\u3000\u3 Guocheng Mining Co.Ltd(000688) 356 Jenkem Technology Co.Ltd(688356) )
Key investment points
Performance: the net profit attributable to the parent company increased rapidly and the net profit margin increased
The company released the performance express of 2021, and the revenue in 2021 was 351 million yuan, with a year-on-year increase of 88.2%; The net profit attributable to the parent company was 177 million yuan, a year-on-year increase of 106.5%; The net profit margin attributable to the parent company was 50.4% (increased by 4.5pct year-on-year); After deducting the equity incentive expenses, the net profit attributable to the parent company in 2021 increased by 133.4% year-on-year. Quarterly, the revenue of 2021q4 increased by 47% year-on-year, and the net profit attributable to the parent company increased by 17.2% year-on-year. We believe that the company's performance in 2021 is better than our own expectations.
Growth driven: high growth under the application of new technologies, which is expected to be more sustainable
Growth capacity: we believe that the rapid growth of the company's revenue and profit in 2021 mainly comes from:
① sales growth of preparations for Chinese customers: according to the sales data of wind pharmaceutical library, the sales and growth rate of the company's main cooperative preparations in China in 2021 are: thiopefil gerstin injection 840 million yuan (a year-on-year increase of 68.4%) and pegylated interferon α- 2B injection was 210 million yuan (a year-on-year increase of 97%), and polyethylene glycol losentapeptide injection was 38.56 million yuan (a year-on-year increase of 826%). According to the record of investor relations activities of the company on January 25, 2022, "roughly speaking, the product sales revenue in China increased by more than 50%. We expect that with the continuous growth of Chinese customer preparation sales, the company's sales in China are expected to maintain steady growth.
② the clinical promotion of drugs by foreign customers and the continuous growth of sales of foreign device products: according to the record of investor relations activities of the company on January 25, 2022, the composition of income growth is "double the international income and double the technical service income", "At present, the enrollment of a patient with phase III drugs has been basically completed, and we and our customers have begun to discuss production scheduling and other related issues. Ideally, this product will be on the market in 2023.". We are optimistic about the expansion of the company's peg business projects outside China under new applications such as medical beauty, mRNA and ADC; With the gradual advancement of clinical projects, under the condition of enlarged peg dosage and sticky use, it is expected that the sustainability of the company's product sales growth is expected to be enhanced.
Profitability: we are concerned about the improvement of the company's net profit margin in 2021. We think it may come from the increase in the proportion of overseas customers (the gross profit margin and net profit margin of overseas customers are relatively higher); With the promotion of clinical phase II of polyethylene glycol irinotecan (jk-1201i) in 2022, we expect the company's R & D expense rate to increase, partially offsetting the increase in net profit margin caused by higher growth rate of overseas customers in 2022.
Profit forecast and valuation
We expect the company's EPS to be 2.95, 3.99 and 5.28 yuan / share from 2021 to 2023 respectively, and the closing price on February 25, 2022 corresponds to 57 times PE in 2022. We believe that the core of PEG modification is niche customized processing track, which has the characteristics of innovative drug research and development; Based on the accumulation of PEG modification technology, the company is expected to continue to benefit from the dividend in the Chinese market + the listing of overseas varieties, and its own innovative drug R & D and PEG modification industry expansion are expected to provide additional increment and catalyst; The company is in the window period of income structure and business model adjustment, and the income elasticity is expected to exceed expectations. Taking into account the company's competitive advantage, development stage and valuation level, maintain the "overweight" rating.
Risk tips:
Excessive R & D investment in core projects or risk of clinical failure; Risk of core project termination; Order delivery volatility risk; Production safety accidents and quality risks; Exchange rate fluctuation risk.
