\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
Event: on February 15, 2022, the company released the performance express of 2021. In 2021, the company is expected to realize an operating revenue of 22.9 billion yuan, 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 non net profit deducted was 4.06 billion yuan, a year-on-year increase of 70.4%; The adjusted non IFRS net profit attributable to the parent company was RMB 5.13 billion, with a year-on-year increase of 41.1%.
The performance is at the upper limit of the notice and can be expected to increase continuously. In 2021, the overall business continued to maintain rapid growth and profitability continued to improve. It is estimated that the annual net interest rate in 2021 will be about 22.3% (year-on-year 2020, the same below, + 4.4pp), deducting the non net interest rate of 17.7% (+ 3.3pp), and the adjusted non IFRS parent net interest rate of 22.4% (+ 0.4pp). Quarterly, the revenue of 2021q4 is about 6.38 billion yuan (+ 35.2%), the parent company is about 1.53 billion yuan (+ 159.3%), the deduction is about 960 million yuan (+ 30.9%), and the adjusted non IFRS net profit is about 1.32 billion yuan (+ 21.7%). The growth rate of parent ownership is higher than that of adjusted non IFRS. We expect that it is mainly due to: ① the fair value of H-share convertible bond derivative financial instruments in 2021q4 non recurring profit and loss is about 470 million yuan (about – 670 million yuan in 2020q4) due to the fluctuation of H-share price; ② The company increased capacity expansion, increased depreciation and amortization brought by capacity release and accelerated the recruitment of new employees; ③ 2020q4 adjusted non IFRS net profit attributable to parent company has a high base.
The five sectors continue to shine, and the rapid growth of chemical business is expected to drive the acceleration of the overall business. 1) Wuxi chemistry: the crdmo business model of “end-to-end and integration” continues to be realized: the estimated revenue in 2021 is 14.09 billion yuan (+ 46.9%) ①small molecule drug discovery service (R): the revenue is + 43.2% year-on-year, laying the foundation for the sustained high growth of the back end. ② Cdmo (process R & D and production): “follow and win molecules” is progressing smoothly, and the revenue is + 50.0% year-on-year in 2021. We expect that with the continuous large-scale commercialization projects and the continuous launch of new production capacity, the revenue growth in 2022 is expected to nearly double that in 2021; 2) Wuxitesting: it is estimated that the revenue in 2021 will be 4.53 billion yuan (+ 38.0%), of which ① laboratory analysis and testing services: the revenue is + 38.9% year-on-year. If excluding drug analysis and testing services other than device testing, it will increase strongly by 52.1%; ② Clinical cro and SMO: the scale continues to expand, with revenue + 36.2%. 3) Biology business: it is estimated that the revenue will be 1.99 billion yuan (+ 30.0%) in 2021, with continuous and rapid growth. With the rapid growth of business and revenue in 2022, we expect to continue the momentum of rapid growth. 4) Cell and gene therapy ctdmo (wuxiatu): China is growing rapidly and is expected to return to the rapid growth track after the overseas epidemic recovery: the overall revenue is expected to be 1.06 billion yuan (- 2.8%), of which China’s year-on-year growth is about + 87%. We expect that with the gradual rise of new production capacity and the gradual recovery of the epidemic, the sector is expected to return to the high-speed growth track in 2022, Revenue growth is expected to exceed industry growth. 5) China new drug research and development service unit (wuxiddsu): it is estimated that the overall revenue will be 1.25 billion yuan (+ 17.5%) in 2021, maintaining steady growth.
Profit forecast and investment suggestions: according to the company’s performance express, we adjust the profit forecast. We expect the company’s revenue to be 22.869 billion yuan, 36.817 billion yuan and 42.650 billion yuan from 2021 to 2023 (22.249 billion yuan, 29.630 billion yuan and 38.891 billion yuan before adjustment), with a year-on-year increase of 38.30%, 60.99% and 15.85% (34.55%, 33.17% and 31.26% before adjustment), The net profit attributable to the parent company was 5.097 billion yuan, 7.673 billion yuan and 9.617 billion yuan (4.168, 5.625 and 7.563 billion yuan before adjustment), with a year-on-year increase of 72.19%, 50.53% and 25.34% (40.80%, 34.95% and 34.47% before adjustment). The company’s track is in a high boom, and the “integration, end-to-end” strategy is expected to consolidate competition barriers, drive the company’s long-term rapid growth and maintain the “buy” rating.
Risk warning events: the public materials used in the research report may have the risk of information lag or untimely update; Risk of loss of core technical personnel; Risk of industry R & D investment falling short of expectations; The risk that overseas business integration does not meet expectations; The risk of intensified industry competition; Exchange rate fluctuation risk.
