\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Events
On April 10, Wuxi Apptec Co.Ltd(603259) released the announcement of pre increase in the first quarter of 2022. In the first quarter of 2022, the company is expected to achieve a revenue of 8.5 billion yuan, an increase of 71% year-on-year; It is estimated that the net profit attributable to the parent company after deducting non profits will reach 1.7 billion yuan, with a year-on-year increase of 107%; Both revenue and profit side achieved higher than expected growth.
Brief comment
Q1 performance exceeded expectations, with high growth in revenue and profit. According to the company’s pre increase announcement for the first quarter of 2022, the company expects to achieve a revenue of 8.5 billion yuan in the first quarter of 2022, with a year-on-year increase of 71%, exceeding the previously announced growth guideline of 65% – 68% of Q1 revenue. If the impact of exchange rate is excluded, the revenue will increase by 78% year-on-year; It is estimated that the net profit attributable to the parent company after deducting non profits will reach 1.7 billion yuan, with a year-on-year increase of 107%; It is estimated that the adjusted non IFRS net profit attributable to the parent company is RMB 2.1 billion, with a year-on-year increase of 86%, and the revenue and profit sides have achieved higher than expected growth.
The epidemic situation in Shanghai has little impact on production and operation, and maintains the original high growth expectation. At the beginning of the development of the epidemic, the company launched the “business continuity plan” at the first time, arranged employees to stay closed and prepare corresponding materials and logistics support, so as to ensure the continuous progress of production and operation. At present, the home isolation employees have arranged compensatory leave, and it is expected that the order execution progress will be made up in the future, so as to ensure the delivery of the order. In addition, the company actively coordinates logistics through various channels. At present, the supply and delivery of raw materials are normal. We believe that the recent epidemic in Shanghai has little impact on the company’s production and operation, and maintain the previous high growth expectations for the company in 2022 and Q2.
High prosperity of the industry + full orders on hand and full driving force for future development. There is a strong demand for pharmaceutical R & D and innovation at home and abroad. Wuxi Apptec Co.Ltd(603259) as a platform leading enterprise in the CXO sector with international competitiveness, it has a unique integrated crdmo business model, full new and on-hand orders and strong growth certainty. Focus on the medium and long-term high growth potential of the company’s small molecule cdmo (especially the preparation, oligo and peptide business), preclinical cro and CGT cdmo.
Profit forecast and investment suggestions
We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 8.019/93.41/11.811 billion, corresponding to 39 / 33 / 26 times of PE respectively, maintaining the “buy” rating.
Risk tips
Covid-19 epidemic aggravation risk, order execution less than expected risk, overseas supervision risk, ban lifting risk, core technical personnel loss risk, IP protection risk, investment risk, exchange rate fluctuation risk, raw material price rise
Safety, production and environmental risks.
