\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
The company issued the announcement of pre increase of performance in the first quarter of 2022. It is estimated that the operating revenue in the first quarter of 2022 will be about 8.47 billion yuan, with a year-on-year increase of about 71.2%; The net profit attributable to the parent company was about 1.64 billion yuan, a year-on-year increase of about 9.54%; The net profit after non deduction from the parent company was about 1.71 billion yuan, with a year-on-year increase of about 106.5%; After adjustment, the net profit attributable to the parent company of non IFRS was about 2.05 billion yuan, with a year-on-year increase of about 85.8%.
Revenue growth exceeded expectations, and the impact of the epidemic was actively responded to. 1) The revenue of 2022q1 increased by about 71.2% year-on-year (if the influence of exchange rate is deducted, the revenue of 2022q1 is expected to increase by about 78.5% year-on-year) and 32.7% month on month, continuing the quarter on quarter growth trend. It is expected that the main business, especially the chemical sector, will grow strongly under the strong demand for orders. 2) During the reporting period, under the influence of the continuous and repeated epidemic, the company timely launched the business continuity plan to ensure the continuous and stable production and operation, so as to meet the timely delivery of customer orders. We believe that the company is a comprehensive service leader integrating the whole industrial chain, has the R & D and production capacity in many places, has the full response ability to the impact of the repeated local epidemic, and is confident in the recently announced goal of a year-on-year increase of 65-70% in revenue in 2022.
After adjustment, the profit increased rapidly and the profitability continued to improve. 1) The net profit attributable to the parent company in 2022q1 increased by about 9.54% year-on-year, which is mainly affected by the changes in fair value and investment income of the company’s investment objects. The net loss in 2022q1 is expected to be about 179 million yuan, a decrease of about 1.24 billion yuan compared with the total profit of the company in the same period last year. 2) From the adjusted profit side, which can better reflect the company’s business performance and business trend, it still maintains a rapid growth trend and is higher than the revenue growth. In 2022q1, the adjusted non IFRS net profit attributable to the parent company increased by about 85.8% year-on-year. It is expected that the capacity utilization rate will continue to increase under the continuous optimization of the company’s operating efficiency, the scale effect will be further reflected, and the profitability will continue to improve.
The chemical business has ushered in an explosion, and the high growth in 2022 is worth looking forward to. According to the recent announcement, the company expects that the revenue growth of the chemical business segment in 2022 will nearly double that of 2021, the revenue growth of the testing business and biology business in 2022 will continue the rapid growth momentum in recent years, wuxiatu will accelerate its development in 2022, and the revenue growth is expected to exceed the industry growth. Wuxiddsu will be upgraded iteratively in 2022 to meet customers’ higher requirements for new drug R & D services in China. We expect to continue to build “integrated, end-to-end” crdmo business after the integration of chemical business, enter the explosive growth period under the strong order demand, and drive the company to achieve high growth together with other businesses in 2022.
Profit forecast and rating: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 8.36 billion yuan, 10.55 billion yuan and 13.83 billion yuan respectively, with a year-on-year increase of 64.1%, 26.1% and 31.0%; The corresponding PE is 37x, 29x and 22x respectively. We are optimistic that the company, as the leader of new drug R & D and production outsourcing services, will continue to grow and maintain the “buy” rating.
Risk tips: the epidemic affects the operational risk, the risk that the order execution is less than expected, the risk of declining demand for pharmaceutical research and development, the risk of aggravating international trade disputes, and the risk of exchange rate changes.
