\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 63 Porton Pharma Solutions Ltd(300363) )
In 2021, the company realized an 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 net profit deducted from non parent company was 503 million yuan, with a year-on-year increase of 74.42%. The gross profit margin and net profit margin of the company were 41.36% and 15.32% respectively, basically the same as last year; The net operating cash flow was 480 million yuan, a year-on-year increase of – 4.80%; R & D investment totaled 264 million yuan, a year-on-year increase of 67.15%. Among them, 2021q4 achieved an operating revenue of 1.075 billion yuan, an increase of 84.20% year-on-year and 38.93% month on month; The net profit attributable to the parent company was about 163 million yuan, 91.09% year-on-year and 11.69% month on month; The R & D cost was 40 million yuan, a year-on-year increase of – 7.88%.
Key points supporting rating
In 2021, the company’s performance was bright and the expense rate decreased during the period. In 2021, the company’s API cdmo business achieved a revenue of 3.069 billion yuan, a year-on-year increase of 51%. The cdmo business of preparations achieved a revenue of RMB 2016 million. The cdmo business of gene cell therapy achieved a revenue of 13.87 million yuan, a year-on-year increase of 897%. After excluding the influence of factors such as preparation cdmo business and gene cell therapy cdmo business, the net profit attributable to the parent company in 2021 was 661 million yuan, with a year-on-year increase of about 80%. In 2021, the company’s expense ratio decreased by 3.47pct to 20.89% year-on-year. Among them, the rate of administrative expenses was 9.33%, a year-on-year decrease of 1.62pct. The increase of management expenses is mainly due to the increase of personnel salary and the amortization of equity incentive expenses of the company; The R & D expense rate was 8.50%, with a year-on-year increase of 0.88pct. This is related to the increase of R & D personnel salary, R & D related raw materials, consumables and other expenses; The sales expense ratio was 3.12%, with a year-on-year decrease of 0.58pct; The financial expense ratio was -0.06%, down 2.14 PCT year-on-year.
Continuously expand customer pipelines, and the diversion synergy of each business line appears. 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. The top ten customers account for 63%; In 2021, the number of service items (excluding J-star) of the company totaled 410, with a year-on-year increase of 14%. 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. The company’s top ten products account for 37% of its revenue. U.S. cro business platform J-star achieved an operating revenue of 230 million yuan in 2021, with a year-on-year increase of 8%.
Strengthen capacity-building in terms of production capacity, R & D capacity, management and operation capacity, etc. 1) In the cdmo business segment of API, by the end of the 21st century, the company had a production capacity of about 2019 cubic meters, an increase of about 65%. In the cdmo business segment of gene cell therapy, part of the gene cell therapy service platform project of boten biology in Sangtian island has been completed and put into use. 2) In terms of talent and organizational development, the company has formulated differentiated incentive measures. 3) Earnestly implement the development of technology platforms in the three business segments. 4) In 2021, the company started the transformation and upgrading of digital intelligence.
Valuation
The company’s performance in 2021 exceeded expectations, and considering the signing of large orders, we raised our profit expectation. We estimate that the net profit of the company from 2022 to 2024 will be RMB 1.26 billion, RMB 1.42 billion and RMB 1.78 billion (originally predicted that the net profit from 2022 to 2023 will be RMB 874 million and RMB 1.067 billion), and the corresponding EPS will be RMB 218, 2.45 and 3.06, maintaining the buy rating.
Main risks of rating
Risk of delisting or large-scale recall of innovative drugs served; Risk of order fluctuation; The risk of continued loss of performance of the acquisition object; Investment risk of fixed assets, etc.
