\u3000\u30 Zhongyan Technology Co.Ltd(003001) 71 Tofflon Science And Technology Group Co.Ltd(300171) )
Key investment points
Event: targeted raising of RMB 3.2 billion to strengthen investment in integrated solutions + CGT Consumables / equipment
On February 28, 2022, the company issued a fixed increase plan, which plans to raise 3.2 billion yuan to invest in the "biopharmaceutical equipment industry trial production center" (530 million yuan, accounting for 16.6%), the "Jiangsu biopharmaceutical equipment industrialization base" (990 million yuan, accounting for 30.9%), the "Hangzhou life science industrialization base" (1.25 billion yuan, accounting for 39.1%) and supplement working capital. By item:
① biopharmaceutical equipment industry trial production center: "the expansion of the core equipment production line of complex preparations has improved the company's production capacity of complex preparation equipment such as microspheres, liposomes and drug loaded fat emulsion", and the construction cycle is 36 months.
② Jiangsu biomedical equipment industrialization base: "it is mainly used to produce pharmaceutical equipment that meets GMP requirements, such as freeze-drying system, rear light inspection and packaging line, and expand product production capacity". The construction period is 24 months.
③ Hangzhou life science industrialization base: "it mainly provides equipment and instruments, culture medium, packaging materials and liquid separation products that meet the requirements of GMP for new biological drugs for cell and gene therapy", and the construction period is 36 months.
Viewpoint: in the window period of industrial capacity expansion + capacity improvement, the core is speed and integration
① capacity expansion, production line extension and consumables expansion to smooth the impact of downstream capital expenditure cycle on the company's performance fluctuation. We believe that the core of the business model of pharmaceutical equipment is cost addition and customized processing. The growth of the leading performance of overseas equipment comes from (1) global market expansion, (2) horizontal expansion of product line (cutting into the boom track with faster downstream capital expenditure), and (3) integrated solution of consumables. In this fixed growth plan, we are concerned about the company's increasing capacity reserves in Jiangsu plant to increase the share of foreign markets in China, expanding the complex preparation product line in Shanghai plant, arranging CGT track in Hangzhou plant and strengthening the research and development of consumables. We believe that the investment of new plant and new capacity will help to expand the growth ceiling.
② development stage positioning: covid-19 order digestion, international breakthrough and new business cultivation. The core is speed and integration. We believe that driven by the continuous listing of Chinese biopharmaceutical products and the independent control of downstream capital expenditure + supply chain, domestic equipment / consumables suppliers are in the window period of industry expansion and pattern reconstruction (for the analysis of specific market space and competition pattern, see our historical Industry Report). In all decentralized and niche links of the pharmaceutical upstream industry chain, We believe that the pharmaceutical machinery company is expected to become an integrated solution integrator. We expect the company to further strengthen the design and manufacturing capacity of high-end equipment in the window period of capacity expansion; At the same time, we also believe that the expansion of consumables / fillers and other fields depends more on the competitive elements of interdisciplinary disciplines such as materials science and bioengineering. The ability accumulated by the company's historical business layout is more reflected in the manufacturing end. M & A and integration may be a better solution for the strategic layout of consumables and fillers in the window period.
Profit forecast and valuation
We expect that the company's EPS from 2021 to 2023 will be 1.31, 1.6 and 2.02 yuan / share respectively, and the closing price on March 1, 2022 corresponds to 29 times of PE in 2022. We believe that the company is in the period of covid-19 order digestion, international breakthrough and new business cultivation. From the perspective of capacity-building, the company is a company with relatively complete upstream and downstream equipment product line layout and early start. The company's M & A integration, market promotion and product R & D Progress in the field of medical equipment and consumables may exceed expectations, Taking into account the opportunities for the vigorous development of biomedical equipment under the post epidemic situation and the company's capacity accumulation and layout in the field of traditional pharmaceutical equipment and biomedical equipment / consumables, the "overweight" rating is maintained.
Risk tips:
Order delivery periodicity & volatility risk, M & A integration progress less than expected, goodwill impairment risk, price reduction risk caused by fierce market competition, etc.
