\u3000\u3 Guocheng Mining Co.Ltd(000688) 621 Beijing Sun-Novo Pharmaceutical Research Co.Ltd(688621) )
Main points:
Deep cultivation of generic drug cro, with strong growth in its main business
The company is one of the first cro companies in China to provide drug R & D services. The company's main business covers comprehensive R & D services in generic drug development, consistency evaluation and innovative drug development, and has established a comprehensive drug R & D service mode of "pharmaceutical research + clinical trial + bioanalysis". The company's revenue side and profit side grew rapidly: the integrated comprehensive R & D service model had obvious synergy and further expanded its business scale. In 2021, the company achieved an operating revenue of 494 million yuan, a year-on-year increase of 42.12%; The net profit attributable to the parent company was 106 million yuan, a year-on-year increase of 45.81%; Among them, the revenue from pharmaceutical research and service was 279 million yuan, a year-on-year increase of 35.98%; The revenue from clinical trial services and biological analysis services was 214 million yuan, a year-on-year increase of 50.95%, with a good development momentum. The company's profit margin showed a continuous upward trend: from 2019 to 2021, the company's sales gross profit margin was 45.89%, 49.61% and 53.41% respectively; The net profit margin of sales is 20.53%, 21.35% and 22.04%. With the increase of projects implemented by the company, the scale effect makes the cost increase less than the income increase, and the profit margin increases.
New orders continued to grow at a high rate, highlighting the performance potential
The synergy effect of the business model is obvious, the customer stickiness is enhanced, and the order scale of the company's various businesses is growing rapidly. In 2021, the company accumulated 1.568 billion yuan of stock orders and 929 million yuan of new orders, with a year-on-year increase of 76.42%. The continuous high growth of customer demand provides sufficient guarantee for performance growth. The company has successively provided drug R & D services to more than 500 customers in China, with 136 new customers in 2021. Due to certain differences in the execution cycle of various orders, there is a certain lag effect in the conversion of orders into revenue. Sufficient orders on hand lay the foundation for long-term growth.
The overweight innovative drug cro has abundant pipeline under research and provides new growth momentum
The company was founded in 2018. Starting from drug discovery in the initial stage of innovative drug research and development, the company focuses on innovative drug research and pilot production services in the direction of peptides and small nucleic acids. The company continued to increase R & D investment in independent innovative drugs, improved new drugs and characteristic generic drugs: in 2021, the company invested 48 million yuan in R & D, with a year-on-year increase of 39.15%, accounting for 9.64% of revenue. By the end of 2021, the total number of projects under research within the company has exceeded 150, including 18 innovative drugs: 8 peptide and peptide like innovative drugs and 10 improved new drugs. In terms of innovative drugs, the company's products under research are mainly used in the fields of analgesia, nephropathy and dialysis, tumor assistance, cardio cerebrovascular, antibacterial drugs and other indications; These products have certain technical barriers and are clinically necessary and in short supply. They have good market prospects and are easier to recommend to customers, which is conducive to driving the growth of the company's performance.
Investment advice
We expect the company's revenue from 2022 to 2024 to be RMB 688 million, RMB 933 million and RMB 1234 million respectively; The year-on-year growth rate was 39.4% / 35.6% / 32.3%; The net profit attributable to the parent company is 153 / 215 / 295 million yuan respectively; The year-on-year growth rate of net profit was 44.8% / 40.7% / 36.9%; The corresponding EPS from 2022 to 2024 is 1.91/2.69/3.68 yuan / share; The corresponding PE is 51x / 36x / 26x. Considering the company's rich experience in the field of generic drugs, it has formed the advantages of "pharmaceutical research + clinical trial + bioanalysis" comprehensive drug R & D services, and gradually increased its investment in the innovative drug cro sector. With the layout of the company in the innovative drug platform, it is expected that the service orders related to innovative drugs will increase significantly in the future, with strong growth potential. We cover for the first time and give a "buy" rating.
Risk tips
Policy risk; The risk of drug research and development falling short of expectations; Risk of order execution falling short of expectations; Fluctuation risk of gross profit margin; Industry competition intensifies risks.
