Following the development of technology, participate in the drug R & D and production process in multiple fields and dimensions. At present, the global cdmo industry is in the golden age of a new round of pharmaceutical R & D wave. After years of development, it presents a variety of character situations: from a regional perspective, Europe and the United States cdmo occupy the main global markets, but due to human costs, environmental pressure, capacity allocation and other reasons, the global capacity continues to transfer to China, India and other countries; In terms of fields, small molecule cdmo is in the ascendant and in the period of industrial upgrading, large molecule cdmo is in the early stage of rapid development and high industry concentration, cgtcdmo track is hot in emerging fields, and leading companies have arranged to seize the market one after another; From the perspective of dimensions, the leading cdmo advantageous businesses continue to upgrade products, layout emerging businesses and upstream and downstream businesses to seize the market. The characteristic cdmo focuses on developing advantageous businesses, expanding production capacity and improving technical strength and competitiveness. Other cdmos continue to undertake the transfer of production capacity, build advantageous businesses and increase strength to break the barriers to competition.
With cost reduction and efficiency enhancement, comprehensive services and rising demand, the prosperity of the global cdmo industry continues to rise, which is expected to become a $100 billion market. By comparing the data of representative companies, it can be found that the per capita cost of global cdmo companies is less than that of global pharmaceutical companies, and cdmo companies can obtain a net profit margin similar to that of pharmaceutical companies under the condition of low gross profit margin, which has a significant cost advantage. Policy orientation, population aging and the emergence of emerging technologies promote the growth of pharmaceutical market scale and R & D investment, and the lengthening of new drug R & D cycle, the decline of investment return and the rise of comprehensive cost push up the demand and penetration of cdmo. According to Frost & Sullivan statistics, in 2020, the R & D expenditure of global pharmaceutical enterprises reached US $204.8 billion, with a year-on-year growth rate of 12%, and the scale of global cdmo industry was about US $55.4 billion, The growth rate is about 13%, and the scale of the global cdmo industry is expected to exceed US $100 billion in 2025.
The status of China's cdmo industry continues to improve, and the development of local medicine is expected to drive the industry to create brilliance. According to Frost & Sullivan data, the industry scale of China's cdmo industry in 2020 was about 31.7 billion yuan, with a growth rate of about 38%. The growth rate in the past five years and the next five years will continue to be higher than the global average growth rate. We believe that the driving factors of China's cdmo industry can be divided into three categories: 1) sustainable driving factors: China's engineer bonus and policy innovation orientation; 2) Medium and long term drivers: global capacity transfer (including the additional impetus brought by the epidemic); 3) Long term driving factors in the future: long-term opportunities brought by the improvement of the supply chain status of China's cdmo enterprises and the rise of China's innovative drugs and emerging technologies. The development and future of cdmo industry are deeply related to the pharmaceutical industry. The development of domestic medicine is expected to provide new impetus for the industrial upgrading and long-term development of China's cdmo industry.
Investment suggestion: focus on high-quality companies with large-scale advantages, differentiation ability and expanding business scope in China, such as Wuxi Apptec Co.Ltd(603259) , Porton Pharma Solutions Ltd(300363) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Yaoming biology, Pharmaron Beijing Co.Ltd(300759) , Heyuan biology, etc.
Risk factors: policy changes, international relations, intensified industry competition, less than expected development of the pharmaceutical industry, lower rate of pharmaceutical R & D investment or outsourcing services, foreign exchange fluctuations and other risks.
