\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 41 Chengdu Kanghua Biological Products Co.Ltd(300841) )
Event:
1) the company released its 2021 annual report, realizing 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%; Deduct the net profit not attributable to the parent company of 555 million yuan, a year-on-year increase of + 37.80%; Operating net cash flow was 130 million yuan, a year-on-year increase of – 64.74%; EPS9. 22 yuan. The performance is in line with market expectations.
2) the company released the first quarterly report of 2022, realizing 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%; Deduct 124 million yuan of net profit not attributable to the parent company, a year-on-year increase of + 24.60%; Operating net cash flow was – 112 million yuan, with a negative value expanding; EPS1. 51 yuan. The performance is lower than the market expectation.
Comments:
The expansion of production capacity and the increase of batch issuance led to the recovery of Q4 sales, and the changes in the fair value of participating companies affected the current non economic:
From 2021q1 to Q4, the company’s operating revenue in a single quarter was RMB 237 / 323 / 228 / 504 million respectively, with a year-on-year increase of + 50.96% / + 8.54% / – 38.33% / + 135.86%; The net profit attributable to the parent company was RMB 100 / 152 / 331 / 246 million, with a year-on-year increase of 54.91% / 28.74% / 105.74% / 282.28%; Deduct the net profit not attributable to the parent company of RMB 99 / 144 / 100 / 212 million, a year-on-year increase of + 53.62% / + 22.59% / – 37.74% / + 252.05%. Q4’s revenue and profit increased significantly, mainly due to the increase of production capacity caused by the production of the second workshop, and the improvement of product batch issuance in the second half of the year, resulting in the increase of sales volume. The annual batch issuance volume of lyophilized human rabies vaccine (human diploid cells) was 4.795 million, a year-on-year increase of + 29.47%. In 2021, the company’s non recurring profit and loss was RMB 274 million, mainly due to the establishment of a joint-stock company Chengdu Kanghua Biological Products Co.Ltd(300841) (Hong Kong) Co., Ltd. during the reporting period, which recognized a change in fair value of RMB 238 million. The sharp decline in operating net cash flow was mainly due to the company’s increase in material reserves, payment of employee salaries and settlement funds.
Actively developing the business of dynamic protection and comprehensive layout of rabies competition: in 2021, Kang Hua mobile obtained the distribution right of the Hangzhou pet’s rabies inactivated vaccine in Chinese mainland and Macao, Hongkong and Taiwan area government procurement and pet hospital Wuxi Online Offline Communication Information Technology Co.Ltd(300959) . Kanghua dynamic insurance vigorously introduces high-quality marketing personnel, expands the pet vaccine sales and marketing team, speeds up the expansion of dealer channels, carries out market brand construction and product promotion, and creates industry brand influence. On December 5, 2020, Kanghua dynamic Insurance launched the Hillis guarding plan. By December 31, 2021, the plan has recruited more than 2000 pet hospitals. The combination of independent R & D and cooperative R & D lays the foundation for long-term development: in 2021, the company invested 788755 million yuan in R & D, with a year-on-year increase of 35.40%, accounting for 6.10% of operating revenue, which is fully expensed. The company continues to promote
Independent research and development of products, including hexavalent norovirus vaccine, acyw135 meningococcal conjugate vaccine, tetravalent nasal spray influenza vaccine, human rabies vaccine (human diploid cells) immobilized bioreactor culture process and other projects, and orderly promote preclinical research. In terms of foreign cooperation, we have reached cooperation with Xinran Bochuang on the research and development of herpes zoster vaccine, tuberculosis vaccine and rabies vaccine based on mRNA technology platform, which is conducive to the company’s establishment of mRNA vaccine technology platform; At the same time, the company continues to promote cooperative research and development with the Chinese Academy of Sciences, Hong Kong University, Sichuan University, Tianjin Medical University, Yaoming biology and Heyuan biology. With the continuous promotion of independent and cooperative R & D modes, the company’s product line will be continuously enriched in the future, laying a solid foundation for long-term development.
The operation in the first quarter was affected by the epidemic, and the steady growth of the whole year can be expected: the sales work of 2022q1 company was affected by the covid-19 epidemic, resulting in a slight decline in the growth rate. It is expected that with the subsequent covid-19 epidemic controlled and the release of the company’s new production capacity, the annual performance will maintain a steady growth. The negative expansion of Q1 operating net cash flow is mainly due to the increase of the company’s material reserves, payment of employee salaries, taxes and settlement funds. With the gradual collection of subsequent sales, it is expected that the company’s cash flow situation will be improved.
Profit forecast, valuation and rating: considering the uncertainty of covid-19 epidemic, the forecast of net profit attributable to parent company from 2022 to 2023 was slightly lowered to 844 / 1307 million yuan (the original forecast was 899 / 1316 million yuan, down 6% / 1% respectively). The new forecast of net profit attributable to parent company in 2024 was 1.595 billion yuan, an increase of 1.77% / 54.86% / 22.04% year-on-year. According to the latest equity calculation, EPS was 9.38/14.53/17.73 yuan, and the current price corresponding PE was 16 / 10 / 9 times respectively, maintaining the “buy” rating.
Risk tip: the risk of deterioration of the competition pattern of human diploid wild seedlings; The risk that the progress of the project under research is lower than expected; The risk that the sales of pet crazy seedlings do not meet the expectations.
