Porton Pharma Solutions Ltd(300363) (300363)
Event summary:
On November 30, the company announced that it had received a new batch of cdmo service purchase orders related to small molecule innovative drugs from a large pharmaceutical company in the United States. The cumulative contract amount in the past 12 consecutive months was USD 217 million, and the order delivery time was from 2021 to 2022. The customer contributed 103.46 million yuan of operating revenue to the company in 2020, accounting for 4.99% of the operating revenue of the current year.
Large orders catalyse high growth, and small molecule cdmo service strength is highlighted
The amount of this order is USD 217 million. We expect that most orders will be delivered in 2022, which will significantly catalyze the growth of the company’s short-term performance. As one of the earliest listed CXO companies in China, the company has strong cdmo service ability of innovative drug intermediates / APIs. The large orders announced this time fully demonstrate the recognition of international major customers for the company’s service ability, which will further help the company obtain subsequent high-quality orders.
The funnel structure of the project is stable and the pace of capacity release is accelerated
The company accelerated the release of production capacity, and the capacity utilization rate of Changshou 109 workshop expanded in June 2021 increased to 68% month by month, The acquisition of Hubei Yuyang Pharmaceutical (580m3) expanded the total capacity to 2000m3, providing sufficient capacity support for the company’s orders. The “funnel” pipeline structure of the company’s API cdmo sector tends to be stable. In the first three quarters of 2021, there were 315 service projects (+ 30%), including 213 clinical phase II and previous projects (+ 54%), 36 clinical phase III projects (+ 50%), and 95 new drug application and listing projects （+19%）。
Cgtcdmo orders have been delivered one after another, promising future growth space
The company’s gene cell therapy cdmo sector continues to expand its talent team and production capacity. In November 2021, Dr. Wang Yangzhou was appointed as the CEO. By 2021, the number of Q3 employees has expanded to 236. Suzhou Sangtian Island laboratory is expected to be put into use in November 2021. With the smooth delivery of cgtcdmo orders and the improvement of production capacity, the company’s service capacity has gradually been recognized by more customers. In September 2021, the company signed strategic cooperation with bosengji, Hong Kong Pharmaceutical oncolytic, Nanjing Kati and other five customers in lentivirus, oncolytic bacteria, car-t, AAV vector and other fields.
Accelerate the layout of business capabilities and realize the integrated service of “API + Preparation”
The company’s intelligent preparation outsourcing service base (phase I) was capped in November 2021. The company will accelerate the steps of equipment commissioning, verification and trial production, build a comprehensive service platform for preparation cdmo from R & D, clinical to commercialization, and continuously improve the one-stop “API + Preparation” Cdmo services. By 2021, Q3’s preparation cdmo team has reached 143 people, including 75 R & D personnel. The rapidly expanding talent team will also lay a solid foundation for the development of the company’s preparation business.
Profit forecast and investment rating
This order will bring greater flexibility to the company’s operating performance. We raised the company’s EPS from 2021 to 2023 to 0.86/1.40/1.68 yuan / share (formerly 0.85/1.15/1.49 yuan / share), and the corresponding PE was 115.79/71.28/59.63, maintaining the “buy” rating.
Risk warning: the R & D Progress of innovative drugs and the fluctuation risk of end market demand; There may be a risk that some orders cannot be fully fulfilled; New business investment risk; Exchange rate fluctuation risk; Environmental protection and safety risk
