\u3000\u3 Guocheng Mining Co.Ltd(000688) 298 Zhejiang Orient Gene Biotech Co.Ltd(688298) )
With covid-19 test, the company has gained considerable performance increment. According to the company's performance express, the net profit attributable to the parent company in 2021 is expected to be 4.777 billion yuan, a year-on-year increase of 184.8%, and the contribution of covid-19 test is significant. At the beginning of 2022, Omicron became popular all over the world, and the demand for covid-19 testing in overseas markets such as the United States surged in a short time. The company is one of the three manufacturers approved the covid-19 testing and self inspection product EUA in the United States. Therefore, it is expected that the company will also be able to reap performance growth in covid-19 testing business in 2022.
The company has grasped the market opportunity of every round of covid-19 testing, and covid-19 testing business has changed from short cycle to medium and long cycle. Since the covid-19 epidemic, although the demand for covid-19 detection has always existed, during this period, there have been several rounds of significant increase in the prosperity of covid-19 detection under the catalysis of price and volume increase, which are respectively: the first half of 2020 (the global epidemic began to spread), the beginning of 2021 (large-scale self inspection products in Europe) At the end of 2021 and the beginning of 2022 (large amount of self inspection products in the United States). Although many IVD enterprises have entered the covid-19 testing track sooner or later, most of them only seize the market of one-time short cycle, and the particularity of Zhejiang Orient Gene Biotech Co.Ltd(688298) is that it is one of the few companies in the industry that seize multiple rounds of high boom market opportunities, whether it is the early response to covid-19 testing in 2020 The success of cooperating with Siemens in selling covid-19 self inspection products in the European market since 2021, or becoming one of the first three Chinese manufacturers approved the United States covid-19 self inspection product EUA at the end of 2021, all confirm this: the company's covid-19 testing business has changed from short cycle to medium and long cycle, and is expected to go through a complete epidemic cycle under the guidance of clear strategic objectives, Accumulate more and longer-term capital, technology, channel and brand influence for the company.
Seizing the historical opportunity of covid-19 testing has a considerable and far-reaching impact on the company, which is expected to help the company become a new generation of IVD leader:
(1) sufficient cash flow is expected to accelerate the company's strategic layout: as of 2021q3, the company's cash on account has reached 5.29 billion yuan, accelerating the company's internal R & D, external investment and capacity expansion. 1) Internal R & D: in the first three quarters of 2021, the company's R & D expenditure was 243 million yuan, a year-on-year increase of 487%, 2.59 times that of 2020. The number of R & D personnel increased from 131 in 2019 to 207 in the first half of 2021; 2) External investment: the company has made a series of foreign investment, especially accelerating the layout of the company in the Chinese market and the third-party testing business. 3) Capacity expansion: the investment progress of the company's "POCT products with an annual output of 240 million people" project will be rapidly increased to about 70% in 2021, which will help the company break through the capacity bottleneck, improve the company's capacity at the same time, and improve the level of production technology and automation.
(2) overseas high-quality customer resources and sales channels have been significantly enriched and improved, and the company's international status has been greatly improved: in addition to its own brand, the sales mode of covid-19 testing products also includes cooperation with Siemens and sales through Siemens channels. In this process, the company's international popularity and influence have been significantly improved, At the same time, it has accumulated a wealth of high-quality customers all over the world. In the future, when the epidemic situation is gradually stabilized, it is expected that the company can still use customer resources to import new products, so as to realize large-scale sales.
Investment suggestion: buy - a investment rating. We expect that the revenue growth rate of the company from 2021 to 2023 will be 207.2%, 21.0% and - 12.3% respectively, and the net profit growth rate will be 184.8%, 22.2% and - 19.3% respectively, with outstanding growth; Given the investment rating of Buy-A, the six-month target price is 389.26 yuan, equivalent to 8 times the dynamic P / E ratio in 2022.
Risk warning: uncertainty of epidemic situation; Exchange rate fluctuation risk; The risk that the R & D or promotion of new products is not as expected.
