\u3000\u3 Shengda Resources Co.Ltd(000603) 127 Joinn Laboratories (China) Co.Ltd(603127) )
Key investment points:
Event: on February 25, 2022, the company released the annual performance express of 2021. The operating revenue in 2021 was 1.517 billion yuan, a year-on-year increase of 40.99%; The net profit attributable to the shareholders of the listed company was 557 million yuan, a year-on-year increase of 76.83%; The net profit attributable to shareholders of listed companies after deducting non profits was 530 million yuan, with a year-on-year increase of 81.51%; The basic earnings per share is 1.51 yuan.
The core business of the company is drug preclinical research services. Preclinical research services have professional barriers and can only be carried out in professional GLP laboratories. The company has two GLP laboratories in Beijing and Suzhou, has established a systematic technical platform for preclinical drug evaluation and GLP quality management system, and has passed the GLP certification and inspection in China and many countries, including international institutions. Regardless of the facility area, evaluation varieties and professionalism, the company ranks at the leading level in the fine molecule industry.
Excluding the changes in the fair value of wealth management income and investment Changchun Bcht Biotechnology Co(688276) , the growth rate of the company’s revenue end in 2021 was close to 60%, and the main reasons for the performance growth were: 1) in the normalization of epidemic prevention and control, China’s innovative drugs entered a new stage of development, the importance of class 1 innovative drugs was highlighted, and the demand for preclinical R & D services of innovative drugs continued to flourish, In 2021, the company’s orders continued to maintain rapid growth; New orders signed throughout the year were better than 2.8 billion yuan. By the end of 2021, orders on hand had exceeded 2.9 billion yuan. Compared with the same period of the previous year, it increased by 71% (60% year-on-year in 2020), and the on-hand orders showed an accelerated growth trend; 2) Through the expansion of scientific research and technical team and the optimization and improvement of test facilities and project management processes, the company has continuously improved the utilization rate of laboratory capacity, ensured the efficient execution of on-hand orders and accelerated the order turnover speed.
Tracking the development of upstream and downstream industrial chains. The upstream of the company is experimental animals, including small rodents, mainly white mice and large primates, chimpanzees, etc. in 2021, the company’s animal procurement cost continues to rise, but the company can pass it on; Guangxi monkey factory has officially started construction in November 2019 and is expected to reach production in three years. In terms of downstream clinical business, the company’s main business is drug early clinical trial services (clinical phase I and be trials). In 2021, with the mitigation of the epidemic, the company undertook a number of phase I and phase II clinical trials, which are in orderly progress.
The capacity of the laboratory will be fully expanded in 2022. At present, the total capacity of the company’s laboratory is 31500 square meters, and the capacity utilization rate exceeds 90%. Considering the growing order demand, the new animal property planned by the company in Suzhou has been expanded from 5400 square meters to 7400 square meters, and the laboratory area of 1500 square meters will be increased. At present, the project has been put into use. In the second half of 2022, the company plans to build 20000 square meters of animal quarantine facilities in Suzhou. In the future, all animal quarantine facilities will be transferred here, so as to improve the utilization efficiency of the original production capacity. At the end of 2023, the company’s Guangzhou and Chongqing bases undertaking business in South China planned a phase I production capacity of 18000 square meters and 20000 square meters, which is expected to continue to be put into operation to meet the company’s growing capacity demand.
Maintain the company’s “buy” investment rating. Raise the company’s EPS in 2021, 2022 and 2023 to 1.51 yuan, 1.93 yuan and 2.53 yuan respectively. According to the closing price of 114.94 yuan / share on February 28, 2021, the corresponding PE is 76.12 times, 59.55 times and 45.43 times. Considering that the future growth of the company is relatively certain, maintain the company’s long-term “buy” investment rating.
Risk warning: the progress of order confirmation is lower than expected
