\u3000\u3 Shengda Resources Co.Ltd(000603) 520 Zhejiang Starry Pharmaceutical Co.Ltd(603520) )
Matters:
The company released its 2021 annual report, realizing a revenue of 2 billion yuan, a year-on-year increase of 46.29%; The net profit attributable to the parent company was 324 million yuan, a year-on-year increase of 35.62%; The net profit attributable to the parent company after deduction was 308 million yuan, a year-on-year increase of 30.04%; EPS is 1.32 yuan / share. The company’s performance is in line with expectations. The profit distribution plan for 2021 is to allocate 5 yuan (including tax) for every 10 shares to increase 4 shares.
At the same time, the first quarterly report of 2022 was released, with a revenue of 517 million yuan, a year-on-year increase of 42.08%; The net profit attributable to the parent company was 80.24 million yuan, a year-on-year increase of 24.27%; The net profit attributable to the parent company after non deduction was 73.12 million yuan, a year-on-year increase of 22.86%.
Ping An View:
In 2021, the revenue maintained rapid growth, the profit was temporarily dragged down by the cost side, and the expense rate was significantly optimized. In 2021, the company’s revenue was 2 billion yuan (+ 46%), maintaining a rapid and large-scale trend, and the net profit attributable to the parent company was 324 million yuan (+ 36%). We believe that the profit growth rate is lower than the revenue growth rate, which is mainly dragged down by the cost side. In 2021, the company’s gross profit margin was 37.40% (- 6.59pp). Affected by the price increase, the cost of contrast medium raw materials has accounted for 67.17% (+ 6.90pp) of the company’s total cost. Thanks to the strengthening of internal management, the cost rate of the company has been significantly optimized. The four cost rates are 17.34% (- 5.12pp), of which the management cost rate has decreased to 6.54% (- 3.73pp).
It is expected that the target of contrast agent API will be achieved, and the preparation will be rapidly released by centralized collection. In terms of sectors, the revenue of contrast agent series is 1.743 billion yuan (+ 44%), of which the preparation end relies on centralized purchase and rapid volume. Shanghai Zhejiang Starry Pharmaceutical Co.Ltd(603520) achieved revenue of 219 million yuan (only 12.24 million yuan in the same period of last year), net profit of – 34.02 million yuan (73.91 million yuan in the same period of last year), sales of about 1.35 million bottles of preparations in China, and the total revenue of preparation end of IMAX platform outside Shanghai is about 250 million yuan; The sales volume of API is expected to exceed 1400 tons, and the revenue is about 1.5 billion yuan, with a year-on-year increase of about 30%. The revenue of quinolones was 35.54 million yuan (- 57%), which was mainly affected by the shutdown. Cdmo is the key business segment of the company, with a revenue of 45.02 million yuan in 2021 and is expected to achieve rapid growth in 2022.
Continue to enhance research and development, and continue to move forward to the Grand Slam in the field of super contrast agents. In 2021, the company invested 129 million yuan in R & D (+ 30%), accounting for 6.47% of its revenue. In 2021, complete the submission of supplementary materials for the declaration, issuance and supplement of iodomethor and iodofol preparations, and accept on-site inspection. In December 2021, the registration application for gadolinium bepron injection was submitted to CDE, and gadolinium butoxide was in the pilot scale-up stage. The varieties of contrast agents applied by the company are all new 4 categories. After listing, they are deemed to have passed the consistency evaluation and can be quickly released through centralized purchase. With the continuous approval of the variety of contrast agent preparations, the company will become one of the enterprises with the richest variety of preparations in China.
The whole industrial chain layout of contrast agent, the leading advantage is becoming more and more stable, and the “recommended” rating is maintained. Considering the relatively low gross profit margin of preparations after centralized purchase (Shanghai Zhejiang Starry Pharmaceutical Co.Ltd(603520) has not yet reversed its losses) and the impact of the upstream cost side, we adjusted the company’s net profit attributable to the parent company from 2022 to 2023 to 460 million and 651 million yuan (the original forecast was 512 million and 684 million yuan). It is estimated that the company’s net profit in 2024 will be 872 million yuan, and the current stock price corresponds to 20 times of PE in 2022, maintaining the “recommended” rating.
Risk tips: 1) market competition risk: if a competitor is put into operation, it will have an adverse impact on the company; 2) R & D risk: there is a possibility that the R & D Progress of products under research may be less than expected; 3) Risk of Overseas Development: the overseas business development of preparations or APIs may be slower than expected.
