Truking Technology Limited(300358) (300358)
Truking Technology Limited(300358) : epidemic dividend window period, accelerate the whole process layout and open high-end import substitution
Based on the advantages of aseptic sub packaging and post packaging equipment, expand the overall solution of biological drugs. Truking Technology Limited(300358) is a comprehensive pharmaceutical equipment head company in China. Aseptic sub packaging (including biological drugs, chemical drugs, etc., accounting for about 32% of revenue in 2020, the same below), testing packaging (accounting for about 18% of revenue) and pharmaceutical water (accounting for 12.5% of revenue) equipment are the company's traditional advantageous businesses. Solid preparation equipment (accounting for 12.8% of revenue) was supplemented after the overall acquisition of romaco in 2020, Under the covid-19 epidemic situation, the company has greatly promoted the product promotion of the company's upstream and downstream equipment of biological drugs (including reactor, liquid preparation system, purification equipment, etc., accounting for 2.4% of the revenue), and has become one of the domestic pharmaceutical machine companies with the most complete layout of front-end reaction fermentation, liquid preparation / storage system, middle-end aseptic sub packaging system, back-end intelligent rear package inspection and storage. We believe that the biggest change in the company's revenue structure from 2022 to 2024 may be ① the decline in the proportion of covid-19 related construction revenue, but opening the window for the promotion and sales of the company's reaction fermentation, liquid preparation and purification systems; ② "Bioengineering solutions" accelerated the layout and increased the proportion of revenue, especially the proportion of consumables. ③ The covid-19 vaccine production test opened the window of China's high-end import substitution and entered the import substitution track in high-end markets such as biological drugs.
Biopharmaceutical equipment: upstream and downstream layout, equipment consumables promotion
① Impact of covid-19 vaccine construction orders: in terms of the total impact, the company's covid-19 vaccine orders accounted for about 25% of the revenue from January to September 2021. In terms of the proportion of covid-19 related orders in the orders on hand, according to the company's announcement, "at the end of June this year, it accounted for about 20%; at the end of September, the orders on hand were about 6.2 billion, of which covid-19 orders accounted for about 10%, which has decreased significantly in the third quarter", "Among the revenue recognized in the first half of the year, covid-19 vaccine orders accounted for about 30%. We estimate that the proportion of covid-19 vaccine construction orders in the total revenue continues to decline in the second half of 2021, which is expected to account for 20-30% in the whole year, and the corresponding revenue is about 1-1.5 billion yuan (see the following chapters for the prediction and analysis of revenue in 2021); Among the orders in hand at the end of September 2021, the order related to covid-19 vaccine is about 600-700 million yuan. We expect that the revenue recognition related to covid-19 vaccine equipment may decrease year-on-year in 2022, and the proportion of covid-19 revenue in total revenue may decrease to about 4-6% in 2023.
② Downstream system layout: equipment sales growth and self-developed packing acceleration. In the field of downstream separation and purification of biological drugs, the company focuses on truking Yuanchuang and truking microspheres (established in 2021), of which truking Yuanchuang is mainly engaged in purification equipment + agent fillers, and truking microspheres are mainly engaged in self-developed fillers. According to the announcement of the company, Chu Tianyuan created "about 100 million orders in 2020 and 200 million goals in 2021"; Truking microsphere "products cover natural polysaccharide microsphere, silica gel microsphere, polymer microsphere and inorganic microsphere. At present, the products are mainly agarose microsphere, which is mainly used in biological macromolecular pharmacy. It is planned to realize small batch product sales in the first half of next year, build a production capacity of 500000 liters in 3-5 years, and plan to sell more than 1 billion in the future". We believe that the company's future volume in the downstream equipment / filler field will come from the commercialization of biological drugs + domestic substitution. As a latecomer, we look forward to the company's new breakthroughs in product echelon, market promotion and other fields.
③ Upstream system layout: expect consumables to be delivered on the market. In the field of upstream cell culture of biological drugs, the company has basically completed the layout. Stainless steel bioreactors and other supporting systems, disposable reactors and consumables have been launched. Truking siute, a newly established subsidiary in 2021, will continue to promote this business. According to the analysis of relevant business development progress, we expect to successively deliver commercial products such as disposable bioreactors and liquid storage bags / liquid distribution bags from the second quarter of 2022.
Non biological pharmaceutical equipment: new increment of internationalization and intelligence
① Romaco international collaboration: product collaboration + regional collaboration, net profit margin improved. Impact of romaco integration: in October 2020, the listed company completed the overall acquisition of romaco and quickly promoted the international layout of the company's solid preparation equipment. We believe that the acquisition synergy comes from: (1) product synergy: process design + document system capabilities complement each other and continue to launch upgraded products. (2) Regional coordination: romaco has strengthened China's market expansion and Truking Technology Limited(300358) strengthened its international layout, bringing room for a decline in the rate of sales and management expenses. Romaco's revenue is planned to maintain CAGR at 10-15% in 5 years. Considering synergy and efficiency improvement, we expect faster profit growth.
② Intelligent manufacturing collaboration: gradually improve the whole process solution. We believe that compared with other Chinese pharmaceutical machinery companies, the company has more complete layout and richer cases in sub packaging / filling, post packaging, intelligent detection and storage systems. The company's overall solution relies on the Truking Technology Limited(300358) platform, supplemented by truking Siasun Robot&Automation Co.Ltd(300024) (established in February 2016), truking Huaxing (established in January 2020, responsible for precision equipment manufacturing) Bilian truking ( Truking Technology Limited(300358) holds 20% shares, established in December 2021, is responsible for the field of precision manufacturing) coordination, and pays attention to the application of the company's automation and intelligent solutions in sterile preparations, BFS, bioengineering and other fields, as well as the promotion of new products.
Profit forecast and valuation
We expect that the company's EPS from 2021 to 2023 will be 0.96, 1.15 and 1.42 yuan / share respectively. The closing price on January 5, 2022 corresponds to 25 times PE in 2021 and 21 times PE in 2022, which is lower than the average of comparable companies.
We believe that based on the technical advantages of filling and post packaging equipment, the company actively expands front-end reactor equipment and liquid preparation chromatography equipment, and fully grasps the incremental opportunities in the window period of capacity construction of Chinese and foreign vaccine companies under the covid-19 epidemic. We believe that this is conducive to the horizontal (category expansion) and vertical (consumables, fillers, etc.) expansion of biopharmaceutical equipment. In addition, the company strengthened its international layout through the acquisition of romaco and established companies such as truking Siasun Robot&Automation Co.Ltd(300024) and truking Huaxing to strengthen intelligent manufacturing collaboration. We are optimistic about the company's upgraded products and the development space of markets outside China. Disposable consumables / fillers are expected to gradually contribute new increment, cover for the first time and give a "overweight" rating.
catalyzer
The promotion pace of new products such as consumables / fillers was faster than expected, and the expansion speed of new products of biological drug equipment was faster than expected.
Risk statement
Order delivery periodicity & volatility risk, M & A integration progress less than expected, goodwill impairment risk, price reduction risk caused by fierce market competition.
