\u3000\u3 Shengda Resources Co.Ltd(000603) 456 Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) )
Event overview
The company announced the 2021 annual report and the first quarterly report of 2022:
(1) annual report of 2021: in 2021, the operating revenue was 4.063 billion yuan, with 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 net profit of non deduction was 573 million yuan, a year-on-year increase of 77.86%.
(2) the first quarterly report of 2022: the first quarterly report of 2022 achieved an operating revenue of 1.374 billion yuan, a year-on-year increase of 60.46%; The net profit attributable to the parent company was 208 million yuan, a year-on-year increase of 120.13%; The non net profit deducted was 196 million yuan, a year-on-year increase of 102.28%.
Analysis and judgment:
The performance continues the trend of rapid growth, and the contribution of cdmo business is flexible
The company’s operating revenue in the first quarter of 2021 and 2022 was 4.063 billion yuan and 1.374 billion yuan respectively, with a year-on-year increase of 53.48% and 60.46% respectively. Among them, the operating revenue of cdmo business in 2021 was 2.311 billion yuan, with a year-on-year increase of 78.67%. The performance continued the trend of rapid growth in Q1 in 2021 and 2022, and cdmo business continued to contribute to performance elasticity. Looking forward to the future, the company will continue to expand the development of major customers such as Novartis, Roche, Geely, shuotang and a series of small customers at home and abroad, superimpose self construction and acquisition of Teva Hangzhou plant, and is expected to continue to achieve rapid growth in the next 3-5 years.
(1) cdmo business continues to contribute performance flexibility: the company continues to strengthen the development of customers in Chinese and global markets and realize the continuous optimization of pipeline structure, that is, 20 commercial projects, 49 phase III projects and 582 clinical phase I / II projects will be undertaken in 2021, which continues to show a rapid growth trend compared with 16 commercial projects, 40 phase III projects and 438 clinical phase I / II projects in 2020. The company’s cdmo business achieved an operating revenue of 2.311 billion yuan in 2021, with a year-on-year increase of 78.67%, accounting for 56.9% of the overall revenue, and accounting for more than 50% of the company’s revenue for the first time. Looking forward to the future, considering the company’s strategic binding with major customer Novartis and the continuous development of Chinese and foreign markets, we judge that the company’s cdmo business will continue to achieve the trend of rapid growth and continue to contribute to performance flexibility.
(2) the characteristic API business remained relatively stable: the company’s characteristic API business achieved an operating revenue of 1.31 billion yuan in 2021, with a year-on-year increase of 16.3%, of which anti infective drugs, central nervous drugs, non steroidal anti-inflammatory drugs and hypoglycemic drugs achieved an operating revenue of 4.51/3.87/2.12/260 million yuan respectively, with a year-on-year increase of 20.14% / 0.29% / 5.81% / 57.69% respectively. Looking forward to the future, the company’s hypoglycemic drugs, central nervous drugs and non steroidal anti-inflammatory drugs will continue to have new products on the market and continue to contribute to the performance increment of the characteristic API business.
The gross profit margin has declined due to the price rise of upstream raw materials and other factors. It is expected to stabilize or gradually recover in the future
In 2021, the company’s overall gross profit margin was 33.33%, down 4.18 PCT year-on-year, of which the gross profit margin of cdmo business was 38.58%, down 2.76% year-on-year, the gross profit margin of characteristic API business was 32.51%, down 5.51 PCT year-on-year, and the gross profit margin of other businesses (including foreign trade) was 8.29%, down 4.88 PCT year-on-year. The operating cost of the company’s overall production, sales and service of chemical APIs and intermediates increased by 89.28% year-on-year, significantly higher than the growth rate of 53.73% of operating revenue, and the operating cost of cdmo business increased by 114.37% year-on-year, which was also significantly higher than the growth rate of 78.67% at the revenue end. In addition, considering the gradual transmission of the terminal price of characteristic API business and cdmo business due to the price rise of upstream raw material projects and other factors, And Hedging under the scale effect, we judge that the overall gross profit margin is expected to stabilize or gradually recover in the future.
Performance forecast and investment suggestions
As a quasi first-line cdmo enterprise in strategic transformation, the company has accelerated the building of Ruibo cdmo brand and built a nest to attract Phoenix. In addition, the characteristic API business has maintained steady growth under the background of China’s stricter environmental protection policies. Considering that the performance of 22q1 increased beyond expectations, the previous performance expectations were slightly raised, that is, the revenue in 22-24 years was increased from RMB 5.289/68.09/na billion to RMB 5.431/71.64/92.67 billion respectively, and the EPS was increased from RMB 1.05/1.41/na to RMB 1.07/1.53/2.02, corresponding to the closing price of RMB 46.44/share on April 19, 2022, and the PE was 43.28/30.45/23.00 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, and the expansion of New Coronavirus’s epidemic affecting China’s external business.
