\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 47 Hangzhou Tigermed Consulting Co.Ltd(300347) )
Event: the company released the annual report of 2021, which realized an operating revenue of 5.21 billion in 2021, with a year-on-year increase of 63.3%; The net profit attributable to the parent company was 2.87 billion, a year-on-year increase of 64.3%; The net profit deducted from non parent company was 1.23 billion, with a year-on-year increase of 73.9%; The net cash flow from operating activities was 1.42 billion, a year-on-year increase of 42.6%.
The demand increment drives the growth of new signed orders higher than expected. In 2021, the company’s new contract amount was 9.65 billion yuan, a year-on-year increase of 74.2%, and the revenue from leading multinational companies, Chinese biopharmaceutical companies and other customers increased significantly. Reasons for the increase in orders: 1) increased demand for clinical trials of covid-19 pneumonia vaccine and therapy; 2) With the increasingly strict regulatory system, the accelerated development of new technologies and analytical tools, customers’ demand for the company’s emerging services, such as scientific affairs, pharmacovigilance, real-world research, medical translation, medical imaging and GCP certification consulting, has increased. The company’s orders are expected to maintain a good growth in 2022, which is also expected to drive the rapid growth of performance.
Strengthen the implementation capacity of multi regional clinical trials and accelerate the international strategic layout. In 2021, the company established an integrated upstream and downstream service center in China to provide multiple services simultaneously, and established a globally integrated SOP process and budget management system to efficiently support global business. By the end of 2021, the number of single regional clinical trials under way outside the company (including South Korea, Australia and the United States) had increased to 132; The number of ongoing international multicenter clinical trials (MRCT) in Asia Pacific, North America, Europe, Africa and Latin America increased to 50. The company continues to consolidate its leading position in the industry and expand its global influence.
Establish a long-term incentive mechanism to fully mobilize the enthusiasm of employees. 1) Incentive plan for H-share appreciation right in 2022: the incentive objects are 90 senior managers, core technicians and business personnel who have employment or labor relations with overseas subsidiaries of the company, and no more than 449900 H-share appreciation rights are granted (accounting for 0.0516% of the total share capital of the company). 2) 2022 A-share ESOP: no more than 782 directors, supervisors, senior executives and core technical backbone employees will participate, and no more than 3608100 shares will be granted at 73.8 yuan / share. The company’s net profit growth rate in 2022 is not lower than 40% in 2021, which reflects the confidence of the company’s net profit growth base in 2022.
Profit forecast and rating. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 3.61 billion yuan, 4.4 billion yuan and 5.29 billion yuan respectively, and the EPS will be 4.14 yuan, 5.04 yuan and 6.06 yuan respectively, corresponding to the current stock price valuation of 26 times, 21 times and 18 times respectively, maintaining the “hold” rating.
Risk tip: the number of orders fell or fluctuated, the production capacity was put into operation less than expected, and the business expansion was less than expected.
