Asymchem Laboratories (Tianjin) Co.Ltd(002821) (002821)
event:
On November 28, 2021, the company announced the signing of major contracts for daily operation. The announcement shows that Jilin Asymchem Laboratories (Tianjin) Co.Ltd(002821) Pharmaceutical Chemistry Co., Ltd., a wholly-owned subsidiary of the company, has signed a new supply contract with customers to continuously provide customers with cdmo service of small molecular chemical innovative drugs. The single contract amount is about 2.72 billion yuan. At present, the contract has been signed and entered into force, The delivery time is 2022.
comment:
Two consecutive large orders have landed, and the business will grow strongly next year. Following the order of USD 480 million signed on November 16, 2021, the company obtained another order of RMB 2.72 billion. Both orders are small molecule commercial cdmo contracts. We expect that the performance of small molecule commercial cdmo will double in 2022, superimposed with small molecule clinical cdmo business and emerging sector business, and the performance will increase explosively in 2022.
Continuous expansion of production capacity to ensure order execution. The 2021 interim report disclosed that 1390m3 capacity will be released in the second half of 2021, 1500m3 capacity will be added in 2022, and the capacity will reach 5890m3 in 2022, which can support the smooth execution and delivery of orders. At the same time, we expect that with the technical improvement and process optimization in the production process, there is still room to improve the capacity utilization.
Large orders enhance the company’s reputation, highlight its strong strength and promote the company’s long-term good development. The company’s performance explosion next year will bring a very high base and put pressure on the performance of the next year, but we believe that two consecutive large orders will greatly enhance the company’s global popularity, form a good reputation for technology and service, and help the company expand new customer groups and order types. According to the disclosure of China Daily, the company has established cooperative relations with 15 of the top 20 pharmaceutical enterprises in global sales in 2020, and there is still room to expand its customer base.
With the dual listing of a + H shares, the company’s development has entered the fast lane and continued to improve its global leading position. On September 22, 2021, Asymchem Laboratories (Tianjin) Co.Ltd(002821) H-share listing application was approved by the CSRC. It is expected to log in H-shares within the year. The raised funds will continue to build small molecule cdmo and emerging sector business, so as to promote the long-term development of the company. We believe that the company is currently in a critical period of accelerating the construction of an integrated platform. Large orders exceeding expectations fully ensure the rapid growth of performance, provide more time and funds for the development of emerging business segments, and provide a solid foundation for the company to accelerate its upgrading.
Profit forecast: considering the performance increment and long-term benefits brought by large orders, we raised the profit forecast. It is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 4.384 billion, 7.473 billion and 9.102 billion, with a year-on-year increase of 39.2%, 70.4% and 21.8%; The net profit attributable to the parent company was RMB 1.030 billion, 1.757 billion and 2.197 billion respectively, with a year-on-year increase of 42.7%, 70.5% and 25.1%, corresponding to 113 / 67 / 53 times of PE from 2021 to 2023.
Risk factors: increased industry competition, China’s international policies, loss of core technicians and other risks.
