\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 41 Chengdu Kanghua Biological Products Co.Ltd(300841) )
Event: on the evening of April 21, the company released the annual report of 2021 and the first quarterly report of 2022. 1) in 2021, the company realized an operating revenue of 1.292 billion yuan, a year-on-year increase of 24.44%; The net profit attributable to the parent company was 829 million yuan, a year-on-year increase of 103.28%; The non net profit deducted was 555 million yuan, a year-on-year increase of 37.80%. 2) In the first quarter of 2022, the company realized an operating revenue of 267 million yuan, a year-on-year increase of 12.48%; The net profit attributable to the parent company was 135 million yuan, a year-on-year increase of 34.60%; The non net profit deducted was 124 million yuan, a year-on-year increase of 24.60%.
The performance in 21 years was in line with expectations, Q4 production capacity was released, and the quantity and price of exclusive diploid crazy seedlings increased simultaneously. The company’s annual performance is in line with expectations, and the profit falls near the median value previously predicted. Among them, the operating revenue in the fourth quarter was 504 million yuan, a year-on-year increase of 135.86% and a month on month increase of 120.72%; The net profit attributable to the parent company was 246 million yuan, with a significant year-on-year increase of 282.29%. At the end of May 2021, the company announced that the technical transformation of the second workshop of viral vaccine was completed, and the production capacity of the company’s core variety human diploid crazy vaccine was expanded from 3 million to 5 million. In the fourth quarter, the production capacity was released and the price was increased, driving the high growth of performance. In 2021, 4.795 million human diploid wild seedlings were issued in batches (year-on-year + 29.47%). Referring to the issuance of batches, market and income, we expect the company to recognize about 4.2-4.3 million human diploid wild seedlings and contribute about 1.26 billion yuan in revenue throughout the year.
The epidemic situation of Q1 in 22 affected the rhythm of large-scale production, and it is optimistic that it will maintain rapid growth throughout the year. In 2022, the rhythm of diploid crazy seedlings of Q1 company was affected by the epidemic. We calculated that the revenue confirmed in the first quarter was about 900000. It is expected that with the warmer weather in the second quarter, the demand for crazy seedlings vaccination increased, and it is expected to achieve rapid growth in the whole year. We are still optimistic that with the gradual release of new production capacity, human diploid crazy seedlings will continue to increase rapidly. In the long run, we expect that from 2024 to 2026, the company’s total production capacity of diploid crazy seedlings is expected to reach 11 million pieces / year, the company’s peak revenue is expected to reach 3-3.3 billion yuan, and the profit is expected to reach 1.35-1.5 billion yuan.
Under the scale effect, the cost rate has decreased, and the R & D investment has continued to increase. By the end of 2021, the company has covered 1956 centers for Disease Control and prevention, and the market coverage has been continuously improved. In 2021, the sales expense was 412 million yuan (year-on-year + 11.06%), accounting for 31.88% of the revenue, with a year-on-year decrease of 3.84pp. We expect that the decrease in the expense rate level is mainly caused by the scale effect of the company. In 2021, the R & D cost was 78.88 million yuan, with a year-on-year increase of 35.42%, and the cost rate was 6.10%, with a year-on-year increase of 0.49pp. In recent years, on the premise of rapid income growth, the R & D investment of the company has accelerated, and the R & D expense rate has increased year by year. Following the R & D strategy of “product upgrading” and “filling the gap in China”, the company has continuously carried out product innovation and new process innovation. At the same time, it has actively used external R & D resources to carry out exchanges and cooperation. In the research of rotavirus vaccine and norovirus vaccine, the follow-up pipeline is expected to be gradually enriched.
Entering the field of pet crazy seedlings is expected to cultivate new performance growth points. In September 2021, the company arranged the pet rabies vaccine market and acted as the agent of Hangzhou Youben’s omni-channel distributor in Greater China. Hangzhou Youben’s pet rabies vaccine has been delivered in the first batch in late January. At present, it has covered more than 2000 pet hospitals. It is expected to sell in large quantities since 22 years, bringing new performance growth points.
Profit forecast and investment suggestions: considering the gradual release of the company’s diploid crazy seedling production capacity, stable terminal demand and expected to maintain stable and rapid volume, and referring to the company’s equity incentive objectives, we adjusted the profit forecast. It is estimated that the company’s operating revenue will be RMB 1.892 billion, 2.799 billion and 3.406 billion from 2022 to 2024, with a year-on-year increase of 46%, 48% and 22%; The net profit attributable to the parent company was 852, 1258 and 1523 million yuan (855 and 1252 million yuan before adjustment in 202223), with a year-on-year increase of 3%, 48% and 21%. The company is the leader of the Chinese diploid crazy seedling market segment. Benefiting from the release of production capacity, the company will maintain rapid growth, strong long-term growth and “buy” rating in the next five years.
Risk tips: the competitive risk of human diploid cell rabies vaccine on the market and Vero cell rabies vaccine, the competitive risk caused by the relatively single product structure, the risk that the market space of human diploid rabies vaccine is less than expected, the risk of adverse reaction events of vaccine, and the risk of policy and supervision.
