\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Event overview
The company released its annual report for 2021: in 2021, the company realized a 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%.
Relying on crdmo / ctdmo business model, revenue accelerated growth
In terms of business segments, the five business segments go hand in hand.
1) Wuxi chemistry: strong growth of nearly 47% in 2021, and the growth rate in 2022 is expected to double that in 2021
In 2021, the revenue reached 14.087 billion yuan, with a year-on-year increase of about 46.93%. Among them, the revenue from small molecule drug discovery services was 6.17 billion yuan, a year-on-year increase of 43.24%, and the revenue from process R & D and production (cdmo) services was 7.92 billion yuan, a year-on-year increase of 49.94%. Looking forward to 2022, the demand for API production services in this sector is strong, and the company expects to double the growth rate in 2021.
2) wuxitesting: strong growth of 38% in 2021, and the growth trend in recent years is expected to continue in 2022
In 2021, the revenue reached 4.551 billion yuan, with a year-on-year increase of about 38.03%. Among them, the income from laboratory analysis and testing services was 3.05 billion yuan, with a year-on-year increase of about 38.93%. Affected by the epidemic in the United States, the medical device testing sector in the United States decreased slightly last year, the remaining drug analysis and testing services excluding medical device testing increased by 52%, and the income from clinical cro and SMO was 1.48 billion yuan, with a year-on-year increase of about 36.20%. Looking forward to 2022, the growth trend will continue, laboratory testing services will continue to grow at a high rate, and the diversion of preclinical business to clinical cro will be strengthened.
3) biology business: it will increase by 30% in 2021 and will continue the growth trend of recent years in 2022
In 2021, the revenue was 1.985 billion yuan, with a year-on-year increase of about 30.05%. The revenue related to new capabilities and technologies continued to grow.
4) cell and gene therapy ctdmo business (Wuxi ATU): 2022 will be a turning year, with the target growth rate faster than the industry
In 2021, the revenue reached 1.026 billion yuan, a year-on-year decrease of about 2.79%. Among them, ctdmo of cell and gene therapy in China grew rapidly, with a year-on-year increase of about 87%, which partially alleviated the impact of the decline caused by the delay in the submission of listing applications by some customers in the United States Shanghai Lingang Holdings Co.Ltd(600848) newly built 15300 square meters of process R & D and commercial production and 13000 square meters of expanded base in Philadelphia were put into use in the second half of 2021, with rapid expansion of production capacity.
5) China new drug R & D Service Department (wuxiddsu): the business will be upgraded iteratively in 2022, and the revenue is expected to decline slightly
In 2021, the revenue reached 1.251 billion yuan, with a year-on-year increase of about 17.47%. In 2022, China’s new drug Division will carry out iterative upgrading to meet customers’ requirements for China’s new drug R & D services, develop better products for customers, enhance customers’ motivation to promote clinical trials and accelerate drug approval.
Net profit achieved super excellent performance, accelerated capital expenditure and guided the rapid development of the company
In 2021, the net profit margin of the company reached 22% (+ 4pct) and the net profit margin after deduction was 18% (+ 4pct), which was mainly due to the continuous improvement of capacity utilization and the further manifestation of scale effect through the continuous optimization of operation efficiency. In 2022, the company will continue to increase capital expenditure, with an estimated capital expenditure of 9-10 billion yuan. At the same time, it will promote the construction of China’s R & D and production facilities and international layout.
Investment suggestion: the company continues to optimize and explore the business synergy between cross platforms, accelerate the pace of globalization, continue to strengthen the company’s unique integrated crdmo + ctdmo business model, and continuously expand services from “following the development of projects” to “following the development of drug molecules”. The short-term chemical + detection + biology maintains a high growth trend, and the medium and long-term cell gene therapy and ddsu business may usher in a cashing period. It is expected that the net profit attributable to the parent from 2022 to 2024 will be 8.68 billion yuan, 10.51 billion yuan and 13.33 billion yuan respectively, with a year-on-year increase of 70%, 21% and 27%, maintaining the “recommended” rating.
Risk warning: the risk of performance falling short of expectations, new business investment risk and fixed asset investment risk.
