\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
Key investment points
Performance: strong growth in line with expectations
Performance: in 2021, the company realized revenue of 22.902 billion (YoY 38.50%), net profit attributable to parent company of 5.097 billion (YoY 72.19%), net profit attributable to parent company of 4.064 billion (YoY 70.38%), net profit attributable to parent company of 6.381 billion (YoY 35.16%), net profit attributable to parent company of 1.535 billion (YoY 159.29%) and net profit attributable to parent company of 958 million (YoY 31.05%). The adjusted non IFRS net profit in 2021 was 5.131 billion and that in 2021q4 was 1.321 billion (yoy10.37%). We expect the growth rate of Q4 adjusted net profit to decline month on month, mainly due to the impact of Q4 expense side accrual and the high base of 2020q4. The performance in 2021 is in line with our expectations.
Splitting: strong growth of cdmo and drug analysis and testing business continues to drive
The chemical business revenue was 14.087 billion yuan, with a year-on-year increase of 46.93% (including 43.24% of drug discovery revenue and 49.94% of cdmo revenue), the testing business revenue was 4.525 billion yuan, with a year-on-year increase of 38.03% (including 38.93% of laboratory analysis and testing revenue and 36.20% of clinical cro & SMO revenue), the biology revenue was 1.985 billion yuan, with a year-on-year increase of 30.05%, the ATU revenue was yoy-2.79% and the ddsu revenue was yoy17.00% 47%。 It can be seen from the performance of cdmo business in 2021 that the growth of cdmo business is still the main driving force.
Acceleration: optimistic about the performance acceleration trend in 2023
The company’s announcement mentioned that “the company expects the revenue growth of the chemical business sector in 2022 to nearly double that of 2021”, which also means that the revenue of the chemical business department of the company is expected to be 90% + in 2022. Considering the strong continuity of the growth trend of testing business, biological business and ATU business in 2022 stated in the company’s announcement, We raised the year-on-year growth rate of overall revenue in 2022 to 65% +, which is highly recommended!
Profit forecast and valuation
Considering that the guidance on the year-on-year growth rate of 2022 revenue of the chemical business department in the company’s performance express exceeded our previous expectations, we raised our performance expectations for 2022-2023. We predict that the company’s EPS from 2021 to 2023 will be 1.72, 2.94 and 3.44 yuan / share (the last predicted values were 1.69, 2.27 and 3.00 yuan / share respectively), and the closing price on February 15, 2022 corresponds to 32 times of PE in 2022 (27 times of PE in 2023). It is still in a relatively undervalued position and maintains the “buy” rating.
Risk tips
Risk of declining prosperity of global innovative drug R & D investment; Risk of business decline due to unfavorable international expansion; Each competitive risk; Exchange risk; Uncertainty risk caused by fair value fluctuation
