\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 047 Sino Biological Inc(301047) )
Event: the company released the annual report. In 2021, the company realized revenue of 965 million yuan (yoy-39.53%), net profit attributable to parent company of 720 million yuan (yoy-36.15%), and net profit deducted from non attributable to parent company of 596 million yuan (yoy-46.81%).
Comments:
The performance is in line with expectations, and the non covid-19 business is growing rapidly. The company’s sales revenue of covid-19 virus related products in 2021 was 606 million yuan, a year-on-year decrease of 54.86%. Due to the large year-on-year decrease of the high base in 2020, the growth rate of apparent performance was dragged down. Excluding covid-19 business, the company achieved business income of 359 million yuan, with a year-on-year increase of 41.41%, maintaining the momentum of continuous growth. In terms of business and category, cro service and culture medium business achieved strong growth: the company achieved revenue of 310 million yuan (yoy-34.94%), antibody reagent 529 million yuan (yoy-48.99%), cro service 88 million yuan (YoY + 73.69%), culture medium 27 million yuan (YoY + 56.03%) and gene 12 million yuan (yoy-20.59%).
Profitability gradually returned to normal, and government subsidies and investment income brought additional profits. In 2021, the gross profit margin of the company’s sales was 93.97%, which was mainly affected by the proportion of covid-19 product revenue, with a year-on-year decrease of 2.91pct. The ratio of sales / management / R & D / financial expenses in 2021 was 8.44% / 6.22% / 4.16% / – 0.39% respectively, with a year-on-year increase of + 2.61pct / + 3.33pct / + 2.53pct / – 2.64pct. The increase in the rate of sales, management and R & D expenses is mainly due to the business development needs of the company and the high income of covid-19 in 2021, resulting in a small relevant base. The decrease in financial expenses is mainly due to the financial benefits brought by listing and fund-raising. During the reporting period, the company received 67 million yuan of government subsidies and 40 million yuan of investment income from bank financial products, which thickened the company’s profits.
Overweight R & D and internationalization, and the future growth can be expected. In 2021, the company invested 40 million yuan in R & D, with a year-on-year increase of 53.99%; The number of R & D personnel was 122, a year-on-year increase of 25%. The company orderly promoted a number of R & D projects such as recombinant protein, immunodiagnostic raw materials, molecular biology tool enzymes, membrane proteins, nano antibodies and colloidal gold, and actively expanded the product line and product quantity to provide sufficient impetus for the growth of the company’s performance. In 2021, the company had 114 sales personnel, with a year-on-year increase of 48%, and the sales team expanded rapidly. In terms of internationalization, we set up a subsidiary in Japan to be responsible for the sales of biological reagents in Japan and South Korea. On the basis of the previous European and American markets, we further improve the company’s global marketing network layout, enhance the company’s market development and service ability, and lay a solid foundation for the company’s overseas performance growth.
Profit forecast: from 2022 to 2024, we expect the company’s revenue to be 843.7/884.6/1059.0 million yuan respectively, with a year-on-year increase of – 12.6% / + 4.8% / + 19.7% respectively; The net profit attributable to the parent company was 517.3/526.9/622.7 million yuan respectively, with a year-on-year increase of – 28.1% / 1.9% / 18.2% respectively. The latest closing price corresponding to PE is 46 / 45 / 38 times respectively. The company is a leading enterprise in domestic biological research reagents. It has a leading production process and technology platform for monoclonal antibody and recombinant protein drugs. While constantly improving the product system, it continues to expand the field of technical service business. Under the background of strong demand for global drug R & D, the company’s performance at home and abroad is expected to achieve sustained and rapid growth, For the first time, give a “overweight” rating.
Risk warning: loss of customers; Sales are less than expected; New product development is not as expected; Overseas business expansion was less than expected.
