\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Event: on March 13, 2022, the company released its main operating data. From January to February, 2022, the company’s revenue increased by more than 130% year-on-year, and the revenue growth and orders on hand reached a record high. In addition, the company expects the revenue to increase by more than 150% in 2022q1, with an amount of more than 2 billion yuan.
The operating data in January and February are strong, and the continuous high growth of the whole year is expected. The company’s revenue is expected to reach a record high of + 2.0 billion yuan in the first quarter of 2022q1, with a year-on-year increase of revenue of + 2.0 billion yuan. We expect that the main reasons for the acceleration of revenue are: ① from November 17, 2021 to February 20, 2022, three large orders with an accumulated amount of 9.293 billion yuan continue to be fulfilled; ② While continuing to undertake large orders, the business of other sectors showed a momentum of accelerated growth.
Capacity expansion is accelerated, and small molecule cdmo is expected to speed up. With its leading continuous flow chemistry, enzyme catalysis and other technical advantages, the company has undertaken a large number of preclinical to commercial small molecule cdmo projects. Among them, 17 of the later clinical and commercial projects are expected to be heavy varieties exceeding US $1 billion. The renewal of large orders highlights the strong business demand. In order to meet the supply demand, the company accelerates the expansion of production capacity. In 2021h1, the company’s production capacity is about 2979.8m3 (+ 24.2%), and it is expected to release new production capacity in Tianjin, Dunhua and Zhenjiang in the second half of the year and next year. The production capacity is expected to reach 4369.8m3 (+ 56.1%) and 5869.8m3 (+ 34.3%) by the end of 2021 and 2021h2 respectively. It is expected to add about 1390m3 in 2021h2. The release rhythm is accelerated, which is expected to drive the accelerated growth of small molecule cdmo.
The continuous layout of multi fields and the whole industrial chain is expected to bring new growth momentum. Relying on the customer base, technical details and operation platform management system accumulated by small molecule business for many years, the company has built its own cdmo platform for chemical synthetic macromolecules, bioengineering, preparations and biological macromolecules, acquired Guanqin medicine and yipukono, integrated preclinical and clinical cro business, and provided customers with whole process integrated outsourcing services. With the continuous development of new business areas, it is expected to contribute new increments to the company.
Profit forecast and investment suggestions: we expect that the company’s revenue from 2021 to 2023 will be RMB 4.583 billion, RMB 8.781 billion and RMB 10.601 billion, with a year-on-year increase of 45.52%, 91.59% and 20.72%, and the net profit attributable to the parent company will be RMB 1.058 billion, RMB 2.053 billion and RMB 2.463 billion, with a year-on-year increase of 46.53%, 93.99% and 20.00%. Considering that the company is in a high boom and high-quality track of innovative drug R & D and production outsourcing, and has become China’s cdmo leader with comprehensive advantages such as technology, leading the rapid growth of the industry, it is expected to enjoy the valuation premium 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, and the loss of core technicians; Risks of raw material supply and price rise, environmental protection and safety production risks; Exchange rate fluctuation risk.
