\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 59 Pharmaron Beijing Co.Ltd(300759) )
Performance: after deducting the impact of exchange rate, the revenue growth of main business is stronger
2021 annual report; The company realized a revenue of 7.444 billion yuan (yoy45%, if calculated according to the exchange rate of the same period in 2020, the operating revenue yoy is 52.25%), the net profit attributable to the parent company is 1.661 billion yuan (yoy41.68%), and the non net profit deducted is 1.341 billion yuan (yoy67.46%)
Gross profit margin: in 2021, the gross profit margin reached 36.02%, with a year-on-year decrease of 1.38pct (if calculated according to the exchange rate of the same period in 2020, the gross profit margin was 38.76%, with a year-on-year increase of 1.36pct, which we expect may be caused by the embodiment of large-scale effect).
Analysis of growth quality: the net cash flow from operating activities was 2.058 billion (YoY 24.84%), and we found that the inventory increased by 398 million in 2021 (the added value increased by 218% year-on-year at the beginning of the year). The index is mainly caused by the addition of consumable biological assets year-on-year in 2021, which shows that the company's animal experiment related services are expected to grow rapidly. Under this influence, the excellent performance of the company's operating cash flow is mainly due to the significant increase in the turnover rate of accounts receivable Due to the year-on-year improvement of fair value fluctuation, it shows high growth quality.
Business: go hand in hand and look forward to continuing the high growth trend in 2022
Laboratory services: the proportion of Biosciences continues to increase. The revenue is 4.566 billion yuan (yoy41.1%). According to the annual report, the bioscience revenue accounted for 46.62% in 2021. It is concluded that the business revenue is 2.129 billion yuan, the revenue proportion increased by 5.77 PCT year-on-year, and the laboratory chemistry revenue is 2.437 billion yuan. The gross profit margin of laboratory services was 43.47%, with a year-on-year increase of 0.70pct. It still increased when the impact of exchange was obvious. We expect it may be related to the increase in the proportion of bioscience in the high gross profit sector. The number of personnel reached 7136 (yoy28.41%), providing support for the high growth of laboratory service revenue in 2022. After the acquisition of Zhaoqing chuangyao and kangruitai (Zhanjiang), the supply of experimental animals was effectively guaranteed. By the end of 2021, the company had nearly 10000 NHP stocks, providing strong experimental animal support for the high growth of Bioscience business.
CMC / cdmo: global layout, optimistic about the accelerated release of production capacity in 2022, driving high growth. In 2021, the revenue was 1.746 billion (yoy42.9%), and the gross profit margin was 34.92%, an increase of 2.20 PCT year-on-year. We expect that it is mainly driven by the improvement of large-scale effect. The number of employees reached 2621 (yoy35.5%), matching the release of new production capacity in Shaoxing, which is expected to lay the foundation for high growth in 2022. In January 2022, the company completed the acquisition of British production capacity pharmaron manufacturing services, and completed the comprehensive end-to-end intermediate + API service capacity layout between China and the UK. Shaoxing phase I 200m3 has been put into production in 2022q1, and the remaining 400m3 is expected to be completed and put into use in the middle of 2022. In 2021, compared with 2020, 267 were added before clinical treatment, 22 were added in phase I-II, 17 were reduced in phase III, and 2 were added in process validation and commercialization. It is optimistic that CMC / cdmo revenue will continue to grow high under the accelerated release of production capacity.
Clinical cro: investment continues to increase, looking forward to entering a new cycle. The revenue was 956 million yuan (yoy52.0%), and the gross profit margin was 10.31% (a year-on-year decrease of 8.48 PCT). The company continues to increase the investment and personnel reserve of clinical research services, especially the capacity of clinical research services in China. In 2021, there were 3357 personnel (yoy52%). With the improvement of personnel reserve and industrial chain (the acquisition of Enyuan pharmaceutical technology and detaimai (Hangzhou)), we are optimistic that the clinical cro business will enter a new stage of development.
Macromolecule and CGT services: optimistic about medium and long-term income elasticity. In 2021, the revenue was 151 million (yoy466.58%), and the gross profit margin was - 13.84%, which was still in the period of high R & D investment. We are optimistic that with pharmaron biologicsuk undertaking external orders and the first phase project of Ningbo second Park (nearly 70000 Ping macromolecular cdmo base) undertaking macromolecular GMP production service projects in 2023, it will contribute to the high growth of the company's medium and long-term income.
Expenditure: the acceleration of capital expenditure provides capacity support for medium-term high income growth
In 2021, the company's capital expenditure for internal construction and extension M & A was 2.093 billion (yoy59.05%) and 1.437 billion (yoy30.61%) respectively, which was mainly used for laboratory services (mainly in Ningbo first and third parks), CMC / cdmo (Tianjin Phase III, Ningbo first park and Shaoxing factory), macromolecular cdmo (Ningbo second Park), etc. In 2021, fixed assets increased by 1.2 billion and projects under construction increased by 553 million, providing support for the capacity required for order execution from 2022 to 2023. In 2021, it completed the acquisition of pharmaronbiology (cgtcdmo), Enyuan pharmaceutical technology and detaimai (Hangzhou) (clinical cro, quantitative pharmacology, pharmacovigilance, etc.), Zhaoqing chuangyao (experimental animal) and kangruitai (Zhanjiang) (experimental animal), so as to further strengthen the industrial chain layout and capacity expansion.
Profit forecast and valuation
We expect the company's EPS to be 2.76, 3.60 and 4.77 yuan / share from 2022 to 2024. The closing price on March 25, 2022 corresponds to 42 times of PE in 2022 (32 times of PE in 2023), maintaining the "buy" rating.
Risk tips
Management risks brought by accelerated business layout, short-term fluctuations of orders, management challenges brought by clinical business layout, and new business expansion is less than expected risks.
