\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Event overview
On March 30, 2022, Asymchem Laboratories (Tianjin) Co.Ltd(002821) released the 2021 annual report: the annual operating revenue was 4.639 billion yuan, an increase of 47.28% year-on-year; The net profit attributable to the parent company was 1.069 billion yuan, a year-on-year increase of 48.08%; The net profit deducted from non parent company was 935 million yuan, with a year-on-year increase of 45.22%.
Five positive marginal changes guide small molecule cdmo business to maintain a high-speed growth trend
In 2021, the business income of small molecule cdmo was 4.238 billion yuan, a year-on-year increase of 45.63%, excluding exchange rate factors, a year-on-year increase of 48.07%. In terms of project stages, the project revenue in the clinical stage was 1.723 billion yuan, a year-on-year increase of 37.6%; In the commercialization stage, the project realized a revenue of 2.515 billion yuan, a year-on-year increase of 51.7%.
1) large orders at historical level highlight the important strategic position of the company in the global small molecule cdmo supply chain. At present, the company’s orders on hand are US $1.898 billion, a year-on-year increase of 320%; Among them, the cumulative amount of historical commercial orders is about $1.464 billion. Under the condition of obtaining revenue certainty, the company can more focus and actively explore new customers, new businesses and new markets.
2) overseas acquisition of snapdragon to further complete the global production capacity layout. Founded by two MIT senior professors, the company is an excellent continuous response CDO company. It has strong synergy with the company, which is helpful to further improve the company’s competitiveness in the field of continuous response and expand overseas markets.
3) become a major customer in Shenzhen, and its strength has been highly recognized by well-known overseas pharmaceutical enterprises. The company has participated in more than 30% of the phase II and phase III small molecule candidate drugs of the five major multinational pharmaceutical companies in the United States, and more than 50% of them. At the same time, it obtained the first commercial project order from a large pharmaceutical company in Japan.
4) expand small and medium-sized customers and enrich project pipelines. The income of overseas small and medium-sized pharmaceutical companies continued to increase, with a year-on-year increase of 50.99%; China’s small molecule revenue increased by 64.44%, with more than 30 NDA orders in hand, which will be successively transformed into commercial orders in the next 2-3 years.
5) accelerate the expansion of production capacity and highly match the demand of orders. At present, the company’s production capacity has reached 5000 cubic meters, an increase of 76.9% compared with the end of 2020. It is expected that the production capacity of small molecule traditional batch reactor by the end of 2022 will increase by 46% compared with the end of 2021.
The revenue of strategic emerging businesses grew strongly, blossomed at multiple points and went hand in hand
In 2021, the revenue from emerging services was 398 million yuan, a year-on-year increase of 67.43%, excluding exchange rate factors, a year-on-year increase of 70.5%. The proportion of emerging business income has increased from 2.19% in 2018 to 8.57%. Chemical macromolecules, preparations and clinical cros have accumulated from “0 to 1” and entered a period of rapid development.
1) accelerating the layout of biological drug cdmo: continue to improve the business layout, gradually have the ability to undertake orders for monoclonal antibody, ADC, plasmid and mRNA, and introduce strategic investor Hillhouse capital. It is planned to jointly invest 2.5 billion yuan to build a first-class biological cdmo platform. At present, the orders on hand are 130 million yuan +.
After undertaking more than 42 major clinical projects, the revenue increased rapidly from 2021 to 2022.
3) clinical cro business has become an important part of serving customers: in 2021, revenue increased by 83.71% year-on-year, orders on hand exceeded 300 million yuan +, the number of newly signed projects exceeded 150, and the company has built a clinical team of more than 500 people.
4) the preparation business entered the fast lane: the revenue exceeded 100 million yuan for the first time, with a year-on-year increase of 80.33%, and the orders from overseas customers such as the United States / South Korea exceeded 40%. There were 40 API + Preparation projects, with significant synergy.
5) continuous promotion of biosynthesis technology sector: undertake the process characterization project and post clinical R & D and production project of biological new drug listing application (BLA) for the first time, and the orders are widely distributed, including engineering enzymes, recombinant proteins, medicinal enzymes, etc.
Net profit achieved super excellent performance, accelerated capital expenditure and guided the rapid development of the company
In 2021, the company realized a net profit attributable to the parent company of 1.069 billion yuan, with a year-on-year increase of 48.08% and a net profit margin of 23.05%. The excellent performance among peers is mainly due to the continuous improvement of capacity utilization and the further manifestation of scale effect through continuous optimization of operation efficiency. In 2022, the company will continue to increase capital expenditure, with an estimated capital expenditure of 3-3.6 billion yuan, and quickly promote the construction of small molecule capacity, oligonucleotide kilogram capacity, biological macromolecule Jinshan ADC capacity, as well as the construction of Fengxian commercial production base.
Investment advice: driven by large orders, we believe that the company’s revenue and profit will grow strongly in 2022. At the same time, the company is also accelerating the construction of production capacity in various sectors. In the future, driven by the large and small wheels of small molecule cdmo in the core sector and emerging services in the incremental sector, the company is expected to maintain a high growth trend. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 2.56 billion yuan, 2.72 billion yuan and 3.14 billion yuan respectively, corresponding to 37, 35 and 30 times of the current share price PE respectively, maintaining the “recommended” rating.
Risk warning: the risk of performance falling short of expectations, new business investment risk and fixed asset investment risk.
