\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Company profile: focus on small molecule cdmo services and build industry-leading advantages. The company is the world’s fifth largest cdmo company of innovative drug API, mainly providing pharmaceutical enterprises with new drug process development, process optimization and large-scale production services. In the past six years, the compound growth rate of the company’s revenue and profit was 32.39% and 37.88% respectively, and the business situation continued to improve. After years of intensive cultivation, the company has built technological leading advantages in advanced manufacturing fields such as continuous production and biosynthesis, and cultivated diversified, high-quality and high viscosity customer groups.
Industry Overview: high prosperity, large space, no overcapacity and limited external impact. (1) Prosperity: the CXO industry will maintain a high prosperity in the short term. In the long term, the prosperity of the industry may be reduced due to the improvement of the base, financing, innovation quality requirements and other factors. (2) Space and pattern: Frost & Sullivan predicts that from 2022 to 2026, the global pharmaceutical cdmo market is expected to maintain a compound growth rate of 13.74%, and the industry space will grow to $106.6 billion. At present, the global cdmo market pattern is relatively scattered, and there is much room for Chinese cdmo enterprises to increase their market share. (3) Capacity: foreign cdmo companies focus on the development of biological macromolecules. The newly-built capacity of Chinese cdmo enterprises is mainly chemical macromolecules. From the perspective of asset operation efficiency, it does not show that the industry has excess capacity. In the future, thanks to covid-19 oral drugs, overseas order transfer and the rapid growth of the Chinese market, the current rapidly increased production capacity is expected to maintain high utilization. (4) The US supply chain security act has limited impact on China’s cdmo enterprises.
Future highlights: two wheel drive, moving towards a new stage of development. Since November 2021, the company has successively signed major business contracts with a total contract amount of 9.3 billion yuan, highlighting the company’s global competitive advantage in the field of chemical small molecule cdmo. In the short term, this major contract will have a significant positive impact on the company’s performance in 2022. In the long run, the delivery of this major contract will significantly upgrade the company’s organization and management system, improve the company’s order delivery ability, and lay a solid foundation for the company to expand new markets, new customers and new businesses. In addition, the company implements the “two wheel drive” strategy, and with the help of the customer reputation, operation system and R & D background accumulated in the field of chemical small molecules, the company can quickly promote the development of emerging businesses such as chemical macromolecules, biological macromolecules and preparations, so as to open up the future growth space of the company.
Risk warning: covid-19 epidemic recurrence risk; Sino US trade friction risk; Less than expected risk of capacity expansion; Risk that the order growth is less than expected; Risk of loss of core technical personnel; Exchange rate fluctuation risk; Industry competition intensifies risks, etc.
