Zhejiang Ausun Pharmaceutical Co.Ltd(603229)
Event: the company released the 2021 annual report and the first quarterly report of 2022. In 2021, the operating revenue was 570 million yuan, with a year-on-year increase of 39.21%, the net profit attributable to the parent was 146 million yuan, with a year-on-year increase of 68.04%, and the non net profit deducted was 133 million yuan, with a year-on-year increase of 56.02%; In the first quarter of 2022, the operating revenue was 205 million yuan, with a year-on-year increase of 42.45%. The net profit attributable to the parent company was 707226 million yuan, with a year-on-year increase of 61.18%, and the non net profit deducted was 708072 million yuan, with a year-on-year increase of 63.54%.
The performance exceeded expectations, and cro / cdmo led to sustained and rapid growth. The company’s revenue and profit have maintained rapid growth, of which the profit growth rate is greater than the revenue growth rate, mainly due to the reduction of the cost side. The total cost rate (including R & D) during 2021 and 2022q1 are 27.35% and 13.57% respectively, with a year-on-year decrease of 4.73% and 4.82% respectively. Quarter by quarter, the revenue of 2021q4 was 140 million yuan, a year-on-year increase of 30.40%; The net profit attributable to the parent company was 35.62 million yuan, a year-on-year increase of 72.49%; Deduct non net profit of 24.88 million yuan, a year-on-year increase of 9.56%. The company’s revenue and profit in 2022q1 reached a record high in a single quarter. We expect that the rapid growth of performance is mainly driven by the rapid development of cro / cdmo business and the rapid growth of sales of some mature API varieties. Among them, cro / cdmo business achieved an operating revenue of 277 million yuan in 2021, with a year-on-year increase of 88.15% and a revenue accounting for 48.65%. We expect that it is mainly driven by the rapid growth of sales of agn-h, la-05 and other varieties. The capacity construction of the company’s projects has been smoothly promoted, the capacity bottleneck will be gradually lifted, and the new capacity is expected to drive the company’s performance to maintain rapid growth.
Sub business: cro / cdmo is developing rapidly, API intermediates are growing steadily, and innovative drugs are advancing smoothly. 1) Cro / cdmo has developed rapidly, and the number of projects and customers has increased steadily. The total number of projects in progress in 2021 is 27 (7 API projects, 20 advanced intermediate projects, 21 clinical stages and 6 commercialization stages). 2) API intermediates are growing steadily, and a large number of mature varieties are imminent. We expect that the current rapid growth is mainly driven by the rapid growth of bicyclol, entecavir, febuxostat, posaconazole, nebirol and other varieties. The gradient configuration of the company’s API intermediate varieties is reasonable. Driven by new production capacity and varieties, we believe that the company’s API intermediate business is expected to maintain steady growth. 3) The innovative drug brozopine sodium phase II has completed the enrollment of patients, which has the potential of heavy bomb and is expected to bring new growth points in the long term.
Expense rate: the gross profit margin remained stable, the expense rate gradually decreased, and the R & D investment continued to increase. Gross profit margin: in 2021, the gross profit margin was 54.79% (+ 1.64pp, year-on-year change, the same below). Among them, the gross profit margins of liver diseases, antibiotics, nervous system and gout, which account for a large proportion of revenue, were 70.8% (+ 1.16pp), 46.7% (- 7.19pp), 48.8% (- 1.72pp) and 24.2% (- 0.59pp) respectively, which remained basically stable. We expect that the fluctuation of antibacterial gross profit margin is mainly due to the fluctuation of order volume; The gross profit margin of 2022q1 was 55.64% (+ 0.23%), which remained stable. Expense rate: in 2021, the sales expense rate was 1.26% (+ 0.54pp), the management expense rate was 13.01% (- 0.90pp), the financial expense rate was 1.01% (- 4.04pp), and the financial expense rate decreased by about 4pp year-on-year, mainly due to the decrease of exchange gains and losses caused by the change of US dollar exchange rate; The three expense rates of 2022q1 are 8.40% (+ 0.84%) in total, which remains basically stable. R & D expenses: in 2021, R & D expenses were 68.82 million yuan (+ 35.56%), accounting for 12.08% of revenue (- 0.33pp); In 2022q1, the R & D expense is 10.6 million yuan (- 32.05%), accounting for 5.17% (- 5.67pp) of the revenue. We expect that the decline in the revenue share is mainly due to the rapid growth of operating revenue.
Profit forecast and investment suggestions: according to the latest announcement, we adjusted the profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 808, 1094 and 1483 million yuan (781 and 1058 million yuan before the adjustment in 2022 and 2023), with a year-on-year increase of 41.85%, 35.33% and 35.56%; The net profit attributable to the parent company was 219 million yuan, 313 million yuan and 445 million yuan (203 million yuan and 293 million yuan before the adjustment in 2022 and 2023), with a year-on-year increase of 50.16%, 43.00% and 41.95%. The current share price corresponds to 96 / 67 / 47 times of PE from 2022 to 2024. Considering the rapid development of cro / cdmo of the company, the catalytic release of API intermediates with varieties and production capacity is expected to continue in large quantities. The business layout of generic drugs and innovative drugs will create new long-term growth points and maintain the “buy” rating.
Risk warning events: product R & D and technological innovation risks; International trade environment change risk; Environmental protection and safety production risks; Exchange rate fluctuation risk; There is a risk that the public information is delayed or not updated in time.
