\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 4.64 billion yuan in 2021, a year-on-year increase of 47.3%; The net profit attributable to the parent company was 1.07 billion yuan, a year-on-year increase of 48.1%; The net profit deducted from non parent company was 940 million yuan, with a year-on-year increase of 45.3%.
Comments:
The annual performance increased rapidly, and the gross profit margin remained stable excluding the impact of exchange rate. Quarterly, Q1-Q4 achieved revenue of RMB 780 / 9.8 / 11.6 / 1.72 billion (+ 63.4% / + 24.4% / + 42.3% / + 60.8%) and net profit attributable to parent company of RMB 1.5 / 2.8 / 2.7 / 370 million (+ 42.9% / + 32.5% / + 39.3% / + 73.5%) respectively. The delivery of some large orders in Q4 further drove the rapid growth of the company’s annual performance. In 2021, the gross profit margin was 44.3%, with a year-on-year decrease of 2.3pct. The company has a large number of USD settlement orders. Excluding the impact of exchange rate, it is speculated that the gross profit margin of the company has increased slightly.
Small molecule business is growing rapidly, and large orders push the revenue to a new level in 2022. In 2021, the company’s small molecule clinical and preclinical projects and commercial projects achieved revenue of 1.72 billion yuan (+ 37.6%) and 2.52 billion yuan (+ 51.7%) respectively, with rapid growth. A total of 328 projects recognized revenue during the reporting period, including 235 / 55 / 38 pre clinical and early clinical projects, clinical phase III projects and commercial phase projects respectively. The project structure was further optimized and the funnel benefits were prominent. The annual capacity was further improved. By the end of 2021, the volume of the company’s traditional batch reactor was nearly 4700 cubic meters. It is expected that the small molecule capacity by the end of 2022 will increase by 46% compared with the end of 2021. Combined with the large-scale application of continuous reaction technology, it will fully meet the capacity requirements of the company’s small molecule large orders and conventional orders. The accumulated amount of large orders of the company has exceeded 9.3 billion yuan, and the revenue recognized in 2021 is 1.23 billion yuan. The main delivery time is 2022, which is expected to promote the company’s revenue to exceed 10 billion yuan for the first time.
New business has entered a period of rapid development, and its future prospects are promising. In 2021, the company made rapid progress in new businesses such as preparations, chemical macromolecules, biosynthetic technology and biological macromolecules, realizing a revenue of 400 million yuan, with a year-on-year increase of 67.4%, including a year-on-year increase of 42.5% in chemical macromolecules business, 80.3% in preparations sector and 83.7% in clinical cro business. In the whole year, 327 new service projects were completed, and the proportion of total revenue increased to 8.6% from 2.2% in 2018. With the establishment of major technology platforms and continuous updating iterations, as well as the synergy between sectors, it is expected that the proportion of revenue from new business sectors will continue to increase, opening the second growth curve for the company.
Profit forecast: we expect that from 2022 to 2024, the company’s revenue will be RMB 11.94/12.50/12.17 billion respectively, with a year-on-year increase of 157.5% / 4.7% / – 2.7% respectively; The net profit attributable to the parent company was 3.0/3.06/2.97 billion yuan respectively, with a year-on-year increase of 180.9% / 1.7% / – 2.6% respectively. The current closing price corresponding to PE is 32 / 32 / 33 times respectively. The company is a small molecule cdmo enterprise with global competitiveness. At the same time, the comprehensive layout and rapid development of new business have brought medium and long-term growth power to the company. It is covered for the first time and is rated as “buy”.
Risk warning: loss of customer orders; Price rise of raw materials; Exchange rate fluctuations; Loss of core technical personnel; Industry competition intensifies; Order delivery is not as expected; Policy risk.
