\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Event: on March 9, 2022, the company released its main operating data. From January to February 2022, the company’s orders and sales revenue increased by more than 65% year-on-year, a record high.
The operating data in January and February showed a bright performance, and the continuous high growth in 2022q1 and the whole year is expected. In addition, the company expects that the revenue in the first quarter of 2022 will increase by 65-68% year-on-year, that is, the median operating revenue is expected to reach about 8.243 billion yuan in 2022q1 (year-on-year + 66.5%, month on month + 29.16%). Meanwhile, the company expects that the year-on-year growth of revenue in 2022 is expected to reach 65-70%, that is, the median operating revenue in 2022 is expected to be about 38.36 billion yuan (+ 67.5%), further accelerating compared with 2021. We expect that the acceleration of orders and revenue is mainly due to: ① the smooth implementation of crdmo strategy, strong order demand and continuous strong main business; ② The small molecule cdmo business model of “following and winning molecules” ushered in the harvest period, which was caused by the continuous release of new production capacity and commercial orders.
The five major sectors continue to make efforts, and long-term growth can be expected. 1) Wuxi chemistry: “end-to-end, integrated” crdmo business model continues to be realized: ① small molecule drug discovery service (R): as a front-end funnel continuous drainage project, it lays the foundation for the continuous growth of the back-end. ② Cdmo (process R & D and production): “follow and win molecules” is progressing smoothly. In 2021, there were 42 commercial projects (year-on-year + 50.0%), and the superimposed new production capacity is constantly released, which is expected to usher in a new round of high-speed growth period; 2) Wuxi testing: ① laboratory analysis and testing services: comprehensive testing of drugs and equipment, and continuous high increase in availability after the subsequent production capacity is gradually put into operation; ② Clinical cro and SMO: SMO has significant scale advantages, and mutual drainage with CDs is expected to bring new increment. 3) Biological business (Wuxi Biology): model reserves are abundant. With the continuous expansion of laboratory capacity, we expect the revenue scale to continue the rapid growth momentum in recent years. 4) Cell and gene therapy ctdmo (Wuxi ATU): the first mover advantage enjoys the industry dividend. China is growing rapidly and is expected to return to the rapid growth track after the recovery of overseas epidemic. 5) China new drug research and Development Service Department (Wuxi ddsu): the first sales sharing project applies for NDA, which is expected to gradually enjoy the benefits of new drug success.
Profit forecast and investment suggestions: we estimate that the company’s revenue from 2021 to 2023 will be 22.869 billion yuan, 36.817 billion yuan and 42.650 billion yuan, with a year-on-year increase of 38.30%, 60.99% and 15.85%, and the net profit attributable to the parent company will be 5.097 billion yuan, 7.673 billion yuan and 9.617 billion yuan, with a year-on-year increase of 72.19%, 50.53% and 25.34%. The company’s track is in a high boom, and the “integration, end-to-end” strategy is expected to consolidate competition barriers, drive the company’s long-term rapid growth and maintain the “buy” rating.
Risk warning events: the public materials used in the research report may have the risk of information lag or untimely update; Risk of loss of core technical personnel; Risk of industry R & D investment falling short of expectations; The risk that overseas business integration does not meet expectations; The risk of intensified industry competition; Exchange rate fluctuation risk.
