\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 47 Hangzhou Tigermed Consulting Co.Ltd(300347) )
Conclusions and suggestions:
Company performance: the company achieved an operating revenue of 5.21 billion yuan in 2021, yoy + 63.3%; The net profit attributable to the parent company was 2.87 billion, yoy + 64.3%; After deducting non profit, the net profit was 1.23 billion yuan, yoy + 73.9%, and the net cash flow from operating activities was 1.42 billion yuan, yoy + 42.6%. The company’s performance was consistent with the performance express and in line with expectations. Among them, Q4 achieved a revenue of 1.82 billion yuan in a single quarter, yoy + 103.9%, a net profit of 1.09 billion yuan, yoy + 153.2%, a net profit of 360 million yuan after deduction, yoy + 72.2%. The company’s dividend plan is to distribute a cash dividend of 5 yuan (including tax) for every 10 shares.
Driven by covid-19 orders, the clinical trial technical service business increased rapidly, and the newly signed orders increased significantly throughout the year: (1) the company’s clinical trial technical service revenue was 2.99 billion yuan, yoy + 97.1%, mainly due to the increase of relevant clinical trials of covid-19 pneumonia vaccine and therapeutic drugs and the recovery of the demand for clinical trials outside China after epidemic control, with the gross profit margin decreased by 5.4 percentage points year-on-year to 44.8%, The main reason is that the overcharge of some covid-19 pneumonia related clinical trials is high and the gross profit margin is low, while the gross profit margin of other clinical trials is stable. (2) The company’s clinical trial related and trial service business achieved a revenue of 2.19 billion yuan, yoy + 32.4%. The revenue growth was mainly due to the growth of trial services, on-site management and data statistics services. The gross profit margin decreased by 3.1 percentage points to 41.5% year-on-year. On the one hand, it was due to the appreciation of RMB, on the other hand, the on-site management business with low gross profit margin recovered rapidly and the proportion of revenue increased. (3) In 2021, the company achieved a total of 9.65 billion yuan of new orders, yoy + 74.22%, and 11.41 billion yuan of orders on hand, a year-on-year increase of + 57.1%, which laid a good foundation for the growth of the company’s performance.
Equity incentive and stock ownership plan bind the core team to boost high growth: the company also issued A-share employee stock ownership plan (Draft) and H-share stock appreciation right incentive plan (Draft). Among them, the employee stock ownership plan of A-Shares is intended to grant 782 directors, supervisors and core employees with a total of no more than 3608000 shares, and the transfer price is 73.8 yuan / share. The incentive plan of stock appreciation right of H shares includes 90 executives and core employees of overseas subsidiaries, and grant no more than 449900 H shares (excluding actual shares, the difference between the price of H stock market and the exercise price on the exercise date, and finally take cash payment as the income of the incentive object). The unlocking conditions / exercise conditions of the two schemes are that the year-on-year growth of net profit after deduction of Non Profits in 2022, 2023 and 2024 is not less than 40%, 25% and 17% respectively. We believe that this incentive measure will help the company bind core teams outside China and also contribute to the rapid growth of the company’s performance.
Profit forecast: considering the assessment requirements of the company’s equity incentive plan and employee stock ownership plan and the growth of the company’s orders, we raised the profit forecast. We estimate that the net profit of the company in 2022 and 2023 will be 3.52 billion yuan and 4.21 billion yuan, respectively, yoy + 22.3% and + 19.8% (the net profit of the company in 2022 and 2023 was originally estimated to be 3.31 billion yuan and 3.82 billion yuan, respectively, yoy + 18.3% and + 15.4%), and EPS will be 4.0 yuan and 4.8 yuan respectively. The current share price corresponds to 24 times and 20 times of PE of A-Shares in 2022 and 2023, 18 times and 15 times of PE of H shares, respectively. The current valuation is reasonable, We maintain the investment proposal of “buying” A / H shares.
Risk tip: the R & D investment of innovative drug enterprises is less than expected, the merger and acquisition integration is less than expected, the investment income of the company does not meet expectations, and the impact of the epidemic is more than expected
