\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 63 Porton Pharma Solutions Ltd(300363) )
Key investment points
Event: the company released the annual report of 2021 and the performance forecast of the first quarter of 2022. In 2021, the company achieved a total operating revenue of 3.105 billion yuan, a year-on-year increase of 49.87%; The net profit attributable to the parent company was 524 million yuan, a year-on-year increase of 61.49%. The company expects that the revenue in the first quarter of 2022 will increase by 150% – 170% year-on-year, and the net profit attributable to the parent company will increase by 270% – 290% year-on-year.
Comments:
Core business and core sales areas maintained rapid growth. In terms of business, in 2021, the company’s core business API cdmo business achieved a revenue of 3.069 billion yuan, a year-on-year increase of 51%; The cdmo business of preparation achieved a revenue of RMB 2016 million and achieved a breakthrough of “from 0 to 1”; The cdmo business of gene therapy achieved a revenue of 13.87 million yuan, a year-on-year increase of 897%. From the perspective of the customer’s region, the company’s largest market, the European market, had a year-on-year increase of 40% in revenue in 2021, and the second North America and the third China markets had a year-on-year increase of 71% and 110% respectively.
Continue to increase customer expansion and pipeline construction. In 2021, the company introduced 113 new customers, including 76 new customers of API cdmo business, 23 new customers of preparation cdmo business and 15 new customers of gene cell therapy cdmo business. In 2021, the company served 277 customers (including order customers only), and the revenue of the top ten customers accounted for 63%. In 2021, the total number of service items of the company (including only the items that realize sales, excluding J-star) was 410, with a year-on-year increase of 14%. Among them, 209 projects are in preclinical and clinical phase I, 65 projects are in clinical phase II, 44 projects are in clinical phase III, 10 projects are in the application stage of new drug listing, and 87 projects are in the listing stage. The company introduced 212 new products (excluding J-star), and the revenue contributed by new products (excluding J-star) accounted for about 29% of the total operating revenue in 2021.
Continue to expand production capacity. In the cdmo business segment of API, by the end of 2021, the company had a production capacity of about 2019 cubic meters, with a year-on-year increase of about 65%, mainly from the newly put into operation workshop 109 of Changshou production base and the capacity of Yuyang pharmaceutical acquired through extension. In the preparation cdmo business segment, in May 2021, the first phase of the company’s preparation production base in Liangjiang New Area of Chongqing was started, and the capping of the main project was completed in November. It is expected to be completed and put into operation in the fourth quarter of 2022. In the cdmo business segment of gene cell therapy, in 2021, the laboratory on the fourth floor of the gene cell therapy service platform project of boten biology in Sangtian Island, Suzhou was completed and put into use, so as to further strengthen the company’s ability in gene therapy process development, analysis and detection.
There are enough orders on hand. In 2021, the company signed a small molecule innovative drug cdmo order of 217 million US dollars, and the order fulfillment time is 20212022; In 2021, some products of the above orders have been delivered, and the revenue of 316 million yuan has been recognized. In February 2022, the company signed a Pfizer cdmo order of 681 million yuan, which will be fulfilled in 2022. The company has sufficient orders on hand and will deliver them successively in 2022, boosting the high growth of performance in 2022.
Maintain recommended ratings. The company continues to improve its R & D technology level and capacity expansion, and its future growth can be expected. The company’s earnings per share from 2022 to 2023 are expected to be 2.08 yuan and 2.5 yuan respectively, and the current share price corresponding to PE is 45 times and 38 times respectively, maintaining the “recommended” rating of the company.
Risk tips: industry competition intensifies, capacity expansion is less than expected, exchange rate fluctuates sharply, brain drain, performance growth is lower than expected, loss of key customers, industry policy risk, etc
