\u3000\u3 Guocheng Mining Co.Ltd(000688) 166 Brightgene Bio-Medical Technology Co.Ltd(688166) )
The company released its annual report for 2021. The revenue, net profit attributable to the parent and net profit attributable to the parent after deduction were 1.052 billion yuan, 244 million yuan and 224 million yuan respectively, with a year-on-year increase of 34%, 43.6% and 42.7% respectively. The net profit attributable to the parent company and non parent company in the quarter increased by 6.737 billion yuan, 6.707 billion yuan and 0.407 billion yuan respectively, representing a year-on-year increase of 6.707 billion yuan and 0.407 billion yuan respectively. The annual EPS was 0.6 yuan / share, which was basically in line with our previous expectations.
The growth of core API varieties was strong, and the contribution of other varieties to gross profit increased. Antifungal APIs represented by fenjing increased by 61% and contributed 48% of gross profit, making it the largest category of the company. Other varieties represented by fondaparinux sodium increased by 95% year-on-year, and the gross profit contribution increased to 25%. Among them, the revenue of anticoagulant fondaparinux sodium increased by 244% year-on-year, and the gross profit margin was 59% (year-on-year + 2.41%). In addition, the revenue of antiviral raw materials increased by – 7% and the contribution of gross profit was 6%.
Increase capital expenditure and wait for capacity release. In the past 21 years, the company’s existing capacity was tight. The capacity utilization rate of most workshops in Borui pharmaceutical and Borui Taixing production bases was more than 90%. The company ensured the rapid growth of performance through capacity allocation and overall production. At the same time, 21 years is a year for the centralized construction of the company’s production capacity. By the end of 21 years, the book value of the company’s fixed assets and projects under construction were 238 million and 1.131 billion respectively, and the book value of projects under construction was 4.75 times that of fixed assets. At the same time, compared with the end of 20 years, the number of projects under construction increased by more than 900 million. The company has carried out the capacity layout of APIs and preparations in Taixing, Suzhou and Shandong respectively. After the implementation of multiple capacity bases, it is expected to significantly increase the capacity scale of the company.
Investment suggestion: the company is a rare generic pharmaceutical enterprise with high technical barriers in China. Relying on multiple technical platforms, the company has successfully developed a variety of API varieties that dominate the global supply, with rich varieties and stable expected growth. At the same time, the company has arranged multiple potential fields, such as long-term PDC coupling technology platform, abiotic macromolecular technology platform and inhalation preparation platform. At present, the development of the company is greatly restricted by production capacity. With the gradual release of production capacity, the development of the company is expected to enter a new level. We expect the company to achieve EPS of 0.76 yuan, 1.03 yuan and 1.39 yuan from 2022 to 2024 respectively. The closing price on April 22, 2022 corresponds to about 28 times of the valuation in 2022. We continue to give recommended ratings and recommend attention.
Risk warning: the impact of the epidemic exceeds expectations; The impact of centralized purchase and other policies exceeded expectations; Risk that the performance growth is less than expected; Product competition intensifies risks; Risk that the progress of product approval is less than expected; Capacity release is less than expected; Risk of production safety accidents; Product R & D risk; Order fluctuation risk; Macroeconomic downside risks at home and abroad; Stock market systemic risk.
