\u3000\u3 Shengda Resources Co.Ltd(000603) 456 Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a total operating revenue of 4.063 billion yuan, a year-on-year increase of 53.48%; The net profit attributable to the parent company was 634 million yuan, a year-on-year increase of 66.56%; The non net profit deducted was 573 million yuan, a year-on-year increase of 77.86%. In the first quarter of 2022, the company achieved total operating revenue and net profit attributable to the parent company of 1.374 billion yuan and 208 million yuan respectively, with a year-on-year increase of 60.46% and 120.13% respectively; The non net profit deducted was 196 million yuan, a year-on-year increase of 102.28%.
Comments:
The rapid growth of performance is mainly due to the strong growth of cdmo business. In 2021, the company’s cdmo business achieved a revenue of 2.311 billion yuan, a year-on-year increase of 78.67%, accounting for 56.9%. Cdmo project pipeline is increasingly abundant. By the end of 2021, among the projects undertaken by the company, 20 have been listed, 49 are in phase III clinical projects, and 582 are in phase I and II clinical trials. The projects cover the treatment fields of anti-tumor, anti heart failure, anti-virus, central nervous system, cardio cerebrovascular and so on. The company continued to expand its customers and product pipelines, further improved its R & D and product delivery capabilities, and steadily increased its project revenue in the commercialization stage, boosting the company’s cdmo business to maintain strong growth in 2022.
The business of specialty APIs and intermediates maintained steady growth. In 2021, the company’s characteristic API and intermediate business achieved a revenue of 1.31 billion yuan, a year-on-year increase of 16%; Among them, anti infective drugs, central nervous drugs, hypoglycemic drugs and non steroidal anti-inflammatory drugs achieved revenue of 451 million yuan, 387 million yuan, 260 million yuan and 212 million yuan respectively, with year-on-year growth of 20.14%, 0.29%, 57.69% and 5.81% respectively.
The gross profit margin decreased in 2021 and rebounded in the first quarter of 2022. In 2021, the company’s gross profit margin was 33.33%, a year-on-year decrease of 4.18 percentage points, of which the gross profit margin of cdmo business was 38.58%, a year-on-year decrease of 2.76 percentage points; The gross profit margin of anti infective drugs, central nervous drugs and non steroidal anti-inflammatory drugs decreased by 13.6 percentage points, 2.51 percentage points and 2.24 percentage points respectively year-on-year, and the gross profit margin of hypoglycemic drugs increased by 2.53 percentage points year-on-year; The net interest rate benefited from the decline in the management fee rate and increased by 1.26 percentage points year-on-year to 15.61%. In the first quarter of 2022, the gross profit margin increased by 4.11 percentage points year-on-year; The net profit margin benefited from the increase of gross profit margin and the decrease of expense rate, with a year-on-year increase of 4.04 percentage points to 15.1%.
Continue to increase R & D investment. In 2021, the R & D investment of the company was 188 million yuan, accounting for 4.64% of the operating revenue, and there were 788 pharmaceutical R & D personnel. By the end of 2021, the company had obtained 186 international and Chinese patents, including 12 patents authorized in 2021, including 10 authorized in China and 2 authorized in Japan.
Investment suggestion: the cdmo business of the company is expected to maintain strong growth, and the characteristic API and intermediate business is expected to maintain steady growth. It is estimated that the company’s earnings per share from 2022 to 2023 will be 1.11 yuan and 1.45 yuan respectively, and the current share price corresponding to PE will be 42 times and 32 times respectively, maintaining the “recommended” rating of the company.
Risk of loss of core capacity, sharp increase of exchange rate fluctuation, etc.
