\u3000\u3 Shengda Resources Co.Ltd(000603) 456 Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) )
Event: on April 19, 2022, the company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company realized a revenue of 4.063 billion yuan and a net profit attributable to the parent company of 634 million yuan, with a year-on-year increase of 53.48% and 66.56% respectively; In 2022q1, the company achieved revenue and net profit attributable to parent company of 1.374 billion yuan and 208 million yuan respectively, with year-on-year growth of 60.46% and 120.13% respectively, and the performance growth exceeded expectations.
Cdmo business grew strongly, with 2022q1 performance exceeding expectations:
On the sales side, in 2021 and 2022q1, the company achieved revenue of RMB 4.063 billion and RMB 1.374 billion respectively, with a year-on-year increase of 53.48% and 60.46% respectively. Among them, in 2021, contract customized products, anti infective drugs, central nervous system drugs and hypoglycemic drugs achieved revenue of 2.311 billion yuan (+ 78.67%), 451 million yuan (+ 20.14%), 387 million yuan (+ 0.29%), 212 million yuan (+ 5.81%) and 260 million yuan (+ 57.69%) respectively.
On the profit side, in 2021 and 2022q1, the company realized a net profit attributable to the parent company of 634 million yuan and 208 million yuan respectively, with a year-on-year increase of 66.56% and 120.13% respectively. The higher than expected growth of 2022q1 performance is mainly due to the rapid growth of cdmo commercialization projects and new business orders.
The pipeline funnel effect of the project is obvious, which is expected to boost the rapid growth of the company’s cdmo business: the company’s cdmo pipelines are increasingly abundant, and the projects fully cover the fields of anti-tumor, anti heart failure, anti-virus, central nervous system, cardio cerebrovascular and so on. According to the company’s announcement, by the end of 2021, there were 20, 49 and 582 listed projects, phase III clinical projects and phase i/ii clinical projects respectively, and the funnel effect of cdmo pipeline was obvious. Compared with 2020, the number of cdmo projects increased by 31.78% year-on-year in 2021, which is expected to boost the rapid growth of the company’s cdmo business.
Rapid progress in capacity construction to effectively meet the growing demand for orders: in order to fully meet the demand for cdmo orders, the company accelerates capacity construction through “internal new construction + external M & a”. At present, it has R & D / production bases in Taizhou, Suzhou, Yancheng, Hangzhou, North America, etc. In terms of internal new construction, according to the announcement of investor relations activities, Ruibo Suzhou has started the pilot workshop and started to build two commercial workshops in 2022; Ruibo Taizhou is expected to build four workshops in 2023 and put into use in early 2024; In terms of external mergers and acquisitions, according to the company’s announcement, the company acquired 100% equity of Taihua Hangzhou subordinate to Teva, which is conducive to the rapid expansion of the company’s production capacity and the further deepening of Teva’s cooperative relationship.
Investment suggestions: we predict that the company will realize net profits of RMB 884million, RMB 1161 million and RMB 1527million respectively from 2022 to 2024, with year-on-year growth of 39.4%, 31.4% and 31.6% respectively; Give an investment rating of buy-a.
Risk tips: the order growth is less than expected, the order price of API decreases, the risk of production safety accidents, and the risk of business expansion is less than expected
