\u3000\u3 Shengda Resources Co.Ltd(000603) 456 Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) )
Event: the company released the annual report of 2021, and achieved a revenue of 4.063 billion yuan (+ 53.48%, the year-on-year growth rate in brackets, the same below); The net profit attributable to the parent company was 634 million yuan (+ 66.56%); Deduct the net profit not attributable to the parent company of 573 million yuan (+ 77.86%); Operating cash flow was 678 million yuan (+ 69.21%). The company also announced the first quarter report of 2022. In 2022q1, the revenue was 1.374 billion yuan (+ 60.46%), and the net profit attributable to the parent company was 208 million yuan (+ 120.13%).
Cdmo business maintained a strong momentum and the business structure continued to be optimized: from the perspective of business, the company’s cdmo business achieved a revenue of 2.311 billion yuan (+ 78.7%) in 2021, with strong performance momentum and full orders. In 2021, the company undertook 582 cdmo projects (+ 32.9%), including 49 phase III and 20 listed projects (+ 22.5%) and (+ 25.0%) respectively. The project structure continued to be optimized, and the funnel effect initially appeared, with obvious diversion effect; In 2021, one NDA new drug project promoted by the company passed the on-site verification of nmpa API, and one NDA project was approved for listing. The revenue of API business was 1.31 billion yuan (+ 16.27%), maintaining a stable growth.
Capacity is one of the core of cdmo enterprises at this stage, and the pace of capacity release of the company is excellent: in 2021, the company will accelerate capacity construction through the mode of built-in + M & A: 1) build a new Taizhou Borui new base; 2) Reconstruction of Suzhou Borui workshop; 3) Acquire Teva Hangzhou factory, expand production capacity and deeply bind high-quality customers. The pharmaceutical production capacity invested by raising funds has basically completed the construction of 4D medicine, and the production capacity will be put into operation soon.
Attach importance to R & D capacity-building and accelerate the promotion of new capabilities such as preparations: the company invested 188 million yuan (+ 65.01%) in R & D in 2021, including 101 million (+ 37.74%) in cdmo and 36 million in preparation R & D respectively, so as to continuously strengthen the capabilities of corporate platforms such as continuity, enzyme catalysis, fluorine chemistry and preparations. Preparation is the key R & D field of the company. In 2021, the company acquired 100% equity of Hangzhou Zhulian and 51% equity of Nanjing kangchuanji to improve the ability of small molecule innovative drugs and strengthen the one-stop service ability of the whole process. With the existing research and development platform, 17 generic drug projects have been launched as of the annual report, among which the newly developed diabetes products related customers are listed on the EU. The preparation product aed-02 sustained release tablets shall be submitted to anda for approval and the application shall be submitted to nmpa; Preparation product t2dm-02 was approved by nmpa for marketing. In 2022, the company will also continue to promote capacity-building and project acquisition in new fields such as peptides.
Profit forecast and investment rating: the company benefited from the in-depth cooperation with Teva and the incremental space brought by Pfizer MPP. We raised the forecast of net profit attributable to parent company from 870 / 1154 million yuan to 907 / 1197 million yuan in 20222023. It is estimated that the net profit attributable to parent company in 2024 will be 1.563 billion yuan, the year-on-year growth rate in 20222024 will be 43%, 32% and 31% respectively, and the corresponding PE valuation in 20222024 will be 43x, 32x and 25X respectively. Considering the continuous breakthrough of the company’s cdmo business and large room for performance growth, the “buy” rating is maintained.
Risk tip: the increased competition leads to the decline of profitability, the insufficient volume of novozyme is less than expected, and the risk of exchange gain and loss.
