\u3000\u3000 Asymchem Laboratories (Tianjin) Co.Ltd(002821) (002821)
Key investment points
Orders: continued additional verification of key customer recognition, catalyzing high performance growth in 2022
The company announced that “the company’s subsidiaries have signed a new batch of supply contracts for related products with customers, and the contract amount is equivalent to about RMB 3.542 billion”. We expect that the two batches of orders signed in November 2021 may be the same project for the same major customer. At present, the company has obtained cdmo orders for this product totaling about RMB 9.3 billion (US $481 million + 2.720 billion + 3.542 billion)
We believe that this addition is likely to be mainly based on the company’s good delivery record with customers, compliance capacity layout and timely delivery ability. Considering that the additional order is normally fulfilled under the contract and the delivery of the order is completed in 2022, we believe that the additional order is expected to continue to catalyze the company’s performance in 2022.
Capacity: release is accelerated, and large orders can be delivered normally
Referring to the company’s 2021 interim report, which disclosed that 2021h2 and 2022h1 are close to the rhythm of 3000 cubic meters of new production capacity, we expect that the company can meet all cdmo orders signed with key customers before. We expect that this innovative drug variety may be related to covid-19 treatment, and the output value of relevant orders may significantly exceed that of other innovative drug products. Therefore, we believe that the company has a high probability of normal delivery of cdmo product orders signed by major customers in 2022.
Profit forecast and valuation
Considering that the newly signed orders will increase the performance in 2022, we raised the company’s profit expectation in 2022. We expect the company’s EPS to be 4.00, 8.89 and 9.50 yuan / share from 2021 to 2023 (the previous forecast was 4.00, 8.16 and 8.34 yuan / share from 2021 to 2023). The closing price on February 18, 2022 corresponds to 34 times of PE in 2022 (32 times of PE in 2023), maintaining the “buy” rating.
Risk tips
The risk of declining prosperity of global innovative drug R & D investment, the risk of new business expansion falling short of expectations, competition risk, exchange risk, the risk of performance falling short of expectations, and the risk of new production capacity falling short of expectations.
