Leader in oncology drug pharmaceutical efficacy analysis; earnings growing fast
​Resume coverage with a BUY rating: Crown Bio focuses on developing platforms for pharmaceutical efficacy analysis of oncology and diabetes drugs. It is also the leader in the Patient-Derived Xenograft (PDX) field. We believe the trends of target therapy and precision medicine will continue to drive the company’s growth. We expect sales in the next 3-5 years to continue >30% YoY growth annually, and operating leverage will maintain annual net profit growth at >50% YoY. Crown Bio made a turnaround after sales reached economies of scale in 2015. 2015/1-3Q16 EPS came in at NT$0.68/0.67 (adjusted by post-IPO capital of NT$1.45 bn). The company is currently trading at 47.1/28.8/17.1x 2016/17/18F P/E, implying a 2015-18F net profit CAGR of 65%. We believe the valuation is undemanding. Our TP of NT$82 is derived from the average of our DCF, P/S, and P/E valuations, equivalent to 45x/27x our 2017/18F EPS forecasts.
CROWN BIOSCIENCE INTERNATIONAL is a Taiwan-based company mainly engaged in providing translational research platform and efficient drug discovery solutions. The Company focuses on the treatment of cancer and metabolic diseases preclinical drug research, and providing new drug efficacy evaluation platform for pharmaceutical manufactures and biotechnology companies. It main products and services include cell biology, proteins study, cell source tumor animal models, anthropogenic tumor animal models, among others.
Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.
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