\u3000\u3 Guocheng Mining Co.Ltd(000688) 105 Nanjing Vazyme Biotech Co.Ltd(688105) )
Event: on February 25, 2022, the company issued the announcement of 2021 annual performance express, and the company realized an operating revenue of 1.864 billion yuan, a year-on-year increase of 19.13%; The net profit attributable to the parent company was 678 million yuan, a year-on-year decrease of 17.43%; Deduct non net profit of 644 million yuan, a year-on-year decrease of 20.90%.
Among them, in the fourth quarter of 2021, the company achieved an operating revenue of 575 million yuan, a year-on-year increase of 34.98%; The net profit attributable to the parent company was 128 million yuan, a year-on-year decrease of 41.01%; Deduct non net profit of RMB 115 million.
By the end of the reporting period, the total assets of the company were 4.597 billion yuan, an increase of 185.23% over the beginning of the period; The owner’s equity attributable to the parent was 4.127 billion yuan, an increase of 209.79% over the beginning of the period, mainly due to the availability of funds raised by the company’s initial public offering and the increase in undistributed profits.
Routine business recovered rapidly, and the revenue increased by 92% year-on-year
The company’s routine business covers scientific research reagents, sequencing reagents, diagnostic raw materials, diagnostic reagents and instruments, cro services, etc. in 2021, the sales revenue (excluding covid-19 business) was about 718 million yuan, an increase of about 92% compared with the same period in 2020. The main reason is that the company has mastered the underlying core technology, strong platform scalability, obvious first mover advantage and increased sales of products and services; At the same time, China’s biological reagent industry is booming, and the terminal demand of relevant downstream segments is growing; Thanks to China’s covid-19 epidemic prevention policy, the business of major customer groups returned to normal and recovered in time.
Due to the moderate reduction of ex factory price, covid-19 related income decreased slightly
Affected by the implementation of the centralized procurement policy of medical devices and the further intensification of industrial competition, the company moderately lowered the ex factory price of raw materials and end products related to covid-19 testing. Due to the complete categories of covid-19 products and the repeated fluctuations of global covid-19 epidemic in 2021, the sales revenue of covid-19 related businesses (including diagnostic raw materials and terminal detection reagents) of the company reached about 1.146 billion yuan, a decrease of about 3% compared with the same period in 2020.
The expenses increased rapidly during each period, resulting in a decline in profits
The company insists on taking R & D as the core. In 2021, the R & D expenses increased by 84.97% year-on-year and the R & D expense rate was 12.46%, mainly due to the expansion of the R & D team and the increase of R & D investment; The management expenses increased by 95.37% year-on-year, mainly due to the rapid expansion of the company’s scale in 2021 and the increase of managers’ salary and office expenses; Sales expenses increased by 70.61% year-on-year, mainly due to the company’s further improvement of market coverage, increase in the number of sales personnel, and increase in market expansion and publicity; The increase in the above investment made the net profit attributable to the parent company decrease by 17.43% year-on-year.
Profit forecast and investment rating: we expect the operating revenue from 2021 to 2023 to be RMB 1.864 billion / 2.128 billion / 2.404 billion respectively, with a year-on-year growth rate of 19% / 14% / 13% respectively; The net profit attributable to the parent company was 678 million yuan / 757 million yuan / 890 million yuan, an increase of – 18% / 12% / 18% respectively; EPS is 1.69/1.89/2.22 respectively, corresponding to 49 times PE in 2022 according to the closing price on February 25, 2022. Give a “buy” rating.
Risk warning: uncertainty of covid-19 epidemic, risk of inventory impairment, risk of molecular diagnostic reagent business expansion, risk of intensified market competition.
