\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 63 Porton Pharma Solutions Ltd(300363) )
Key investment points
Performance: high growth continues, and the deduction caused by accounting change is not slightly low
On February 28, 2022, Porton Pharma Solutions Ltd(300363) released the performance express. In 2021, the revenue was 3.105 billion yuan and yoy was 4.9 billion yuan 87%, net profit attributable to parent company 524 million, yoy 62%, deduct net profit not attributable to parent company 503 million, yoy 74.42%. Among them, the revenue of 2021q4 is 1.075 billion yuan and yoy is 84.4 billion yuan LG%, net profit attributable to parent company: 163 million yuan, yoy91.5% 10%, deducting 150 million yuan of net profit not attributable to parent company, and 118.68% of yoy. The performance forecast released by the company on January 16, 2022 shows that the net profit deducted from non parent company in 2021 is 519548 million, and the quick report value is slightly lower than the forecast value. We speculate that the loss of 31 million yuan of relevant joint-stock companies (Haibu pharmaceutical, Runsheng pharmaceutical, etc.) may be included in the investment income due to the accounting changes brought by the audit.
The profitability of small molecules has reached the first-line level
After deducting losses from new businesses, the company’s small molecule net profit in 2021 was 639 million, with a net interest rate of 20.84%, an increase of SPCT year-on-year. The net interest rate of 2021q4 was 17.55%, up 3.24pct year-on-year, reaching a higher level in the industry Porton Pharma Solutions Ltd(300363) in 2021, the company continued to prove the continuous improvement of cdmo capacity under the resonance of product structure adjustment, technology optimization and improvement, scale effect and management ability.
Preparation + CGT cdmo accelerated propulsion
In 2021, the loss of new business was 106 million. We estimated that the loss of 2021q4 was about 36.8 million, and the promotion of new business accelerated. Considering the construction of the company’s new capacity in 2022, we estimate that the loss scale in 2022 may be maintained on the basis of accelerated revenue recognition.
Optimistic about big orders and new boten
After the company successively announced large orders of US $900 million, the market is generally worried about the sustainability of the company’s performance in 2022 and 2023, but we believe that the sustainability of orders, capacity fulfillment and turnover rate may exceed expectations. On the 28th, the company also announced that it would increase capital to Jiangxi Boteng to build production bases including 609 workshop, 610 workshop, etc., which is expected to be put into use in December 2023. We believe that in 2022, the company is expected to seize the historical opportunity brought by large orders, increase investment in R & D, management and capital expenditure, and accelerate the construction of new business segments and small molecule new platforms.
Profit forecast and valuation
Considering the delivery cycle of the company’s orders, the increase of new fixed assets and the turnover rate of fixed assets from 2022 to 2023, we expect the company’s EPS to be 0.97, 2.25 and 3.26 yuan / month from 2021 to 2023, corresponding to the closing price on February 28, 2022, and PE to be 36 times in 2022, maintaining the “buy” rating.
Risk tips
The volatility of the impact of depreciation of new fixed assets, equity incentive and exchange on apparent performance; Volatility of profit cycle of new business: the prosperity of investment and financing of innovative drugs has declined.
