\u3000\u3 Guocheng Mining Co.Ltd(000688) 105 Nanjing Vazyme Biotech Co.Ltd(688105) )
Key investment points
Event: on April 21, 2022, the company released the 21st Annual Report and the first quarterly report of 22 years. In 2021, the company realized an 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%; Net profit deducted from non parent company was 644 million yuan, a year-on-year decrease of 20.90%. In the first quarter of 2022, the company achieved an operating revenue of 975 million yuan, a year-on-year increase of 80.07%, a net profit attributable to the parent of 431 million yuan, a year-on-year increase of 28.18%, deducting a net profit not attributable to the parent of 413 million yuan, a year-on-year increase of 25.79%.
The 91% high growth of conventional business has driven the rapid improvement of overall performance. In 2021, the company’s regular business income was 719 million yuan (+ 91%), driving the overall business to maintain good performance under the 20-year covid-19 high base. Among them, the operating revenue of 21q4 was 580 million yuan, a year-on-year increase of 36.09%; The net profit attributable to the parent company was 128 million yuan, a year-on-year decrease of 40.88%. The decline in profits in a single quarter was mainly due to the rapid expansion of production and sales scale after the company was listed, and the increase of various expenses and cost inputs. In the first quarter of 2022, the company still maintained rapid growth under the disturbance of the epidemic in China, mainly due to the continuous promotion of the company’s routine business and the outbreak of demand for covid-19 products such as antigen self-test kit.
The routine business of life sciences has achieved a high growth of 66%, and the sales team of nearly 600 people has laid a good foundation for large-scale products.
In 2021, the company’s revenue from life science reagent products was 1.339 billion yuan, including 533 million yuan from conventional business, with a year-on-year increase of 66%, and 806 million yuan from covid-19 business, with a year-on-year increase of 21%. Life science products are the core growth point of the company’s performance (revenue accounts for 72%). With rich and comprehensive scientific research reagent products, the company speeds up its penetration into traditional customer groups such as universities and scientific research institutes. At the same time, it continues to develop cutting-edge products such as metagenome detection and tumor high-throughput sequencing, and constantly expand its business coverage. At present, the company has completed the establishment of a sales team of nearly 600 people for the life science business, filling many blank sales areas. In the future, it is expected to quickly penetrate more customer groups and continue the high growth trend.
The growth rate of conventional IVD business reached 104%, and many characteristic projects such as gastric function and self exemption achieved high growth. In 2021, the company’s in vitro diagnostic business realized a revenue of 433 million yuan, including 89 million yuan from conventional business, a year-on-year increase of 104%, and 344 million yuan from covid-19 related business, a year-on-year decrease of 34%. In 2021, the company took advantage of the opportunity of covid-19 to expand rapidly, accumulatively entered more than 2000 medical terminal institutions, and related products have passed the market introduction period and began to increase gradually. In the future, it is expected to achieve rapid growth by virtue of the continuous and large-scale volume of the eight characteristic projects.
The revenue of biomedical business is nearly 100 million, and the layout of many innovative products such as mRNA enzyme raw materials has been completed. In 2021, the company’s biomedical business revenue was 97 million yuan, a year-on-year increase of 774%. In 2021, the company has completed the construction and layout of three production lines: new drug / vaccine R & D reagent, vaccine clinical cro service and vaccine raw materials. Especially for mRNA vaccines such as covid-19 vaccine, the company has completed the technical research of more than 10 enzyme raw material products and established early-stage cooperative relations with many customers, which is expected to become an important driving force for medium and long-term performance growth.
The growth rate of R & D investment exceeded 83%, and a variety of products under research are progressing smoothly. In 2021, the company invested 230 million yuan in R & D expenses, with a year-on-year increase of about 83.47%, the R & D expense rate reached 12.33%, and the R & D team expanded to 652 (+ 56.73%), providing sufficient impetus for the rapid development of more innovative products in the future. In the past 21 years, the company has developed more than 200 products such as covid-19 enzyme raw materials and bio assey for new drug research and development. The products under research, such as high affinity antibody and microfluidic, have achieved phased results, and are expected to contribute brilliant achievements to the company in the future.
Profit forecast and investment suggestions: according to the data of the annual report and the first quarterly report, we believe that the covid-19 business may continue to exceed expectations while the company’s conventional business is growing rapidly. It is estimated that the company’s revenue from 2022 to 2024 will be RMB 3.433 billion, 2.594 billion and 3.216 billion (+ 84%, – 24%, + 24%), and the revenue from 22 to 23 years before adjustment will be RMB 1.941 billion and 2.271 billion; The net profit attributable to the parent company was 1.157, 903 and 1109 billion yuan (+ 82%, – 30 and + 25%), 749 and 834 million yuan in the 22-23 years before adjustment; The corresponding EPS is 2.89, 2.26 and 2.77. Considering that the company is a leader in China’s biological reagent industry, it is expected to maintain a high growth trend and maintain a “buy” rating in the future.
Risk warning events: risk of new product research and development, risk of policy change, risk of intensified market competition, risk of information lag or untimely update of public materials used in research reports, etc.
