\u3000\u3000 Porton Pharma Solutions Ltd(300363) (300363)
Event overview
The company has received a new batch of purchase orders from Pfizer Ireland pharmaceuticals, a multinational pharmaceutical company, and will provide contract customized R & D and production (cdmo) services. As of February 11, 2022, the total amount of new orders obtained by the company is 681 million US dollars. At present, the order has taken effect and the delivery time of the order is 2022.
Analysis and judgment:
The newly signed us $681 million large order of Pfizer will significantly increase the performance in 2022
On the basis of obtaining a total order amount of 217 million US dollars from a multinational pharmaceutical enterprise on November 30, 2021, the company once again announced the signing of 681 million yuan of Pfizer cdmo orders, which will directly increase the performance in 2022. On the other hand, the signing of Pfizer large orders will further deepen the strategic cooperation with Pfizer and verify the delivery capacity of cdmo large orders again. The direct cooperative customer of the newly signed Pfizer large order is Pfizer’s largest Irish production base in the world. Considering that Pfizer publicly stated in early November 2021 that the Irish factory will be the core production base of covid-19 drug paxlovid, we generally judge that this cooperation will achieve Porton Pharma Solutions Ltd(300363) deep binding with Pfizer’s Irish factory, Add certainty to the cooperation between further incremental orders and other orders in the future. Looking forward to 2022, the company’s small business will continue to achieve ultra-high performance growth based on the continuous growth of conventional orders, the continuous investment of new production capacity (Hubei Yuyang, etc.) and the thickening of relevant large orders.
The business inflection point was further established and the core competitiveness continued to improve
Cdmo industry is a high-profile track with equal emphasis on scientific and technological attributes (Engineer cluster and low-cost advantage) + asset attributes. As a core participant in small molecule cdmo industry, the company has ushered in an operation inflection point since 2019 after two consecutive years of strategic adjustment and transformation in 2017 and 2018, and has achieved brilliant performance for three consecutive years from 2019 to 2021, All further confirmed the changes in the fundamentals of the company.
Since the strategic transformation of the company in 2017, the R & D investment of the company has increased unprecedentedly, and various core technology platforms such as crystallization technology and active enzymes have been built. The number of BD has also continued to increase, the fundamentals and business capabilities have been rapidly improved and consolidated, the cro business has maintained sustained rapid growth, and the business structure has been more optimized and balanced. In the future, with the improvement of the company’s capacity utilization and cro personnel’s project management ability, the company’s gross profit margin and net profit margin will continue to improve, and the profit side growth rate is expected to continue to exceed the revenue side growth rate. In the long run, the biological drug CMO and preparation CMO arranged by the company will open a broader space for the company. The existing chemical drug cdmo business has a good track and fast growth speed, which is expected to promote the company to maintain a compound growth rate of 30-35% in the next few years.
Investment advice
Considering the signing of this large order, the performance expectation for 22-23 years was raised, that is, the revenue in 21-23 years was adjusted from RMB 3.096/4690/5954 billion to RMB 3.096/68.78/7706 billion, and the EPS was adjusted from RMB 0.96/1.54/2.00 to RMB 0.96/2.24/2.56, corresponding to the closing price of RMB 61.32/share on February 11, 2022, and the PE was 64.11/27.32/23.95 times respectively, maintaining the “buy” rating.
Risk tips
Orders and revenue growth were lower than expected; The gross profit margin and net profit margin cannot be continuously improved.
