate of large-scale farming, conventional vaccine (non-mandatory immunization) to usher in rapid development,
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