Porton Pharma Solutions Ltd(300363) (300363)
Event overview
The company has received a new batch of purchase orders from a large pharmaceutical enterprise in the United States. The orders are cdmo orders related to a small molecule innovative drug of the customer, with a total order scale of about USD 217 million and order delivery time from 2021 to 2022.
Analysis and judgment:
Signed cdmo orders totaling about USD 217 million, significantly increasing future performance
The company has signed a small molecule cdmo order of about US $217 million with a multinational pharmaceutical enterprise, which will be delivered from 2021 to 2022, which is expected to significantly increase the company’s future performance. From 2018 to 2020, the company and the multinational pharmaceutical enterprise in this cooperation achieved revenue of 38 million yuan, 58 million yuan and 103 million yuan respectively, and became the top five customers of the company in 2020. On the one hand, the determination of this strategic purchase order will further deepen the cooperative relationship with the multinational pharmaceutical enterprise and realize the possibility of more potential order cooperation in the future, On the other hand, it also demonstrates the company’s ability to deliver large cdmo orders and proves that the company has become one of the world’s leading cdmo suppliers.
The business inflection point was further established and the core competitiveness continued to improve
Cdmo industry as a technology attribute (Engineer cluster and low-cost advantage) + a high-profile track with equal emphasis on asset attributes. As a core participant in the small molecule cdmo industry, the company has ushered in an operating inflection point since 2019 after two consecutive years of strategic adjustment and transformation in 2017 and 2018. The brilliant performance of operating performance for two consecutive years in 2019 and 2020 further confirms the changes in the fundamentals of the company 。
Since the company’s strategic transformation in 2017, the R & D investment has increased unprecedentedly, and various core technology platforms such as crystallization technology and active enzymes have been built. The number of BD has also continued to increase, the fundamentals and business capacity have been rapidly improved and consolidated, the cro business has maintained sustained rapid growth, and the business structure has been more optimized and balanced. In the future, with the improvement of the company’s capacity utilization and cro personnel’s project management ability, the company’s gross profit margin and net profit margin will continue to improve, and the profit side growth rate is expected to continue to exceed the revenue side growth rate. In the long run, the biological drug CMO and preparation CMO arranged by the company will open a broader space for the company. The existing chemical drug cdmo business has a good track and fast growth speed, which is expected to promote the company to maintain a compound growth rate of 30-40% in the next few years.
Investment advice
Considering the signing of large orders, the company raised the performance forecast for 21-22 years, that is, the revenue in 21-23 years increased from RMB 2867 / 3868 / 5214 million to RMB 2967 / 4868 / 5214 million, and the EPS increased from RMB 0.89/1.27/1.75 to RMB 0.92/1.60/1.75, corresponding to the closing price of RMB 100.10/share on November 30, 2021, and the PE was 109.03/62.47/57.19 times respectively, maintaining the “buy” rating.
Risk statement
Orders and revenue growth were lower than expected; The gross profit margin and net profit margin cannot be continuously improved.
