\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Event: the company issued the annual report of 2021. In 2021, the company achieved an operating revenue of 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 net profit deducted from non parent company was 935 million yuan, a year-on-year increase of + 45.22%. Looking at 2021q4 alone, the company achieved a revenue of 1.716 billion yuan, a year-on-year increase of + 60.83% and a month on month increase of + 47.56%; The net profit deducted from non parent company was 339 million yuan, a year-on-year increase of + 80.88% and a month on month increase of + 39.26%. The company’s performance growth is in line with expectations.
Small molecule cdmo service: the speed of capacity construction is accelerated to ensure the timely delivery of large orders. In 2021, the company’s small molecule cdmo service achieved a revenue of 4.238 billion yuan, a year-on-year increase of + 45.63%. Among them, the income of clinical and preclinical projects was 1.723 billion yuan, a year-on-year increase of + 37.58%, and the gross profit margin decreased by 8.46 PCT to 40.75%, which was mainly affected by exchange rate fluctuations and project structure; The revenue of commercial projects was 2.515 billion yuan, up + 51.70% year-on-year, and the gross profit margin increased by 2.31pct to 47.59% year-on-year, mainly affected by the improvement of capacity utilization. During the reporting period, the number of service items of the company reached 328, with a year-on-year increase of + 48.42%; Among them, there were 235, 55 and 38 clinical, preclinical, clinical phase III and commercial projects, with a year-on-year increase of + 59.86%, + 30.95% and + 18.75%. The project structure was further optimized and the funnel effect was prominent. From the perspective of subregions and customers, the revenue of small molecule business in China was + 64.44% year-on-year, and the revenue of overseas small and medium-sized innovative drug customers was + 50.99% year-on-year. The growth power of small molecule business of the company was sufficient. In terms of capacity construction, by the end of 2021, the volume of the company’s traditional batch reactor was 4700m3, a year-on-year increase of + 67.86%. It is expected that the volume of the reactor will reach 6862m3 by the end of 2022, a year-on-year increase of + 46.00%. The company’s capacity construction speed is accelerated, and the delivery of large orders on time is guaranteed.
Emerging business: blossom at multiple points and open up the growth space of the company. In 2021, the company’s emerging business achieved a revenue of 398 million yuan, a year-on-year increase of + 67.43%, the proportion of revenue increased by 1.03pct to 8.57% year-on-year, and the gross profit margin decreased by 2.05pct to 39.58% year-on-year; There were 327 emerging service projects, with a year-on-year increase of + 142.22%. In terms of further business segmentation, the revenue of chemical macromolecule business was + 42.48% year-on-year, 14 new customers were developed, 23 new projects were undertaken, and a total of more than 20 projects were promoted to phase II. The revenue of preparation business was + 80.33% year-on-year. More than 40% of the orders came from foreign customers such as the United States and South Korea, and 40 API + Preparation projects were undertaken. The revenue of clinical research services was + 83.71% year-on-year, with more than 150 new projects, including more than 70 innovative drug projects and nearly 30 cell therapy drug projects; There are more than 60 projects in the fields of cancer, immunity, anti infection and infection, including phase II and III major clinical projects. By the end of March 2022, the company’s orders for clinical research and on-site management services had exceeded 300 million yuan. During the reporting period, the company’s biological macromolecular cdmo business added a number of projects, including antibody, adcind project, filling and process development of biological products and characterization and analysis types of target products. By the end of March 2022, the company’s orders for biological macromolecular cdmo had reached 130 million yuan. In addition, on March 26, 2022, the company announced that it planned to sign the investment agreement with highland venture capital, Haihe Asymchem Laboratories (Tianjin) Co.Ltd(002821) fund and other enterprises, and agreed to increase the total capital of Shanghai Asymchem Laboratories (Tianjin) Co.Ltd(002821) biology by stages by no more than about 2.534 billion yuan, so as to further accelerate the development of cdmo business of biological medicine and advanced therapy.
There are sufficient orders on hand, and the performance is expected to maintain rapid growth in 2022. On March 14, the company released the main business data from January to February 2022. From January to February 2022, the company’s revenue was + 130% year-on-year. It is expected that the revenue scale of 2022q1 will exceed 2 billion yuan, with a year-on-year increase of + 150.00%. By the end of March 2022, the company’s total orders on hand were US $1.898 billion, a year-on-year increase of + 320.00%. In the short term, the company has sufficient orders on hand. With the accelerated release of new production capacity, the performance will achieve rapid growth in 2022. In the long run, driven by growth engines such as early project transformation, Chinese market, overseas biotech and emerging business, the company’s performance is still expected to achieve stable growth.
Profit forecast and investment suggestions: from 2022 to 2024, the company is expected to realize the parent company profit of 2.533/27.06/2.978 billion yuan, EPS of 9.58/10.24/11.27 yuan respectively, and the PE corresponding to the current stock price is 38.30/35.86/32.58 times respectively. Comprehensively considering the company’s historical valuation, performance growth and peer company valuation, the company is given 40-45 times PE in 2022, and the corresponding target price is 383.20-431.10 yuan / share, maintaining the company’s “recommended” rating.
Risk tips: covid-19 epidemic risk, industry policy risk, exchange rate change risk, order growth less than expected risk, brain drain risk, Sino US trade friction risk, etc.
