\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 47 Hangzhou Tigermed Consulting Co.Ltd(300347) )
Event:
Hangzhou Tigermed Consulting Co.Ltd(300347) released the annual report of 2021. The annual operating income of the company increased by 3.26 billion, with a year-on-year increase of 3.26 billion; The net profit attributable to the parent company was 2.874 billion, a year-on-year increase of 64.26%; The net profit of non parent company deduction was 1.232 billion, with a year-on-year increase of 73.90%; The company’s annual net operating cash flow was 1.424 billion yuan, a year-on-year increase of 42.57%.
The company issued the incentive plan for the appreciation right of H shares (Draft) and the employee stock ownership plan for A-Shares (Draft). In the draft H-share equity incentive plan, the company plans to grant no more than 449900 H-share appreciation rights to the granted objects (no more than 90 people), accounting for about 0.0516% of the total share capital of the company at the time of the announcement of the draft, in order to encourage the executives, core technicians and business personnel who have employment or labor relations with the company’s overseas funded companies. In the draft A-share employee stock ownership plan, the company transferred no more than 3608100 shares to no more than 782 directors, supervisors, senior executives and core technology (business) backbone employees for 73.80 yuan.
Comments:
The gross profit margin decreased, the scale effect significantly reduced the expense rate and raised the net profit margin. In 2021, the company’s comprehensive gross profit margin was 43.55% (year-on-year – 3.88 PPS), the net profit attributable to the parent was 55.13% (year-on-year + 0.32 PPS), and the net profit deducted from non attributable to the parent was 23.62% (year-on-year + 1.44 PPS). During 2021, the expense rate was 12.90% (year-on-year -10.03 PPS), of which the administrative expense rate was 10.50% (year-on-year -1.74 PPS), the R & D expense rate was 4.06% (year-on-year -0.84 PPS), the sales expense rate was 2.48% (year-on-year -0.54 PPS), and the financial expense rate was – 4.15% (year-on-year -6.91 PPS). The increase of business handling fee and exchange loss reduced the comprehensive gross profit margin, which significantly reduced the company’s period expense rate and maintained the stability of net profit margin.
Driven by the two major businesses, overseas expansion has achieved initial results and promoted the rapid growth of performance. In 2021, in 2020, businesses adversely affected by the epidemic showed strong growth, rising customer demand, better control of the epidemic outside China, further economic recovery and other factors, which promoted the rapid growth of the company’s main business. In terms of clinical experimental technology, the company achieved a revenue of 5.187 billion yuan, a year-on-year increase of + 63.32% and a gross profit margin of 43.38%; 567 ongoing clinical projects (+ 178), including 231 phase I and be projects, 106 phase II, 148 phase III, 37 phase IV and 45 IIT and real-world studies; In terms of sub regions, the company shares 385 domestic single projects, 132 overseas single projects and 50 multi center projects; The company has made great efforts to expand the service field of medical devices. In 2021, it helped 3 Innovation Medical Management Co.Ltd(002173) devices and 2 artificial intelligence medical software to be listed. At present, there are 341 ongoing device projects. In terms of clinical research related services and laboratory services, the company achieved a revenue of 2.994 billion yuan, a year-on-year increase of + 32.39% and a gross profit margin of 41.48%; In 2021, 203 on-site management projects (SMO) were completed, 1432 (+ 252) are being implemented, and there are more than 2700 CRC; There are 743 ongoing projects in data system business, 485 in China and 258 abroad, realizing seamless cooperation between China and foreign countries. In the same year, 47 new customers were added to further expand their influence; Fonda holdings is implementing 2516 projects (+ 487), and carried out a number of acquisitions and expansion in the same year, significantly increasing laboratory capacity and improving business scope and geographical coverage. The two businesses worked together to drive the steady development of the company, realizing 9.645 billion yuan of new orders, a unified increase of + 74.22%, and 11.405 billion yuan of orders on hand, a year-on-year increase of + 57.09%.
Equity incentive improves the stability of the company’s employees and demonstrates the confidence in long-term steady development. As a company with asset light operation and personnel driven development, it currently has 8326 employees, including 7602 project operators, 6672 in China, 320 in Asia Pacific (excluding China), 574 in America and 36 in Europe + Middle East + Africa. From the perspective of personnel number, the company’s overseas expansion has achieved remarkable results. We believe that the two draft equity incentive and shareholding plans are conducive to reducing the company’s liquidity, improving personnel stability and increasing the company’s executive ability. Both drafts set assessment requirements for the performance of 22-23 years: Based on the net profit of 2021, the growth rate will be more than 40% in 2022, more than 75% in 2023 and more than 105% in 2024. The performance guidance of high growth shows the goal and confidence of the company’s long-term and steady development.
Profit forecast: Based on the fact that the company’s new orders and orders on hand exceed the expectation and the setting of the company’s equity incentive target, we raise our profit forecast for the company. It is estimated that the company’s operating revenue will be 7.793/11.489/16.892 billion yuan from 2022 to 2024, with a year-on-year increase of 49.5% / 47.4% / 47.0%; The net profit attributable to the parent company was RMB 3.939/5.142/6.755 billion respectively, with a year-on-year increase of 37.1% / 30.55/31.4%, corresponding to 22 / 17 / 13 times of PE from 2022 to 2024.
Risk factors: increased competition in the industry, decline in R & D investment and outsourcing demand in the pharmaceutical industry, China’s international policies, loss of core technicians and other risks.
