\u3000\u3 Guocheng Mining Co.Ltd(000688) 131 Shanghai Haoyuan Chemexpress Co.Ltd(688131) )
The annual report showed brilliant performance, with rapid growth in revenue and profit
The company released the annual report of 2021. The annual revenue was 969 million yuan, with a year-on-year increase of + 52.61%, and the net profit attributable to the parent was 191 million yuan, with a year-on-year increase of + 48.7%. The net profit attributable to the parent after deduction was 177 million yuan, with a year-on-year increase of + 49.41%. Both the income side and the profit side achieved rapid growth.
The gross profit margin of the company in 21 years was -2.56 PP year-on-year, mainly due to ① the impact of exchange rate changes; ② The increase in the number of early projects in the back-end business increases the cost proportion. The company increased investment in R & D and personnel, with a year-on-year expense rate of + 0.59 PP and a year-on-year net interest rate of -0.56 pp. it is expected that with the investment and operation of R & D and personnel in the early stage, the expense rate is expected to be optimized and the net interest rate is expected to increase.
The front and rear businesses went hand in hand, and the revenue of innovative drugs continued to increase
The front-end business income was 545 million yuan, a year-on-year increase of + 58%, achieving sustained high growth; The cumulative number of molecular blocks and tool compounds exceeds 58600 (about 42000 molecular blocks and 16000 tool compounds). In 2021, the scientific research customers using Haoyuan products published more than 18000 scientific research documents. With the improvement of product categories and popularity, the company’s front-end business is expected to continue to grow rapidly.
The back-end business revenue was 417 million yuan, a year-on-year increase of + 46%. The company implemented the dual wheel drive of characteristic generic cdmo and innovative drug cdmo, and the cdmo innovative drug business continued to rise. The company carried out the development and research of ADC drugs earlier in China: in 2021, there were more than 340 cooperative customers, with a year-on-year increase of 332.50%; Sales revenue increased year-on-year; The number of projects was 80, with a year-on-year increase of 321.45%. With the company’s 247.83% continuous increase in R & D investment and the continuous promotion of customer project research, the R & D stage of each cdmo project will gradually extend downstream, and cdmo revenue is expected to continue to grow rapidly.
The construction of production capacity has been continuously promoted, and the back-end business is expected to accelerate
The company continues to promote the construction of R & D and production base: in 21 years, the R & D office area has increased to more than 60000 square meters, including 32000 square meters in Shanghai; Ma’anshan industrialization base phase I project is designed to have an annual production capacity of more than 680 cubic meters. It is planned to build five production workshops, which are shared by difficult to imitate drugs and cdmo business. It is expected that the project will be gradually completed and put into operation in the second half of 2022; An ADC high activity production line of Anhui Haoyuan R & D center has been completed and put into operation in 2021. The drug production license was obtained in July, and two new production lines will be released in 2022. After the company’s own API and intermediate production base meeting GMP standards is put into operation, the back-end business is expected to accelerate its development.
We are optimistic about the future development of the company and maintain the “buy” rating of RMB yuan. The year-on-year performance of the company is in line with expectations. We expect the company to + 39.6% / 40.9% / 34.9%, the net profit to be RMB 280 / 4.3/590 million respectively, with a year-on-year + 48.3% / 53.3% / 36.1% respectively, and the corresponding PE to be 36 / 23 / 17 times respectively. Optimistic about the sustainable development of the front and rear end of the company and maintain the “buy” rating.
Risk tips
Covid-19 epidemic affects production and sales, and the sales of some products are less than expected due to the progress of customers’ projects, exchange losses, patent infringement and the loss of high-quality professional and technical talents.
