Porton Pharma Solutions Ltd(300363) (300363)
matter:
The company announced that it had received large cumulative orders, amounting to US $217 million. The order will be delivered in 2021 and 2022.
Ping An View:
The Yuyang plant is opened to provide space for production scheduling:
Based on the urgent terminal demand, international giants have recently signed large orders with Chinese cdmo enterprises for many times to verify the logic of “outsourcing capacity transfer to China”. China has a large number of chemical pharmaceutical engineers and high density. It is one of the most ideal countries to undertake large-scale orders. According to our speculation, most of the large orders of boten will be delivered in 2022, which is expected to significantly improve the performance in the coming year.
The continuous growth of regular orders and the addition of large orders put forward higher requirements for the production capacity of boten. The company completed the delivery of workshop 109 in the first half of the year. At present, workshop 109 has entered an efficient operation state. In August, the company acquired Hubei Yuyang to further expand production capacity. Although Yuyang has no GMP qualification, it can be used for large-scale production of RSM products, so that other high-performance workshops can focus on the production of high value-added products.
New production capacity of macromolecules has been implemented, and emerging businesses have taken shape:
While the traditional small molecule pharmaceutical business is booming, the company’s macromolecular business is also gradually maturing. The company’s new CGT laboratory on Sangtian island has been completed and can be used for AAV process development and laboratory scale production. After that, more multi-purpose and large-scale pilot workshops and other facilities will also be put into operation in 2022. As relevant orders begin to contribute revenue, the company’s CGT business will become profitable.
Raise the profit forecast and maintain the “recommended” rating: the company’s business capacity continues to improve and is widely recognized by customers everywhere. The company acquired + self built to obtain more capacity, so as to meet the growing demand for orders. Considering the effect of large orders on the subsequent performance of the company, the EPS forecast for 2021-2023 is adjusted to 0.91, 1.58 and 1.88 yuan (the original forecast is 0.84, 1.13 and 1.50 yuan), maintaining the “recommended” rating.
Risk tips: 1) if the investment and outsourcing ratio of global innovative drugs is lower than expected, it will affect the development of CMO industry; 2) Failure in drug research and development, early termination of projects, or less than expected sales of drugs after listing may lead to the failure of large-scale production of corresponding orders; 3) Production accidents and warning letters from regulatory authorities may lead to the loss of orders and even customers; 4) Exchange rate fluctuations may cause exchange losses.
