\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 63 Porton Pharma Solutions Ltd(300363) )
Event: Porton Pharma Solutions Ltd(300363) released the annual performance express of 2021. In 2021, the estimated operating revenue is RMB 3.105 billion, with a year-on-year increase of 49.87%; The net profit attributable to the parent company is expected to be 524 million yuan, a year-on-year increase of 61.49%; The non net profit deducted is expected to be 502 million yuan, a year-on-year increase of 74.42%.
Viewpoint: 2021 will come to a successful conclusion, and 2022’s large orders will drive the performance to a higher level!
Look at Q4 alone: it is estimated that the operating revenue is 1.075 billion yuan, with a year-on-year increase of 84.2%, the net profit attributable to the parent company is 163 million yuan, with a year-on-year increase of 91.1%, and the non net profit deducted is 150 million yuan, with a year-on-year increase of 118.7%. The growth rate of Q4 revenue and profit is bright.
The high-speed growth of performance continued to exceed expectations and ended successfully in 2021. The income is close to the upper limit of the notice, and there is a slight deviation between the deduction of non profits and the notice. The main reason is that the losses of the joint-stock company should be placed in the non recurring profit and loss before, but now they are placed in the recurring profit and loss without adding back. The two new business segments of the company’s preparation cdmo and gene cell therapy cdmo are still in the loss stage as a whole, and the net profit attributable to shareholders of Listed Companies in the consolidated statements of the company is reduced by about 106 million yuan (the net profit of the two business impact statements in 2020 is 42.47 million yuan). At the same time, the industry related joint-stock companies with the company’s strategic layout are still in the loss stage, reducing the net profit of the consolidated statements by 31 million yuan in total. Excluding the influence of participating companies in the loss period of new business, the company realized a net profit attributable to shareholders of listed companies of 661 million yuan, an increase of 80.11% year-on-year; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 639 million yuan, a year-on-year increase of 92.81%.
The company’s Q4 revenue base in 2020 is high, and it will exceed the expectation on the basis of the high base in 2020 in 2021. Considering the impact of exchange rate fluctuations on the statements, the income exceeded expectations. The company has achieved rapid growth for 12 consecutive quarters, the revenue of a single quarter has reached a new high, the profit margin of the company continues to improve, and new businesses continue to be invested. The company’s revenue in the first three quarters was 540 million, 710 million and 770 million respectively. The Q4 revenue exceeded 1 billion yuan, reaching a new high and very bright. The growth rate of Q4 deduction non-profit was more than 115%, and the growth also exceeded expectations. After adding back the losses of subsidiaries, the overall net profit margin of the company in 2021 was 20.5%, reflecting the further improvement of operating efficiency. Among them, we expect to confirm some small molecule and large orders. The company received major contracts in 2021 and a new batch of purchase orders in 2022. The total of the two orders is close to 900 million US dollars. Much more than the revenue for the whole year of 2021. According to Pfizer’s latest annual report, we speculate that the order is covid-19 small molecule paxlovid. Pfizer expects that the variety sales will exceed 22 billion US dollars in 2022. The company continues to consolidate the stable business partnership established with key customers through technology and service capabilities. The signing of this major contract is a proof of the company’s ability, reflecting the stickiness of service and the leading advantage of business. This order will greatly boost the performance growth in 2022 and help the company to several levels. The market generally believes that Porton Pharma Solutions Ltd(300363) is the second tier of cdmo, but we believe that after two years of continuous and in-depth cdmo strategic transformation, the company’s technical capacity, technical reserves and customer coverage have gradually moved closer to the first tier, and the gap is becoming smaller and smaller. The successive signing of major contracts fully confirms our judgment. The CDMO industry is a rare policy haven, and benefited from industrial transfer, favorable policies and innovative R & D wave. It is now a golden period of growth. The company is gradually gaining the first tier in China.
Profit forecast and investment rating. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 521 million yuan, 1178 million yuan and 1.600 billion yuan respectively, with an increase of 60.7%, 125.9% and 35.8% respectively. EPS is 0.96 yuan, 2.16 yuan and 2.94 yuan respectively, and the corresponding PE is 84x, 37x and 27x respectively. The current valuation growth rate highlights the cost performance. Based on the forward-looking layout of gene cell therapy, we think we can give the company a valuation premium. We are optimistic about the long-term development of the company and maintain the “buy” rating.
Risk warning: commercial order fluctuation risk; Risk of increased proportion of key customers and core products.
