\u3000\u3 Shengda Resources Co.Ltd(000603) 538 Ningbo Menovo Pharmaceutical Co.Ltd(603538) )
Key investment points
Event: the company released the 2021 annual report and the first quarterly report of 2022. In 2021, the operating revenue was 1.258 billion yuan, a year-on-year increase of 6.21%, the net profit attributable to the parent was 143 million yuan, a year-on-year decrease of 8.62%, and the non net profit deducted was 126 million yuan, a year-on-year increase of 56.46%; In the first quarter of 2022, the operating revenue was 500 million yuan, a year-on-year increase of 47.86%, the net profit attributable to the parent company was 115 million yuan, a year-on-year increase of 128.92%, and the non net profit deducted was 109 million yuan, a year-on-year increase of 142.73%.
Revenue grew steadily, and cdmo and preparations continued to increase in large quantities. In 2021, the company's revenue increased steadily, mainly driven by the rapid growth of cdmo and preparation business. Among them, cdmo revenue was 265 million yuan, a year-on-year increase of 118.31%; The revenue from preparations was 153 million yuan, a year-on-year increase of 103.58%; The revenue of APIs and intermediates was 748 million yuan, a year-on-year decrease of 21.50%. We expect it to be mainly affected by the rhythm of delivery and the decline of prices. In a single quarter, the revenue of 21q4 was 339 million yuan (year-on-year + 38.29%, the same below), the net profit attributable to the parent was 7.13 million yuan (- 72.93%), and the non net profit deducted was 11.61 million yuan (- 124.45%); 22q1 revenue was 500 million yuan (+ 47.86%), net profit attributable to parent company was 115 million yuan (+ 128.92%), and non net profit deducted was 109 million yuan (+ 142.73%). The rapid growth of 22q1 revenue is mainly driven by cdmo and preparation business. The growth rates of the two businesses are 296.09% and 50.87% respectively. The profit growth is faster than the revenue growth, mainly due to the increase of 22q1 gross profit margin, which is 40.49% (+ 5.51pp).
The gross profit margin increased gradually, and the three expense rates remained stable. On the one hand, the gross profit margin of some products increased significantly after the rapid growth of 512pp and 2022pp (+ 49.37%), and the gross profit margin of some products increased gradually after the rapid growth of 512pp and 2022pp respectively; The three expense rates were 17.44% (+ 0.12pp) and 11.21% (- 2.66pp) respectively. The three expense rates remained basically stable, of which the 22q1 management expense rate was 8.91% (- 2.13pp), mainly due to the decline of share based incentive expenses and the rapid growth of income.
Continuously enrich the varieties of cdmo and raw materials for customers. 1) Accelerate the layout of cdmo business and build future performance growth points. The company signed a ten-year cdmo strategic cooperation agreement with MSD in the fields of pet medicine, veterinary medicine and animal health care. The 2021 annual report disclosed that the work of nine projects in the first phase has been carried out in different stages, and the technology transfer has been gradually completed and will be commercialized. At the same time, the company actively distributes small nucleic acid cdmo business, provides raw materials for mainstream nucleic acid detection products in China, and constructs a new growth point. 2) The preparation business actively implements the strategy of "technology transfer + independent declaration + China MAH cooperation", and the centralized collection of varieties continues in large quantities. A number of self-developed and cooperative preparation varieties are expected to be approved for listing one after another, and the transformation of preparations is accelerated. The company won the bid for the fourth batch of national centralized procurement of drugs for perindopril TERT butylamine tablets and pregabalin capsules; Atorvastatin calcium tablets, losartan potassium tablets and lisinopril tablets won the bid for joint centralized procurement in 13 provinces of Guangdong, Jiangsu and Shandong, accelerating the pace of preparation transformation. In terms of self-developed and cooperative varieties, at present, the company has 7 preparation products listed in China, and 8 products including gliclazide sustained-release tablets, isoniazid tablets (generic drug consistency evaluation), valsartan hydrochlorothiazide tablets, rivaroxaban tablets, moxifloxacin hydrochloride tablets and vigliptin tablets are under CDE review, including valsartan amlodipine tablets, amlodipine atorvastatin calcium tablets, bisoprolol fumarate tablets Eight products, including propofol fumarate tenofovir tablets, engliejing tablets, dagliejing tablets, sitagliptin metformin tablets and clopidogrel bisulfate tablets, are in the formal be stage, and more than 30 products are under research. 3) API welcomes new production capacity, new customers and new varieties. In terms of production capacity, during the expansion of the three API production bases, a total of about 2500 tons of API and intermediate production capacity will be added, laying the foundation for future growth. Xuancheng Ningbo Menovo Pharmaceutical Co.Ltd(603538) has entered a large-scale stage. In terms of customers, on the basis of key customer Krka, we continue to explore new customers and new markets. In terms of products, the company has realized more than 20 international and Chinese commercialized varieties, focusing on the core treatment field. Valsartan, esomeprazole magnesium, moxifloxacin hydrochloride, sitagliptin phosphate, rosuvastatin calcium and other new processes or products are being accelerated and registered.
Profit forecast and investment suggestions: according to the latest announcement, considering the continuous and rapid growth of the company's cdmo and preparations and the high increase in performance brought by the flexibility of covid-19 business orders, we adjusted the profit forecast. It is estimated that the company's revenue from 2022 to 2024 will be 1.804 billion yuan, 2.375 billion yuan and 2.959 billion yuan (1.523 billion yuan and 1.913 billion yuan before the adjustment in 2022 and 2023), with a year-on-year increase of 43.3%, 31.7% and 24.6%; The net profit attributable to the parent company was 302, 414 and 567 million yuan (222 and 297 million yuan before the adjustment in 2022 and 2023), with a year-on-year increase of 112.1%, 37.1% and 36.9%; The corresponding EPS is 1.98, 2.72 and 3.72 yuan. At present, the company's share price corresponds to 25 / 19 / 14 times PE from 2022 to 2024. Considering that the company is in the stage of API expansion and upgrading and accelerated transformation of preparations and cdmo, it maintains the "buy" rating.
Risk warning events: environmental protection risk, quality risk, risk of price fluctuation of APIs and intermediates, risk of product R & D failing to meet expectations, risk of delayed or delayed update of public data and information.
