\u3000\u3000 Porton Pharma Solutions Ltd(300363) (300363)
Event: the company recently received a new batch of purchase orders from Pfizer Ireland pharmaceuticals, a multinational pharmaceutical company, for which the company 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, which is expected to be delivered in 2022.
Comments:
This major order will significantly improve the company’s performance in 2022. On January 17, 2022, the company released the performance forecast of the company in 2021, and the annual revenue of 2021 is expected to be 3-3.1 billion yuan. The total amount of new orders obtained from this major order is 681 million US dollars, which exceeds the annual revenue of last year. This major order will significantly improve the company’s performance in 2022. Pfizer Ireland branch is the direct partner of the newly signed Pfizer large order. 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 speculate that this order is covid-19 small molecule paxlovid. Pfizer expects the sales of this variety to exceed 22 billion US dollars in 2022.
The company’s new capacity has been matched. After acquiring 70% equity of Hubei Yuyang Pharmaceutical Co., Ltd. for 172 million in August last year, the company gradually began to transform the workshop to better meet the production requirements of boten project. The newly added capacity in 2022 is mainly 580m3 in Yuyang, Hubei Province and 170m3 in 109 multi-functional workshops put into operation in June 2021. The newly added capacity of small molecules is about 60%. On February 10, the company deliberated and approved the proposal on phase I project of pharmaceutical intermediate construction project (workshop 301), announcing that it will invest 260 million yuan to expand the cdmo capacity of API located in Changshou production base (the planned reactor volume is 142.6 cubic meters), which is expected to be put into operation in March 2023. The signing of this major contract will make full use of the company’s new production capacity.
The company’s technical and service capabilities have been further affirmed. The company began its strategic transformation in 2017, with increasing R & D investment. The company started strategic cooperation with Codexis in 2018 and obtained the global exclusive cdmo authorization of Codexis biocatalysis technology. Using its leading enzyme development technology, it effectively speeds up the research and development progress and improves the production efficiency. At present, the gap between the company’s technical capacity and technical reserves and the front-line small molecule cdmo enterprises has become smaller and smaller. The company continues to consolidate the stable business partnership established with key customers through its technical and service capacity. The signing of this major contract has further affirmed the company’s technical and service capacity. This major order also shows the deep participation of Chinese cdmo enterprises in the global R & D and production of covid-19 drugs, which fully illustrates the global leadership of China Meheco Group Co.Ltd(600056) manufacturing supply chain.
Give a recommendation rating. The company continues to improve its technical level and expand its production capacity, and its future growth can be expected. It is estimated that the company’s earnings per share in 2021 / 2022 will be 0.96/1.92 yuan respectively, and the current share price corresponding to PE will be 64 / 32 times respectively, giving the company a “recommended” rating.
