\u3000\u3000 Pharmablock Sciences (Nanjing) Inc(300725) (300725)
Events
On January 26, Pharmablock Sciences (Nanjing) Inc(300725) released the performance forecast. It is expected to achieve a revenue of 1.18-1.23 billion yuan in 2021, with a year-on-year increase of 15% - 20%; The net profit attributable to the parent company was 480-500 million yuan, with a year-on-year increase of 160% - 170%; The net profit attributable to the parent company after deducting non profits was 230-240 million yuan, with a year-on-year increase of 30% - 40%, and the performance achieved stable growth.
Brief comment
The profit side of Q4 fluctuates slightly, which is expected to be a temporary impact. In a single quarter, the company expects to achieve an operating revenue of RMB 277-327 million in 2021q4, with a year-on-year increase of - 6.7% to 10.1%; The net profit attributable to the parent company was 38-58 million yuan, with a year-on-year increase of - 9.5% to 38.1%; The net profit attributable to the parent company after deduction was 29-39 million yuan, a year-on-year decrease of 0% - 25.6%. We expect that small fluctuations in Q4 profit end are mainly affected by exchange gains and losses and temporary expenses.
In the future, the production capacity will be gradually released and the performance will achieve stable growth. The company's performance in 2021 has achieved stable growth. We expect that the main driving factors are as follows: 1) in the case of no significant growth in production capacity and fluctuations in large orders, the company has improved its business scale by continuously optimizing its structure, improving its operating efficiency and improving its capacity utilization, so as to achieve stable growth at the revenue end; 2) The company continued to carry out process innovation, route optimization and large-scale production, and achieved a stable increase in gross profit margin. We expect that the production capacity will be gradually released in 2022 and the future performance will achieve stable growth.
Deepen the integrated layout of the industrial chain and steadily promote the new drug R & D business. The company will continue to deepen the integrated layout of the industrial chain and accelerate the construction of an integrated cdmo service platform of "intermediate + API + Preparation", so as to ensure the compliance, stable and sustainable supply of products required by customers' projects. At the same time, the company will continue to strengthen the application of innovative technologies and apply innovative chemical technologies such as continuous flow chemistry, micro packed bed and heterogeneous catalysis to large-scale production. In addition, the company continues to increase investment in new drug R & D business and strengthen the construction of three core technology platforms for innovative drug discovery (FBDD / del / Virtual Library). Subsequent foreign cooperation may bring additional profit elasticity.
Investment advice
We expect EPS to be 3.20/2.67/3.60 yuan and corresponding PE to be 29 / 35 / 26 times respectively from 2021 to 2023, maintaining the "buy" rating.
Risk tips
R & D falls short of expectations, sales fall short of expectations, raw material prices rise, exchange rate fluctuations, safety production and environmental protection, new business development falls short of expectations, loss of core technicians, lifting the ban risk, dependence risk of key customers, etc.
