\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 59 Pharmaron Beijing Co.Ltd(300759) )
Key investment points
Event: 1) on March 27, 2022, the company released its annual report for 2021. In 2021, the company realized an operating revenue of 7.444 billion yuan, an increase of 45.0% year-on-year; The net profit attributable to the parent company was 1.661 billion yuan, a year-on-year increase of 41.7%; Net profit deducted from non parent company was 1.341 billion yuan, with a year-on-year increase of 67.5%; After adjustment, the net profit attributable to the parent company of non IFRS was 1.462 billion yuan, a year-on-year increase of 37.4%. 2) The company issued the draft restricted stock incentive plan for 2022, which plans to grant 1548800 restricted shares to core managers, middle-level and technical backbone, grass-roots and technical personnel, accounting for 0.2% of the current total share capital of the company, and the grant price is 58.38 yuan / share.
The main business continued to shine, and the adjusted non IFRS net profit attributable to the parent company increased by about 63.2% from 2019 to 2021. The growth rate of revenue, parent company and deduction is higher than the growth rate of adjusted net profit attributable to non IFRS. We expect that it is mainly due to: 1) the change of fair value of convertible bonds has a positive increase on net profit: the non cash book fair value income of 72.85 million US dollars of convertible bonds issued by the company on June 18, 2021 due to the fluctuation of H-share price; 2) Exchange gains and losses decreased significantly: the exchange gains and losses in 2021 were about 3.16 million yuan, compared with about 131 million yuan in the same period in 2020. After stripping the impact of the epidemic in 2020, compared with the data in 2019, the net profit CAGR of revenue, parent ownership, non deduction and non IFRS parent ownership in 20192021 were about 40.8%, 74.2%, 62.9% and 63.2% respectively, all achieving strong growth.
Equity incentive is bound to the core backbone to lay a solid foundation for the medium and long-term rapid development of the company. The incentive objects granted by this incentive plan include 403 core managers, middle-level managers and technical backbones, as well as grass-roots managers and technicians. The company’s performance assessment target is that the revenue from 2022 to 2025 will take 2021 as the base, with growth rates of no less than 20%, 40%, 60% and 80% respectively, and the compound growth rate of about 14.5% from 2022 to 2025, demonstrating the company’s confidence in sustainable and steady development. The company deeply binds the interests of core employees through equity incentive, which is expected to provide a pragmatic basis for the long-term development of the company
The competitive advantages of the integrated platform are prominent, and the four sectors work together to help the long-term growth of the multi therapy and integrated platform. 1) Laboratory services: the income is 4.566 billion yuan (+ 41.1%), of which the proportion of Bioscience income has increased to 46.6% (+ 5.8pp). 120000 square meters in Ningbo phase II has been put into use, 140000 laboratories in phase I of the third park have been constructed, and it is expected to be put into use in 2024h1. 2) CMC (small molecule cdmo): the revenue is 1.746 billion yuan (+ 42.9%), 200m3 of Shaoxing phase I has been put into operation in early 2022, and the remaining 400m3 is expected to be completed and put into use in the middle of 2022. 3) Clinical research services: the revenue is 956 million yuan (+ 52.0%), which is expected to be mainly due to the substantial expansion of SMO business and personnel. In the future, with the normalization of the epidemic situation and the complementary advantages of Nanjing Sirui and liansida, it is expected to continue to maintain rapid growth. 4) Macromolecular and cellular gene therapy: revenue of 151 million yuan (+ 466.6%). ① C & gt: invest in accugengroup, acquire absorption and ABL, and build a preclinical to clinical Integrated C & gt service platform; ② From laboratory services to macromolecular discovery and research services, Ningbo self built macromolecular production base to build an end-to-end macromolecular R & D and production platform. It is expected to start undertaking macromolecular GMP production service projects in 2023h1. With the continuous improvement of the multi therapy platform, it is expected to continuously contribute new increment to the company.
Profit forecast and investment suggestions: considering the gradual release of the company’s production capacity and the implementation of back-end projects are expected to drive the rapid growth of the overall business, we expect the company’s operating revenue to be 9.816 billion yuan, 12.963 billion yuan and 17.287 billion yuan respectively from 2022 to 2024 (the predicted value before 20222023 is about 9.359 billion yuan and 12.392 billion yuan), with a year-on-year increase of 31.87%, 32.06% and 33.35%; The net profit attributable to the parent company was 2.208 billion yuan, 2.955 billion yuan and 4.002 billion yuan respectively (the predicted value before 20222023 was about 2.067 billion yuan and 2.720 billion yuan), with a year-on-year increase of 32.92%, 33.86% and 35.41%. As one of the leading cro + cdmo enterprises in China, the company has significant advantages in integrated service platform. In the future, with the continuous improvement of end-to-end and multi therapy service platform, it is expected to drive the continuous and rapid growth of performance and maintain the “buy” rating.
Risk warning events: the risk that the R & D investment of innovative drug enterprises does not meet the expectations, the risk that the new business progress is not as expected, the risk of deterioration of the competitive environment and the risk of exchange rate fluctuation.
