\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Event: the company released the first quarterly report of 2022. In the first quarter of 2022, the company achieved total operating revenue and net profit attributable to the parent company of RMB 8.474 billion and RMB 1.643 billion respectively, with a year-on-year increase of 71.18% and 9.54% respectively; The non net profit deducted was 1.714 billion yuan, a year-on-year increase of 106.52%. The performance is in line with expectations.
Comments:
The company’s core business maintained high growth. In the first quarter of 2022, the company’s chemical business realized a revenue of 6.118 billion yuan, a year-on-year increase of 102.11%; The revenue of testing business, biology business, cell and gene therapy ctdmo business was 1.279 billion yuan, 533 million yuan and 299 million yuan respectively, with a year-on-year increase of 31.7%, 26.17% and 36.99% respectively; The revenue of China’s new drug R & D service department was 240 million yuan, a year-on-year decrease of 21.57%.
Abundant orders are in hand and continue to promote capacity construction. By the end of the first quarter of 2022, the company’s contractual liabilities were 3.296 billion yuan, a year-on-year increase of 101.6%. With the increase of orders on hand, the company’s inventory reserve increased rapidly; By the end of the first quarter, the company’s inventory was 6.415 billion yuan, a year-on-year increase of 108%. The company continued to promote capacity construction. In terms of chemical business, Changshu plant for API production was put into operation in the first quarter, and Changzhou phase III plant for GMP production was put into operation successively, including one R & D center and two production workshops. By the end of the first quarter, the company’s projects under construction were 6.749 billion yuan, a year-on-year increase of 90.5%.
Investment suggestion: the company is the world’s leading CXO enterprise, constantly optimizing and exploring cross platform business synergy, accelerating the pace of globalization, continuously strengthening the company’s unique integrated crdmo (contract research, development and production) business model, and providing real one-stop services to meet customers’ service needs from drug discovery, development to production. It is estimated that the company’s earnings per share from 2022 to 2023 will be 2.75 yuan and 3.36 yuan respectively, and the current share price corresponding to PE will be 36 times and 29 times respectively, maintaining the “recommended” rating of the company.
Risk tips: industry competition intensifies, R & D investment of upstream pharmaceutical enterprises decreases significantly, capacity expansion is less than expected, talent team construction is less than expected, drug R & D failure risk, loss of key customers, industry policy risk, etc.
