\u3000\u3 Guocheng Mining Co.Ltd(000688) 315 Novogene Co.Ltd(688315) )
Event: Novogene Co.Ltd(688315) released the plan for issuing A-Shares to specific objects in 2022. The total amount of funds to be raised from specific objects shall not exceed 2.29 billion yuan, which is mainly used for new construction and expansion projects of laboratories at home and abroad. The number of fixed additional shares to be issued this time shall not exceed 35, the number shall not exceed 800.04 million shares, and the lock-in period shall be 6 months. After the completion of the project, it will further enhance the testing ability of the company, help to quickly respond to customer needs, improve sample processing efficiency, shorten the delivery cycle of products and services, and consolidate the leading competitive advantage.
Point of view: constant increase will help the new construction and expansion of laboratories at home and abroad, and the domestic leader of scientific research grade gene sequencing service will accelerate the deepening of international layout. We believe that based on the industry know how precipitation + scale effect + automation empowerment + strong customer stickiness in the past 11 years, Novogene Co.Ltd(688315) will continue to consolidate its leading edge in the field of scientific research level gene sequencing services and gradually realize in China for global.
It is planned to raise 2.29 billion yuan and 1.739 billion yuan to invest in the construction and expansion of laboratories at home and abroad, of which: 1) the construction project of gene sequencing service center is planned to invest 618 million yuan, accounting for 26.95%; 2) A total investment of 506 million yuan is proposed for the new laboratory project in China (Shanghai / Guangzhou), accounting for 22.06%; 3) A total of 543 million yuan is proposed to be invested in overseas (UK / US) laboratory construction projects and Singapore expansion projects, accounting for 23.69%. In addition, 553 million yuan will be used to supplement working capital. The new construction and expansion project of the laboratory mainly invests in the new construction or expansion of the gene sequencing laboratory, the purchase of gene sequencing instruments and supporting equipment, the recruitment of professional and technical personnel, etc. it is planned to solve the production capacity bottleneck and improve the service capacity.
The company has accumulated leading advantages in scale, intelligence, scientific research customers, internationalization and so on.
1) scale: the scale effect of gene sequencing service is prominent. The company’s business covers about 70 countries and regions on six continents and serves more than 5600 customers. With the expansion of business scale, the profit margin is expected to continue to improve. 2) Intellectualization: Falcon flexible delivery system has completed the intelligent sequencing of more than one million samples for two years, reducing manual investment by 70% and reducing the average product delivery cycle by 60%; 3) Strong customer stickiness: scientific research customers pay more attention to service quality, stability and timeliness of delivery, with high viscosity; 4) Internationalization: it has subsidiaries in Singapore, the United States, the United Kingdom, the Netherlands, Japan and other countries and regions. 99% of the top 100 global academic research institutions are Novogene Co.Ltd(688315) ‘s customers, and internationalization continues to increase.
Profit forecast and investment suggestions: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 225 million yuan, 266 million yuan and 388 million yuan, with a year-on-year increase of 515%, 18% and 46% respectively, and the corresponding PE will be 51x, 43x and 29x respectively. Excluding the impact of amortization of equity incentive expenses, it is estimated that the net profits from 2021 to 2023 will be 225 million yuan, 301 million yuan and 404 million yuan respectively, with a year-on-year increase of 515%, 34% and 34% respectively. Maintain the “buy” rating.
Risk warning: the risk that the fixed increase scheme fails to pass; Income dilution risk; The epidemic affects business development, etc.
