\u3000\u3 China Vanke Co.Ltd(000002) 821 Asymchem Laboratories (Tianjin) Co.Ltd(002821) )
Event overview
The company announced that the first quarterly report of 2022: the operating revenue was 2.062 billion yuan, a year-on-year increase of 165.28%; The net profit attributable to the parent company was 499 million yuan, a year-on-year increase of 223.59%; The net profit of non deduction was 486 million yuan, a year-on-year increase of 275.76%.
Analysis and judgment:
The performance growth is in line with market expectations, and the two round strategy of “small molecule + emerging business” continues to be promoted
The company achieved an operating revenue of RMB 2.062 billion in Q1 of 2022, with a year-on-year increase of 165.28%. The performance growth is in line with market expectations and continues the trend of rapid growth. Benefiting from the continuous promotion of the company’s two round strategy of “small molecule + emerging business”, the operating revenue of the company’s small molecule business in 2022q1 increased by 165.9% year-on-year, and the operating revenue of emerging businesses (chemical macromolecules, biological macromolecules, preparations, clinical cro, etc.) increased by 157.4% year-on-year, driving the continuous high-speed growth of the company’s overall performance. Looking forward to the future, the two round strategy of “small molecule + emerging business” continues to be promoted, and the breadth and depth of new production capacity, customer coverage and pipelines continue to improve. We judge that the company will continue to show rapid growth in the next few years.
(1) continued high-speed cashing of small molecule business: in 2022q1, the operating revenue of small molecule business increased by 165.9% year-on-year. We judge that we benefited from the high-speed cashing of large orders and the continuous deepening of other customers and businesses. Considering that the scale of large orders in hand at the beginning of 22 exceeded 8 billion yuan, continued to cultivate large customers and long tail customers, and the accelerated release of superimposed small molecule production capacity (Note: the small molecule production capacity will be 5000 cubic meters by the end of March 2022 and is expected to reach 6700 cubic meters by the end of 2022), we judge that the small molecule business will continue the high-speed growth trend of 2022q1 in 2022.
(2) emerging business has gradually become the core driving force of the company’s performance: the operating revenue of the company’s emerging business has increased by 157.4% year-on-year, including the revenue growth of chemical macromolecules, biological macromolecules, preparations and clinical cro of more than 100%. Looking forward to the future, with the continuous deepening of the company’s new business layout, the company’s new business will continue to show ultra-high growth and gradually contribute to the driving force of core performance.
The profitability showed an upward trend, and the expense rate decreased slightly due to the scale effect
(1) the profitability showed an upward trend: the gross profit margin and net profit margin in 2022q1 were 45.24% and 24.22% respectively, with a year-on-year increase of 2.37pct and 4.36pct. We judged that we benefited from the high profitability of relevant large orders and the improvement of profitability under the effect of scale.
(2) the expense rate decreased slightly due to the scale effect: the company’s 2022q1 sales expense rate was 1.00%, down 1.46 PCT year-on-year, the management expense rate was 7.91%, down 4.78 PCT year-on-year, the R & D expense rate was 6.35%, down 4.39 PCT year-on-year. We judged that it was mainly affected by the scale effect such as the rapid growth of revenue driven by relevant large orders.
Performance forecast and investment suggestions
As China’s leading supplier of small molecule cdmo, the company looks forward to the future and continues to cultivate the integrated service capacity of small molecule “intermediate + API + Preparation”. In addition, the company continues to strengthen the layout in the field of synthetic macromolecules and biological macromolecules, so as to escort the medium and long-term performance growth of the company. Maintain the early profit forecast, that is, the operating revenue in 22-24 years is RMB 12.593126.77/13.084 billion, EPS is RMB 11.30/11.60/11.77, corresponding to the closing price of RMB 292.50/share on April 20, 2022, and PE is 25.89/25.22/24.85 times respectively, maintaining the “buy” rating.
Risk tips
The core technology backbone and management risk of loss, the risk of intensified competition, the loss of core technical personnel, the risk of exchange rate fluctuations, the expansion of New Coronavirus’s epidemic affecting China’s external business, the lower than expected implementation of COVID-19 orders, and the uncertainty of Shanghai’s Asymchem Laboratories (Tianjin) Co.Ltd(002821) biological capital increase.
