\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 76 Bgi Genomics Co.Ltd(300676) )
Key investment points
Events: 1) the company released its 2021 annual report, with annual revenue of 6.77 billion yuan (- 19.4%), net profit attributable to parent company of 1.46 billion yuan (- 30.1%), net profit attributable to non parent company of 1.36 billion yuan (- 33.7%) and net operating cash flow of 2.48 billion yuan (- 31.3%); 2) The company released the first quarter report of 2022. The Q1 revenue was 1.43 billion yuan (- 8.5%), the net profit attributable to the parent company was 330 million yuan (- 37.1%), the net profit not attributable to the parent company was 300 million yuan (- 43.9%), and the net operating cash flow was – 670 million yuan (- 609.8%).
Covid-19 business affects the apparent growth rate. 22q1 strategic reserve covid-19 testing reagent raw materials. Quarterly, the revenue of Q1 / Q2 / Q3 / Q4 in 2021 was 15.6% / – 20.8% / – 15.1% / – 1.61 billion yuan respectively, with a year-on-year growth rate of + 97.6% / – 37.2% / – 43.1% / – 1.9% respectively. The net profit attributable to parent company in a single quarter was 5.3/5.6/3.3/0.5 billion yuan, with a year-on-year growth rate of + 274.9% / – 62.9% / – 68.9% / + 107.7% respectively. The apparent growth rate of 22q1 revenue and net profit was further under pressure, mainly due to the large contribution of covid-19 business in 2020 and 21q1. In terms of profitability, the gross profit margin of 22q1 was 58.5% (- 5.1pp). Due to the high gross profit margin, the proportion of covid-19 business contribution decreased, and the four rate was 30.8% (+ 7.6pp), which finally led to the decline of 22q1 profit. 22q1 net operating cash flow was – 670 million, mainly due to the increase in the company’s strategic reserve covid-19 nucleic acid and antigen detection products related raw material procurement expenses.
The regular business has recovered its steady development trend. In terms of business, 1) in 2021, the company’s revenue from comprehensive solutions for precision medical testing was 3.38 billion yuan (- 39.2%), which was mainly due to the intensified competition in the supply of covid-19 nucleic acid testing reagents and the pressure on prices and sales. Subsequently, with the increase of the company’s contribution to covid-19 antigen testing, it is expected to alleviate the pressure of the sharp decline of this business. 2) The revenue from basic research and clinical application services for infection prevention and control was 1.16 billion yuan (+ 73%), mainly due to the significant increase in covid-19 testing services. 3) In 2021, the regular business resumed a steady development trend, in which the income from basic research and clinical application services of reproductive health was 1.19 billion yuan (+ 1.2%), the income from cancer prevention and control and translational medicine services was 380 million yuan (+ 8.1%), and the income from big data service and synthesis business of multi omics was 640 million yuan (+ 2.5%).
The business layout is gradually clear, and the molecular diagnosis leader seizes the opportunity to rise strongly. The company’s business layout includes five business segments: reproductive health services, tumor prevention and control services, pathogen infection services, multi omics big data and synthesis services, and comprehensive solutions for precision medical testing. With years of continuous high R & D investment, new products in various sectors have been approved. This round of epidemic situation has helped the company achieve globalization and multi business expansion.
Profit forecast and investment suggestions: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.03 billion yuan, 1.09 billion yuan and 1.13 billion yuan respectively, and the corresponding EPS will be 2.48, 2.64 and 2.74 yuan respectively, maintaining the “hold” rating.
Risk warning: covid-19 test kit sales have market demand uncertainty; New business expansion may be affected by policy risks, international situation and other factors.
