\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Event overview the company announced that the annual report of 2021: the annual operating revenue was 4.639 billion yuan, a year-on-year increase of 47.28%; The net profit attributable to the parent company was 1.069 billion yuan, a year-on-year increase of 48.08%; The non net profit deducted was 935 million yuan, a year-on-year increase of 45.22%.
Analysis and judgment:
The performance is in line with market expectations. Looking forward to 22 years of large order business and long tail customer development, it will continue to contribute core performance flexibility to the company
In 2021, the company achieved an operating revenue of 4.639 billion yuan, a year-on-year increase of 47.28%, of which the operating revenue of 2021q4 in a single quarter was 1.716 billion yuan, a year-on-year increase of 60.83%. We judged that the performance continued to grow at a high speed and met market expectations due to the implementation of large order business signed in November 2021. As the world’s leading cdmo supplier of API, the company is expected to continue to show ultra-high growth under the catalysis of continuous landing of large orders and development of long tail customers.
(1) the overall operating revenue is in line with expectations, and the large order business will continue to contribute performance flexibility to 2022: in 2021, the small molecule cdmo business achieved an operating revenue of 4.238 billion yuan, with a year-on-year increase of 45.63%, including 1.23 billion yuan for large orders and 3.01 billion yuan for conventional business, with a year-on-year increase of 3%. According to the three major contracts and orders signed on November 17, 2021, November 29, 2021 and February 21, 2022, the cumulative contract amount is about 9.34 billion yuan. According to the data of the company’s 2021 annual report, 1.23 billion yuan of revenue is recognized in 2021. We judge that most of the remaining 8.11 billion yuan will be recognized in 2022, contributing elasticity to the company’s performance growth in 2022.
(2) long tail customers (overseas small and medium-sized pharmaceutical enterprises and Chinese customers) continued to contribute performance growth elasticity: in 2021, overseas small and medium-sized pharmaceutical enterprises and Chinese business increased by 50.99% and 64.44% respectively year-on-year, and continued to contribute performance elasticity to the company. In 2021, the revenue of overseas small and medium-sized pharmaceutical enterprises and Chinese customers accounted for nearly 30%. Looking forward to the future, the company will continue to expand the breadth and depth of customers, and this part of customer business is expected to continue to show rapid growth.
(3) the number of covered pipelines increased significantly, especially pre clinical and early clinical projects: the company generated 328 revenue pipelines in 2021, with a year-on-year increase of 48%, including 235 early clinical and pre clinical pipelines, 55 clinical phase III pipelines and 38 commercialized pipelines, showing a significant increase compared with 2020, laying a foundation for the future performance growth of the company.
From the supply side, it continues to accelerate the release, laying the foundation for future performance growth
According to the 2021 annual report data, the company’s orders on hand reached US $1.898 billion, a year-on-year increase of 320%. In addition, considering that the company’s phase III and commercial pipelines are in rapid growth, in order to meet the incremental demand, the company will accelerate the release of production capacity and accelerate employee recruitment in 2021, so as to improve the supply side production capacity and lay a foundation for future performance growth.
(1) the capacity continues to be released at a high speed: the overall volume of small molecule reactor of the company at the end of 2021 is 4700 cubic meters (Note: the data at the end of March 2022 is 5000 cubic meters), with a year-on-year increase of 68%. In addition, according to the data of annual report of 2021, the company will successively put into operation 2000 cubic meters of capacity in Dunhua, Tianjin and Zhenjiang in 2022, with a year-on-year increase of 43%. The accelerated release of the company’s production capacity can meet the needs of key customers on the one hand and lay the foundation for the demand of incremental orders in the future on the other hand.
(2) the number of employees continues to show rapid growth: at the end of 2021, the number of employees reached 7126, a year-on-year increase of 30%, including 3380 R & D personnel, a year-on-year increase of 29.7%.
New business development: diversify business layout and add imagination to the company
On the basis of deep cultivation of small molecule cdmo business, the company has rapidly developed chemical macromolecule business (oligonucleotide, polypeptide, liposome, etc.), preparation, bioengineering and other businesses, and steadily expanded clinical research services, biological macromolecule cdmo and other businesses. Among them, the preparation business and bioengineering field continue to empower and realize collaborative business cooperation in the field of small molecule, oligonucleotide, polypeptide and biological macromolecule. In 2021, the company’s new business realized an operating revenue of 398 million yuan, with a year-on-year increase of 67.43%, of which the chemical macromolecule business increased by 42.48%, the preparation sector increased by 80.33% and the clinical cro business increased by 83.71% year-on-year. Looking forward to the future, with the continuous layout of synthetic macromolecules, biological macromolecules, clinical cro, biosynthesis and other businesses, the company’s new business will achieve rapid growth and increase the imagination of future performance growth.
Performance forecast and investment suggestions
As China’s leading supplier of small molecule cdmo, the company looks forward to the future and continues to cultivate the integrated service capacity of small molecule “intermediate + API + Preparation”. In addition, the company continues to strengthen the layout in the field of synthetic macromolecules and biological macromolecules, so as to escort the medium and long-term performance growth of the company. Considering the fluctuation of large order confirmation, slightly adjust the profit forecast of 22-23, that is, the revenue is adjusted from RMB 12.573/12.807 billion in 22-23 to RMB 12.593126.77/13.084 billion in 22-24, and the EPS is adjusted from RMB 10.31/10.61 in 22-23 to RMB 11.30/11.60/11.77 in 22-24, corresponding to the closing price of RMB 374.59/share on March 30, 2022, and the PE is 33.15/32.29/31.83 times respectively, maintaining the “buy” rating.
Risk tips
The core technology backbone and management risk of loss, the risk of intensified competition, the loss of core technical personnel, the risk of exchange rate fluctuations, the expansion of New Coronavirus’s epidemic affecting China’s external business, the lower than expected implementation of COVID-19 orders, and the uncertainty of Shanghai’s Asymchem Laboratories (Tianjin) Co.Ltd(002821) biological capital increase.
