\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
Events
On February 15, Wuxi Apptec Co.Ltd(603259) released the performance express for 2021. It is expected to achieve a revenue of 22.9 billion yuan in 2021, a year-on-year increase of 38.5%; The net profit attributable to the parent company was 5.1 billion yuan, a year-on-year increase of 72.2%; The net profit attributable to the parent company after deducting non profits was 4.06 billion yuan, with a year-on-year increase of 70.4%, and both revenue and profit maintained strong growth.
Brief comment
Multiple business units achieved more than expected growth. In 2021, wuxichemistry achieved a revenue of 14.09 billion yuan, with a year-on-year increase of 47.0%. We expect: 1) the front-end small molecule drug discovery business maintained a high growth rate, with a year-on-year increase of about 43.2%; 2) The back-end process R & D and production business adhered to the molecular strategy and continued to build an integrated end-to-end service capacity, with a year-on-year increase of 50.0%. In addition, wuxitesting and wuxibiology maintained strong growth, with revenue of 4.53 billion yuan and 1.99 billion yuan respectively, with a year-on-year increase of 38.0% and 30.1%.
Wuxiatu and wuxiddsu have full growth potential. In 2021, wuxiatu achieved a revenue of 1.03 billion yuan, a year-on-year decrease of 2.8%, mainly due to the rapid year-on-year growth of business revenue in China (+ 87%), which made up for the delay in the submission of listing applications of some customers in the United States. In the future, the capacity-building of this sector will continue to improve, the capacity will expand rapidly, and the orders will be full (China & Overseas). It is expected to enter the rising cycle in 2022, and the growth rate of the company’s revenue is expected to exceed that of the industry. In addition, wuxiddsu achieved a revenue of 1.25 billion yuan, a year-on-year increase of 17.5%. In the long run, with the continuous promotion of the project pipeline, the net interest rate and roe are expected to continue to improve.
The prosperity of the industry is high, there are abundant orders on hand, the growth in 22-23 years is higher than expected, and the growth certainty of the company is strong. Benefiting from the strong demand for overseas pharmaceutical innovation services (global industrial transfer + industrial upgrading) and the rising demand for China Meheco Group Co.Ltd(600056) innovation services, China’s CXO industry as a whole remains in a high boom state. The demand for chemical business orders of the company is strong and continues to exceed expectations. It is expected to grow by more than 90% in 2022. As an industry leader, the company has obvious advantages of comprehensive platform and strong certainty of future growth.
Profit forecast and investment suggestions
Considering that the chemical sector and other businesses continued to exceed expectations, we raised the net profit attributable to the parent company from 2021 to 2023 to RMB 5.097/7765/9528 billion (18% / 44% / 40% respectively), and the corresponding PE was 54 / 36 / 29 times respectively, maintaining the “buy” rating.
Risk tips
Covid-19 epidemic aggravation risk, order execution less than expected risk, overseas supervision risk, ban lifting risk, core technical personnel loss risk, IP protection risk, investment risk, exchange rate fluctuation risk, raw material price rise risk, safety production and environmental protection risk.
