\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 63 Porton Pharma Solutions Ltd(300363) )
Key investment points
Strategic transformation has entered the fast lane and opened up the cdmo service platform for the whole life cycle of small molecular chemical drugs: in 2017, the company changed from the traditional "key customer +" strategy to "marketing transformation, product upgrading and development of process chemistry cro", realizing customer diversification. In terms of business structure, it has also formed the diversion of API cro to API CMO, foreign J-star business to China's R & D and production base, and actively developed preparation cdmo business, It has formed a full life cycle cdmo business chain from early clinical research and development, clinical stage production and commercial production. The company's revenue in 2021 was 3.105 billion yuan, a year-on-year increase of 49.87%, and the CAGR from 2017 to 2021 was 27.25%; The net profit attributable to the parent company was 524 million yuan, a year-on-year increase of 61.49%, and the CAGR from 2017 to 2021 was 48.60%.
The continuous expansion of the global cdmo industry and the transfer of production capacity to China jointly drive the growth of the industry: the high popularity of global drug research and development has brought opportunities to the cdmo industry. In 2020, the global cdmo market will be US $55.4 billion, while China's scale will be 31.7 billion yuan. The CAGR of China's cdmo market is expected to be more than 30% from 2021 to 2025; At the same time, because the cdmo industry has high-tech attributes and high demand for R & D technicians, the global cdmo industry has transferred from Europe and the United States to the Asia Pacific region with cost advantages, and Chinese cdmo enterprises have benefited significantly.
Cdmo business of chemical raw materials is advancing rapidly: the company has formed a cdmo service platform of raw materials in the whole industry chain, and realized the global layout of business through rapid integration and expansion of acquisition targets. Actively invest in R & D, strengthen the "d" end capacity, rapidly expand the capacity and personnel scale, and strengthen the "m" end capacity. In 2021, the cdmo of the main business chemical API increased by 52.5% year-on-year, and the business revenue was 3.069 billion yuan; At the same time, benefiting from the large orders of covid-19 small molecular chemical APIs, the company actively grasped the pace of capacity construction and delivery, adding weight to the continuous growth of follow-up business.
New business preparation cdmo is moving forward steadily: actively build an integrated high-value industrial chain of "API + API + Preparation". In 2021, the preparation cdmo business achieved a breakthrough of 0 and achieved a revenue of RMB 2016 million. The preparation cdmo platform was successively put into operation in 2021 and 2022, with the rapid improvement of order receiving capacity, and is expected to undertake the cdmo diversion business of API.
New business cell and gene therapy (CGT) cdmo embraces the future: cgtcdmo is still in the early stage of development and belongs to the blue ocean track. In 2021, the global and Chinese cgtcdmo market scale was US $2.9 billion and US $300 million respectively, and the CAGR from 2021 to 2025 was 36.61% and 54.29% respectively. The company laid out cgtcdmo. In 2021, the personnel scale expanded rapidly to 294 and received orders of RMB 130 million. Cgtcdmo is expected to become the main growth point of the company in the future.
Profit forecast and investment rating: the company is the target of China's excellent cdmo, and the industry has high boom development. We expect the company's revenue from 2022 to 2024 to be 7.315 billion yuan, 8.407 billion yuan and 10.35 billion yuan respectively; The net profit attributable to the parent company was 1.345 billion yuan, 1.452 billion yuan and 1.774 billion yuan respectively; The corresponding valuations of the current stock price are 34x, 32x and 26x respectively, and the "buy" rating is given for the first time.
Risk tip: environmental protection policy tightened; The cost transmission to the downstream is less than expected; The approval and volume of new products are less than expected; Cdmo business is less than expected; New business is not as expected; Exchange gain / loss risk.
