\u3000\u3 Guocheng Mining Co.Ltd(000688) 166 Brightgene Bio-Medical Technology Co.Ltd(688166) )
Financial performance: high net profit growth and improved profit margin
The company released its 2021 annual report, with a revenue of 1.05 billion yuan in 2021, a year-on-year increase of 34%; The net profit attributable to the parent company was 240 million yuan, a year-on-year increase of 43.6%; The net profit margin attributable to the parent company was 22.6%, with a year-on-year increase of 1PCT. In a single quarter, the revenue of 2021q4 was 300 million yuan, a year-on-year increase of 10.6%; The net profit attributable to the parent company was 70 million yuan, a year-on-year increase of 39.3%; The net profit margin is 22%. Increased by 4.7pct year-on-year. We believe that the company's revenue and profit performance in 2021 is in line with our expectations.
Growth capacity: the market share of advantageous varieties is increased, and the kinetic energy of new varieties is connected
Looking at the growth by sections: the growth of new varieties is connected, and the proportion of preparations is expected to increase gradually. In terms of revenue contribution, the product sales sector made the largest contribution to the revenue increment in 2021 (the revenue increment of this sector accounted for 91.5% of the total revenue increment), among which the revenue increment of antifungal and other products accounted for the highest proportion. Looking forward to the growth of the company from 2022 to 2024, we believe that: ① stock dominant varieties (three fenjing categories): the global market share is relatively high. Under the background of the expiration of patents in Europe, America and Japan, it is expected to maintain a high growth rate from 2021 to 2022, and the subsequent growth rate may slow down. 2. China's one belt, one road market, is expected to maintain a relatively high growth rate. ③ China's centralized procurement increment: oseltamivir oral preparation, fondaparinux sodium injection and micafungin injection will participate in the seventh batch of centralized procurement. We expect these varieties to contribute new revenue increment from the perspective of API and preparation, and the proportion of the company's preparation revenue is expected to further increase. ④ Technology transfer income: according to the company's annual report, "the company actively develops ADC drug technology service demand customers". We are optimistic about the company's promotion of ADC products and technology service business based on the advantages of technology platform. We pay attention to the progress of innovative drug clinical / milestone and its contribution to technology transfer income.
Profitability: increase of gross profit margin under scale effect
Gross profit margin: under the scale effect and structural adjustment, the gross profit margin is expected to increase. According to the company's annual report, the gross profit margin of foreign income decreased slightly in 2021. We speculate that it is mainly due to the drag of the decline in the sales volume of pimecrolimus API and intermediates and the decline in the proportion of equity share income with high gross profit margin; With the advantages of scale and process optimization, the gross profit margin of the company's main fenjing varieties has increased. In 2021, the gross profit margin of China's revenue increased, which we believe is due to the increase of the gross profit margin of entecavir and other varieties. Looking forward to 2022, we expect that the gross profit margin of fenjing varieties will remain stable, the gross profit margin of preparations will increase, and the proportion of equity sharing income with high gross profit margin will increase, driving the overall gross profit margin to increase.
Net interest rate: the expense rate has increased, and the net profit margin is expected to remain stable. In 2021, the company's sales expense ratio increased and the R & D expense ratio decreased slightly. We expect that the overall sales expense ratio of the company may increase with the increase of the proportion of preparation revenue in 2022; Under the issuance of convertible bonds, we expect the financial expense rate to increase; The R & D expense rate remained at a high level and increased slightly. On the whole, we expect the net profit margin to decline from 2022 to 2024 and remain basically stable.
Viewpoint: optimistic about the release of production capacity and the kinetic energy of high barrier varieties
Marginal change: increased investment in the early stage of capacity release, connection of new varieties, product registration & pipeline under research. In 2021, the company's construction in progress accounted for about 38.1% of its total assets and its capital expenditure was 910 million yuan, reaching the highest level since its listing; From the completion degree in the details of projects under construction, we expect that Taixing and Shandong plants are expected to be put into operation one after another, and the proportion of large-scale manufacturing revenue is expected to increase with the improvement of capacity utilization. With the approval of high barrier varieties such as inhaled agents and iron agents from 2023 to 2025, the growth momentum is expected to be connected.
Profit forecast and valuation
We expect that the company's EPS from 2022 to 2024 will be 0.73, 0.96 and 1.25 yuan / share respectively, and the closing price on April 15, 2022 corresponds to 29.5 times that of 2022. We believe that the company is gradually transitioning from relying on large quantities of niche APIs to parallel markets outside China and taking into account both large and small varieties. The company's investment in technology and production capacity in the field of highly difficult inhalation APIs and preparations is scarce. Under volume procurement, the performance elasticity of Chinese preparations and APIs is expected to exceed expectations and maintain the "overweight" rating.
Risk tips
Production safety accidents and quality risks; The sales of core preparation varieties are less than the expected risk; Risk of excessive investment in innovative drugs or project failure; Exchange rate fluctuation risk; Order delivery volatility risk
