\u3000\u3 Guocheng Mining Co.Ltd(000688) 105 Nanjing Vazyme Biotech Co.Ltd(688105) )
Event: on the evening of April 21, 2022, the company released its annual report for 2021: the company achieved an annual operating revenue of 1.869 billion yuan, a year-on-year increase of 19.44%; The net profit attributable to the parent company was 678 million yuan, a year-on-year decrease of 17.46%; Deduct non net profit of 644 million yuan, a year-on-year decrease of 20.90%. The net cash flow from operating activities was 617 million yuan, a year-on-year decrease of 23.24%; The basic earnings per share is 1.87 yuan, and a cash dividend of 3.00 yuan (including tax) is proposed to be distributed to all shareholders for every 10 shares. Among them, the operating revenue in the fourth quarter of 2021 was 580 million yuan, a year-on-year increase of 36.08%; The net profit attributable to the parent company was 128 million yuan, a year-on-year decrease of 40.88%; Deduct non net profit of RMB 115million, a year-on-year decrease of 45.92%.
On the same day, the company released the report for the first quarter of 2022. In the first quarter, the company achieved an operating revenue of 975 million yuan, a year-on-year increase of 80.07%; The net profit attributable to the parent company was 431 million yuan, a year-on-year increase of 28.18%; Deduct non net profit of 413 million yuan, with a year-on-year increase of 25.79%. The net cash flow from operating activities was 73 million yuan, a year-on-year decrease of 69.29%.
Routine business recovered rapidly, and the sales revenue of routine business increased by 91% year-on-year
The company's routine business covers scientific research reagents, sequencing reagents, diagnostic raw materials, diagnostic reagents and instruments, cro services, etc. in 2021, the sales revenue was 719 million yuan, with a year-on-year increase of 91%, mainly due to the full resumption of school and work of downstream customers, and all businesses returned to normal; And the company has strengthened the number of sales personnel and sales coverage density in key cities, and newly expanded the number and types of product SKUs; The sales revenue of covid-19 related businesses (including diagnostic raw materials and terminal detection reagents) reached 1.149 billion yuan, a year-on-year decrease of about 3.25%, mainly due to the large-scale decline in sales due to the fact that covid-19 antibody detection kits are no longer used on a large scale in China.
(1) life science business: it mainly involves three sub sectors: scientific research reagent, sequencing reagent and diagnostic raw material reagent. In 2021, the sales revenue was 1.339 billion yuan, including 533 million yuan of conventional business revenue, a year-on-year increase of 66%, and 806 million yuan of covid-19 business revenue, a year-on-year increase of 21%. The company further strengthens the construction of sales network in the field of life science business. At present, there are nearly 600 sales personnel.
(2) in vitro diagnosis business: through Nanjing Vazyme Biotech Co.Ltd(688105) medical, a wholly-owned subsidiary of the company, the company has successfully established a relatively rich POCT product line, and achieved a sales revenue of 433 million yuan in 2021, including 89 million yuan in conventional business, a year-on-year increase of 104%, 344 million yuan in covid-19 related business revenue, a year-on-year decrease of 34%.
(3) biomedical business: the company has established three product lines and services: new drug / vaccine R & D reagent, vaccine clinical cro service and vaccine raw materials. In 2021, the sales revenue was 97 million yuan, an increase of 774% year-on-year.
In terms of regions, the company mainly sells covid-19 related products overseas. In 2021, the amount of overseas sales revenue was 270 million yuan, a year-on-year increase of 26.97%, accounting for 14.49% of the total sales revenue. Up to now, the company's international business department has 145 employees, of which 28 have been dispatched overseas to carry out sales and technical support. Changes in product structure lead to downward fluctuations in gross profit margin and net profit margin
In the whole year of 2021, the company's comprehensive gross profit margin decreased by 10.23pct to 81.22% year-on-year, mainly due to the reduction of product prices of covid-19 related products due to the intensification of downstream competition and the impact of centralized purchase policies; The sales expense ratio increased by 5.10pct to 17.10% year-on-year, mainly due to the increase of 87% to 972 sales personnel, the improvement of the salary level of sales personnel, the increase of market expansion and the investment of publicity expenses; The rate of administrative expenses increased by 3.76 PCT to 9.62% year-on-year, mainly due to the increase of 161% to 232 managers, the improvement of the overall salary level of managers and the increase of office expenses; The R & D expense rate increased by 4.30pct to 12.33% year-on-year, mainly due to the increase of 57% to 652 R & D personnel. At the same time, with the increase of the number of R & D projects, R & D investment increased accordingly; The financial expense ratio decreased by 0.12pct to 0.17% year-on-year; Under the comprehensive influence, the overall net profit margin of the company decreased by 16.23pct to 36.30%.
In the first quarter of 2022, the operating revenue increased by 80.07% year-on-year, mainly due to the stable growth of the company's routine business and the sales of covid-19 antigen detection kit approved for listing in China; Due to the change of product structure, the company's gross profit margin and net profit margin decreased year-on-year: the company's comprehensive gross profit margin, sales expense rate, management expense rate, R & D expense rate, financial expense rate and overall net profit margin were 74.77%, 9.22%, 5.03%, 7.30%, 0.00% and 44.23% respectively, with changes of -17.67pct, + 0.39pct, + 0.64pct, + 0.24pct, + 0.03pct and -17.90pct respectively.
Profit forecast and investment rating: we expect the operating revenue from 2022 to 2024 to be 2.479 billion yuan / 2.551 billion yuan / 3.049 billion yuan respectively, with a year-on-year growth rate of 33% / 3% / 20% respectively; The net profit attributable to the parent company was 960 million yuan / 887 million yuan / 1089 million yuan, an increase of 42% / - 8% / 23% respectively; EPS is 2.40/2.22/2.72 respectively, corresponding to 34 times PE in 2022 according to the closing price on April 21, 2022. Give a "buy" rating.
Risk warning: uncertainty of covid-19 epidemic, risk of inventory impairment, risk of molecular diagnostic reagent business expansion, risk of intensified market competition.
