\u3000\u3 China Vanke Co.Ltd(000002) 250 Lianhe Chemical Technology Co.Ltd(002250) )
The company issued the annual report of 2021. In 2021, the company realized an operating revenue of 6.587 billion yuan, a year-on-year increase of 37.75%; Deduct non net profit of 288 million yuan, with a year-on-year increase of 357.20%. After deducting the impairment of goodwill, the net profit attributable to the parent company was 359 million yuan, with a significant year-on-year improvement.
The resumption of production of Jiangsu base in 2021 will bring about a significant increase in revenue. The business target of 2022 is that the industrial business revenue will increase by no less than 15% year-on-year in 2022. 1) In terms of operating revenue by product, the operating revenue of medicine, plant protection and functional chemicals in 2021 changed by 22.02%, 57.86% and 22.27% year-on-year to RMB 1.217, 4.277 and 734 billion; 2) In terms of gross profit margin of products, the gross profit margin of medicine, plant protection and functional chemicals changed by 1.77, 8.50 and 18.17 percentage points year-on-year in 2021 to 40.66%, 22.98% and 25.74%; 3) The rates of sales, management (including R & D) and financial expenses changed by – 0.02, – 6.35 and – 1.16 percentage points to 0.22%, 16.53% and 1.53% respectively year-on-year in 2021. The total rate of three expenses changed by – 7.52 percentage points to 18.28%. The increase in R & D expenses was mainly due to the company’s continuous increase in R & D investment; 4) The sales of pesticides, pharmaceuticals and functional chemicals increased by 75.27%, 12.24% and 53.81% year-on-year to 18809, 1449 and 33716 tons, of which the sales of pesticides and functional chemicals increased significantly due to the resumption of production in Jiangsu and the increase of market demand respectively. The production capacity of herbicides, pesticides and fungicides is 21005, 8265 and 6097 tons respectively, the utilization rate of production capacity is 70.42%, 56.74% and 44.76%, and the production capacity under construction is 0, 3300 and 1750 tons; The pharmaceutical capacity is 2166 tons, the capacity utilization rate is 87.42%, and the capacity under construction is 280 tons; 51131 tons of functional chemicals, capacity utilization rate 69.34%, no construction in progress.
The revenue of the pharmaceutical sector maintained rapid growth. In 2021, the process validation of more than 8 new molecular registered intermediate and API projects was completed, and it is expected to enter cro in the future. 1) In 2021, the number of products in commercialization, clinical phase 3 and other clinical stages of the company were 17, 33 and 69 respectively, and their respective revenues were 750, 150 and 320 million yuan respectively. The revenue volume of a single product was 43.85, 4.6 and 4.63 million yuan respectively, of which the number of products was 119, an increase of 7% year-on-year. 2) The scale of pharmaceutical core R & D team will expand by nearly 40% in 2021, and more than 1 / 3 of employees have master’s or doctoral degrees. In 2021, the pharmaceutical R & D team used the company’s continuous tubular reaction technology to conduct industrial process research on the company’s projects, and has developed tubular processes for 10 projects, which plays a great role in reducing costs, safety risks and three wastes. At the same time, it will develop to more fields not involved, including long-chain lipids, nucleic acids and so on. 3) The company will also build a cro platform and a cro team according to the new needs of customers, so as to better provide customers with one-stop solutions.
Profit forecast. Affected by the rising price of raw materials, the company’s performance was lower than expected, so we lowered our profit forecast for the company. We estimate that the net profit of the company from 2022 to 2024 will be 474 (- 27.52%), 602 (- 25.81%) and 799 (newly introduced) million yuan respectively, and the corresponding EPS will be 0.51, 0.65 and 0.87 yuan respectively. With reference to the valuation of comparable companies in the same industry, the company is given 35 times PE in 2022, corresponding to the target price of 17.85 yuan (the target price in the previous period was 24.30 yuan, based on 50 times PE in 2021, – 26.54%), maintaining the rating of “better than the big market”.
Risk warning. Stricter environmental protection supervision, failure in research and development of new products, rising prices of raw materials and macroeconomic downturn.
