The short-term stock price is obviously disturbed by market sentiment. In the medium and long term, Chinese CXO enterprises occupy an important strategic position in the global supply chain system. From March 17 to April 18, the cro index fell 0.84%. We believe that the current cold in the capital market of CXO sector is mainly caused by the transmission of pessimistic market sentiment. The overseas analyst team predicts that Pfizer covid-19 oral drug Q1 sales may be lower than expected, but it still maintains the original prediction for the annual sales. At present, Pfizer’s sales guidance for paxolvid in 2022 is US $22 billion, the market consensus expectation is US $28.2 billion, and JPMorgan raised its expectation to US $33 billion. We believe that 1) all countries are promoting paxolvid clinical trials to expand its scope of use, and oral covid-19 is still an important treatment. 17500 people have participated in large-scale clinical trials carried out by the UK Department of health; The preliminary clinical efficacy of paxolvi in Shenzhen, China; At the same time, Pfizer also launched clinical trials for children aged 6-17. 2) The market believes that if the sales of covid-19 oral drugs decline, the performance of relevant cdmo companies may be affected. We believe that in the medium and long term, although covid-19 oral medicine brings large order opportunities, in essence, the significant improvement of the status of Chinese CXO enterprises in the global supply chain system, the formation of multi-level and high-quality customer groups and rich project pools are the core driving force to maintain the sustained growth of performance.
Driven by overseas and Chinese dual wheels, the growth rate of income and profit of Chinese CXO enterprises far exceeded the average growth rate of the industry, reaching a record high in 2021. According to frost Sullivan’s data, the average annual compound growth rate of the global Cr (d) Mo market from 2017 to 2021 was 11.4% and that of China was 26%. According to our calculations, in 2021, 19 Chinese CXO enterprises achieved a revenue of 71.3 billion yuan, a year-on-year increase of 46%; The net profit attributable to the parent company was 17.5 billion yuan, a year-on-year increase of 71%; From 2017 to 2021, the average annual compound growth rate of revenue was 32.5%, and the profit was 56.5%, far exceeding the average growth rate of the industry.
Investment suggestions: 1) first line cdmo with strong performance certainty: including Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) and Porton Pharma Solutions Ltd(300363) ; 2) Characteristic CXO sustainable growth opportunities: including Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) Apeloa Pharmaceutical Co.Ltd(000739) baicheng medicine and Beijing Sun-Novo Pharmaceutical Research Co.Ltd(688621) ; 3) New opportunities for third-generation cell gene therapy: including Kingsley biotechnology, and metabiology.
Risk warning: risk of performance falling short of expectations, overseas policy risk, new business investment falling short of expectations, China Meheco Group Co.Ltd(600056) policy risk
