\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Key investment points
Event: on March 23, 2022, the company released the annual report of 2021. In 2021, the company achieved an operating revenue of 22.902 billion yuan, a year-on-year increase of 38.5%; The net profit attributable to the parent company was 5.097 billion yuan, a year-on-year increase of 72.19%; The net profit deducted from non parent company was 4.064 billion yuan, with a year-on-year increase of 70.38%; After adjustment, the net profit attributable to the parent company of non IFRS was RMB 5.131 billion, with a year-on-year increase of 41.08%.
The main business continues to be strong, the management ability continues to be optimized, and the orders continue to grow at an accelerated rate. On a quarterly basis, 2021q4 achieved a revenue of 6.381 billion yuan (year-on-year, the same below, + 35.17%) on the basis of the high base in the same period, deducting a net profit of 957 million yuan (+ 30.94%), all of which were in a rapid growth trend; In terms of profitability, in 2021, the gross profit margin was 36.28% (- 1.7pp), the non IFRS gross profit margin was 38.00% (- 2.3pp), the net profit margin was 22.43% (+ 4.37pp), and the non IFRS net profit margin was 22.40% (+ 0.84pp); In terms of orders, the demand of the main business is still strong in 2021, with 29.099 billion yuan of outstanding orders (+ 83.53%), and 22.986 billion yuan (+ 99.13%) of revenue orders are expected to be recognized within 22 years.
Wuxi chemistry: “end-to-end, integrated” crdmo business model continues to be realized. It is expected that the revenue growth in 2022 is expected to nearly double that in 2021. In 2021, the revenue was 14.09 billion yuan (+ 46.9%). ① Small molecule drug discovery service (R): revenue of 6.17 billion yuan (+ 43.2%), laying the foundation for sustained high growth in the back end. ② Cdmo (process R & D and production): “follow and win molecules” is progressing smoothly, with a revenue of 7.92 billion yuan (+ 49.9%). By the end of 2021, there were 1666 R & D pipeline projects (+ 26.8%), including 42 commercialization (+ 50%).
Wuxitesting: it is expected that the revenue growth in 2022 will continue the momentum in recent years. In 2021, the revenue was 4.53 billion yuan (+ 38.0%), of which ① laboratory analysis and testing services: the revenue was 3.05 billion yuan (+ 38.9%). If the drug analysis and testing services other than device testing were excluded, it would increase strongly by 52%; ② Clinical cro and SMO: the revenue is 1.48 billion yuan (+ 36.2%), the scale continues to expand, and SMO has significant advantages in China.
Biology business: it is expected that the growth trend in recent years will continue in 2022. In 2021, the revenue was 1.99 billion yuan (+ 30.0%), of which ① DNA coding compound library: revenue + 42%; ② The revenue of new molecular types increased by + 75%, accounting for 14.6% of the biology sector (+ 4.2pp).
Cell and gene therapy ctdmo (wuxiatu): China is growing rapidly. After the recovery of overseas epidemic, it is expected to return to the rapid growth track. It is expected that the revenue growth in 2022 is expected to exceed the growth rate of the industry. In 2021, the revenue was 1.03 billion yuan (- 2.8%), of which China + 87%. There were about 72 service projects in the whole year, of which 4 project offices were about to submit the listing application stage.
China new drug R & D Service Department (wuxiddsu): it is expected that the business will be in the iterative upgrading stage in 2022, and the revenue will decrease slightly. In 2021, the revenue was 1.25 billion yuan (+ 17.5%), which helped customers complete the ind declaration of 26 innovative drug projects and obtained the clinical trial licenses of 23 projects.
Profit forecast and investment suggestions: considering that the company has full orders in 2022 and the commercialization projects are expected to continue to be implemented, we predict that the company’s revenue from 2022 to 2024 will be 36.817 billion yuan, 44.073 billion yuan and 54.283 billion yuan (about 36.817 billion yuan and 42.650 billion yuan before the forecast from 2022 to 2023), with a year-on-year increase of 60.75%, 19.71% and 23.17%, and the net profit attributable to the parent company will be 8.485, 9.891 billion yuan and 12.892 billion yuan (about 7.673 billion yuan and 9.617 billion yuan before the forecast from 2022 to 2023), with a year-on-year increase of 66.46% and 16.57% 30.34%。 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 data used in the research report may have the risk of information lag or untimely update, less than expected investment in new drug research and development, loss of core technicians, and exchange rate fluctuation.
