\u3000\u3 Guocheng Mining Co.Ltd(000688) 356 Jenkem Technology Co.Ltd(688356) )
Event: Jenkem Technology Co.Ltd(688356) released the annual report of 2021 and achieved a total revenue of 351 million yuan, an increase of 88.18% year-on-year; The net profit attributable to the parent company reached 176 million yuan, with a year-on-year growth rate of 105.16%; Net profit deducted from non parent company was 157 million yuan, an increase of 89.74% over the same period of last year; The net interest rate attributable to the parent company was 50.05%, with a year-on-year increase of 4.14 PCT; The net interest rate after deducting non profit was 47.75%, up 0.36 PCT year-on-year. Quarterly, the operating revenue of 2020q4 was 89 million yuan, with a year-on-year increase of 46.98%; Affected by R & D expenses, equity incentive expenses, sales bonus accrual and other items, the net profit attributable to the parent company is 33 million yuan, and the corresponding net interest rate is 37.39%. Overall, the company maintained rapid growth in revenue and profit, and its endogenous profitability was still at a high level.
Comments:
The demand of downstream customers drives the rapid growth of the company’s revenue. Among Chinese customers, polyethylene glycol modified drugs aido ( Jiangsu Hengrui Medicine Co.Ltd(600276) ), jinsaizeng (Changchun Jinsai), paibinger ( Xiamen Amoytop Biotech Co.Ltd(688278) ) and fulaimei (Jiangsu Haosen) use peg raw materials provided by the company. In 2021, the sales of related products increased significantly. With the continuous large-scale production of commercial preparation products by downstream customers, the revenue of related products and technical services of the company increased steadily. Among overseas customers, cooperative R & D projects have entered the third phase of clinical research, and the demand for PEG is expected to continue to increase; Maintain a good peg supply relationship with well-known medical device enterprises and continue to contribute revenue stably. Driven by the continuous increase of demand for lipid related vaccines, the revenue of pg-19 is expected to become a new breakthrough point in the research and development of lipid related vaccines. In 2021, the international revenue far exceeded expectations, the number of new kilogram orders and new customers increased significantly, and the international recognition continued to improve.
Continuously expand the application scope of PEG in the field of medicine. The company’s key self-developed drug peg irinotecan (jk-1201i) has significant and broad-spectrum antitumor activity, and its efficacy is better than irinotecan hydrochloride with the same administration scheme. It has entered the phase II clinical stage. At present, there is no such domestic drug on the market, and it is expected to explore new profit growth points through technology transfer and other modes in the future. The company actively explores the frontier drug field, arranges the nucleic acid drug delivery system, expands the application of PEG in ADC and protacs, and continues to strengthen the technical moat.
ODM mode expands scientific research users. In the Chinese market and the international market, the company chooses to cooperate with Shanghai Titan Scientific Co.Ltd(688133) and sigma Aldrich respectively to provide OEM production services for its peg product series, jointly develop the application of PEG derivative products in the scientific research market, improve the expansion efficiency of new users and enhance the stickiness of users.
High R & D investment stabilizes the leading position in the industry. During the reporting period, the company continued to increase R & D investment, with R & D expenses reaching 54 million yuan, a year-on-year increase of 105.21%, and set up a new medical and aesthetic device department and registration department to support the industrialization of PEG medical devices and the registration and application of PEG drugs. The company’s continuous high R & D investment will further consolidate the company’s leading position in the field of medical polyethylene glycol with high purity and low dispersion.
Production capacity is expected to continue to expand. The company’s existing production capacity is only 2 tons, which is difficult to meet the sales demand. At present, Panjin Jiankai has completed the main construction. The company is expected to conduct trial production in the third quarter of 2022, with a production capacity of about 12-20 tons, which is expected to alleviate the current tight situation of the company’s production capacity and provide long-term support for the company. Tianjin Jiankai still has a capacity of 12-20 tons under construction, and the plant is expected to be completed in 2022.
Profit forecast: it is estimated that the company’s revenue from 2022 to 2024 will be 493 / 637 / 806 million yuan respectively, with a year-on-year increase of 40.3% / 29.2% / 26.6%. The net profit attributable to the parent company was 249 / 326 / 413 million yuan respectively, with a year-on-year increase of 41.8% / 30.7% / 26.7%, corresponding to EPS of 4.16/5.43/6.88 yuan and PE of 49 / 37 / 29 times from 2022 to 2024.
Risk factors: product R & D progress is less than expected; Capacity expansion is less than expected; Customer expansion was less than expected, and the number of new orders was less than expected.
