\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Events
On March 23, Wuxi Apptec Co.Ltd(603259) released the annual report of 2021. In 2021, the company achieved revenue of 22.9 billion yuan, a year-on-year increase of 38.5%; The net profit attributable to the parent company after deducting non profits was 4.06 billion yuan, an increase of 70.4% year-on-year; After adjustment, the net profit of non IFRS was 5.13 billion yuan, a year-on-year increase of 41.1%, and the revenue and profit side maintained strong growth.
Brief comment
Wuxi chemistry achieved more than expected growth. In 2021, the revenue was 14.09 billion yuan, a year-on-year increase of 46.9%, and the adjusted non IFRS gross profit was 5.75 billion yuan, a year-on-year increase of 40.8%. In addition, the company expects the growth rate in 22 years to double that in 21 years. 1) The revenue of small molecule drug discovery business (R) was 6.17 billion yuan, a year-on-year increase of 43.2%, and 310000 compounds were synthesized; 2) The back-end process R & D and production business (D & M) achieved a revenue of 7.92 billion yuan, with a year-on-year increase of 49.9%. 14 commercial projects were added to the cdmo molecular pipeline, with a total of 1666 molecules in the pipeline. 3) At the same time, the company has increased production capacity expansion, and new production capacity has been put into operation in Changzhou phase II, Taixing and Wuxi.
Wuxi testing grew strongly, and Wuxi ATU entered the turning year of 2022. Wuxi testing achieved a revenue of 4.53 billion yuan, a year-on-year increase of 38.0%, with strong growth; Wuxi ATU achieved a revenue of 1.03 billion yuan in 2021, a year-on-year decrease of 2.8%. Among them, the revenue of Chinese business increased by 87% year-on-year, which partially alleviated the impact of the decline of American business. It is expected to enter the accelerated rise cycle in 2022.
Wuxi biology and Wuxi ddsu grew steadily. In 2021, the revenue was 1.99 billion yuan and 1.25 billion yuan respectively, with a year-on-year increase of 30.0% and 17.5%. Wuxi biology will continue to maintain a strong growth trend in the future. Wuxi ddsu business will be upgraded iteratively in 2022, and the revenue is expected to decline slightly.
High prosperity of the industry + abundant orders on hand, full of driving force for future development Wuxi Apptec Co.Ltd(603259) as a platform leading enterprise in the CXO sector with international competitiveness, it has a unique integrated crdmo business model, full of new and on-hand orders, strong growth certainty, and is optimistic about the future development potential of the company.
Profit forecast and investment suggestions
We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 8.019/93.41/11.811 billion, corresponding to 35 / 30 / 23 times of PE respectively, maintaining the “buy” rating.
Risk tips
Covid-19 epidemic aggravation risk, order execution less than expected risk, overseas supervision risk, ban lifting risk, core technical personnel loss risk, IP protection risk, investment risk, exchange rate fluctuation risk, raw material price rise risk, safety production and environmental protection risk.
