\u3000\u3 Shengda Resources Co.Ltd(000603) 520 Zhejiang Starry Pharmaceutical Co.Ltd(603520) )
The company issued the annual report of 2021. In 2021, the company realized an operating revenue of RMB 20.00, with a year-on-year increase of 46.29%. The net profit attributable to the parent company was RMB 324 million, with a year-on-year increase of 35.62%, and the net profit deducted from non net profit was RMB 308 million, with a year-on-year increase of 30.04%.
In Q4 of 2021, the company realized an operating revenue of 689 million yuan, a year-on-year increase of 114.94%; The net profit attributable to the parent company was 104 million yuan, a year-on-year increase of 158.84%; Deduct non net profit of 84 million yuan, with a year-on-year increase of 94.76%. The company released the first quarterly report of 2022. The company achieved an operating revenue of 517 million yuan in Q1 of 2022, with a year-on-year increase of 42.08%; The net profit attributable to the parent company was 80 million yuan, a year-on-year increase of 24.27%; Deduct non net profit of 73 million yuan, with a year-on-year increase of 22.86%.
Viewpoint: the company’s performance is in line with market expectations, with outstanding performance in 2021q4, and it is worth looking forward to 2022. The company grew steadily throughout the year, and the rapid growth of 2021q4 performance may be due to the rhythm of quarterly delivery. In the first quarter of 2022, the company maintained a rapid growth trend. This year, the preparation is expected to increase rapidly, the cdmo business continues to promote, and the whole year is expected to achieve high growth.
The financial indicators of the overall statements are sound. In 2021, the gross profit margin of the company’s sales was 37.40%, a decrease of 6.59pct compared with the previous year (43.99%). We judged that it was mainly due to the rise in the price of upstream raw materials; The company’s net profit margin on sales was 16.49%, a decrease of 2.06pct compared with the previous year (18.55%). The company’s sales expense ratio was 0.98%, an increase of 27pct over the previous year (0.71%), mainly due to the supplementary sales team and market promotion of the preparation business; The rate of administrative expenses was 6.54%, a decrease of 3.73 PCT over the previous year (10.27%); The R & D expense ratio of the company was 6.23%, a decrease of 0.20pct over the previous year (6.43%). The company’s financial expense ratio was 3.59%, down 1.46pct from the previous year (5.05%).
There are many things to see about the progress of preparation business. On February 1, 2021, the company’s iohexol injection and ioxamol injection were selected in the centralized collection in Shandong Province. On June 28, 2021, the company’s iohexol injection and ioxamol injection were selected, and the fifth batch of drugs were purchased centrally across the country, which was implemented nationwide in October 2021. The company continues to move towards the goal of product Grand Slam in the field of contrast agents. In 2021, the supplementary materials of iodomepur injection and iodofol injection were submitted and accepted on-site inspection. In December 2021, the registration application for gadolinium besmeglumine injection was submitted to CDE.
Profit forecast and valuation. The company is the leader of contrast agent in China and a rare high-quality contrast agent generic pharmaceutical enterprise. It has successfully entered the preparation field. With the gradual release of API production capacity + rapid volume of preparation + gradual implementation of internationalization strategy, its performance is expected to grow rapidly. According to the latest annual report, we adjusted the profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 2.755 billion yuan, 3.710 billion yuan and 5.063 billion yuan respectively, with a year-on-year increase of 37.7%, 34.7% and 36.5% respectively; The net profit attributable to the parent company was 494 million yuan, 692 million yuan and 938 million yuan respectively, with a year-on-year increase of 52.4%, 40.1% and 35.7% respectively; The corresponding PE is 19x, 13X and 10x respectively. Maintain the “buy” rating.
Risk warning: API safety production risk; API price fluctuation risk; The risk that the sales of preparations are less than expected; Risk of failure in research and development of new varieties; Industry policy risk.
