\u3000\u3 Guocheng Mining Co.Ltd(000688) 526 Wuhan Keqian Biology Co.Ltd(688526) )
Event: the company recently released its 2021 annual report and 22 / Q1 quarterly report. In 2021, it achieved a revenue of 1.103 billion yuan, an increase of 30.81hng%; The net profit attributable to the parent company was 570 million yuan, an increase of 27.45% at the same time. 22 / Q1, the revenue was 202 million yuan, with a decrease of 36.46%; The net profit attributable to the parent company was 907659 million yuan, with a decrease of 46.28%; The basic earnings per share is 0.2 yuan. Comments are as follows:
Q1 performance fell, mainly affected by the decline of pig seedling business. 22 / Q1, the company achieved a revenue of 203 million yuan, of which the revenue of pig seedling products accounted for 97% of the total revenue. 21 / Q1, the company’s revenue was 319 million yuan, the highest level in Q1 history. Compared with the high base of 21 / Q1, the revenue decreased by 36% year-on-year, but it is still higher than the level of 20 / Q1. We believe that the year-on-year decline in the sales volume of the company’s pig seedling products or the main reason for the decline in revenue. The decline in the sales of pig seedlings is mainly affected by two factors: first, the loss of downstream pig breeding industry has significantly reduced the number of pigs immunized; Secondly, some customers prepared goods in advance on 21 / Q4, which also affected the product sales during 22 / Q1. In addition, the company gives profits and goods to customers, which affects the product sales unit price and gross profit margin. 22 / Q1, the gross profit margin was 72.95%, down 10.8 percentage points from the same period last year. It is expected that with the rise of pig price in the second half of the year, the product price and gross profit margin will gradually rise to the normal level.
Expand the product matrix and enhance the competitive advantage. In 2021, the company obtained veterinary drug registration certificates for five products, including porcine pseudorabies gE gene deletion inactivated vaccine (hnx-12 strain) and porcine encephalitis B live vaccine (passage cell source, SA14-14-2 strain), and the cumulative number of products with veterinary drug certificates increased from 33 to 38. The above five products may be successively approved for listing in 2022; Four products including the porcine infectious pleuropneumonia gene deletion live vaccine (app-hb-04m strain), porcine circovirus type 2 and the two subunit inactivated vaccine of Haemophilus parasuis have completed the review and inspection, and will soon obtain the new veterinary drug certificate; In addition, several products of pig seedling, bird seedling and pet seedling business are in various preparation stages before listing. We believe that with the expansion of the product matrix, the company’s product advantages in the field of animal biological products will be further enhanced in the future.
The steady progress of production capacity construction has laid a solid foundation for the future development of the company. In 2021, while stabilizing the production in the original workshop, the company added 8 production lines and passed GMP certification. At present, the company has 19 biological product production lines and 3 diagnostic reagent production lines. It is one of the enterprises with the most complete types of veterinary vaccine production lines in China.
The company is the leader of China’s pig non compulsory free biological products, with obvious advantages in R & D and products, and is given a buy rating. The company is the leader of China’s non compulsory vaccine for pigs, with a leading market share. In 2020, the company ranked first in the sales revenue of non compulsory biological immunization products in China’s national market. Among them, from 2016 to 2020, the market share of Porcine Pseudorabies Vaccine ranked first for five consecutive years, and the market share of porcine mycoplasma pneumonia vaccine and porcine gastroenteritis and diarrhea vaccine ranked first in China for two consecutive years. The company is backed by central China Agricultural University and has an integrated R & D platform and a number of heavy products, with obvious advantages in R & D and products. In 2021, the company invested 80 million yuan in R & D, an increase of 35.42% at the same time; A new recombinant adenovirus vector vaccine platform was built, and the biological product R & D and creation platform was further improved. We are optimistic about the company’s long-term competitive advantages in R & D and products and give a “buy” rating. It is estimated that the company’s net profit attributable to the parent company in 22 / 23 / 24 years is 582 / 754 / 911 million yuan. According to the performance of 22 years, 20 times PE is given, and the target price in the next six months is 25.8 yuan, which is 30 +% away from the current price.
Risk tip: the recovery of product sales and price is less than expected
