\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 39 Apeloa Pharmaceutical Co.Ltd(000739) )
Event: on April 26, 2022, Apeloa Pharmaceutical Co.Ltd(000739) released the report for the first quarter of 2022: the company achieved an operating revenue of 2.101 billion yuan in the first quarter of 2022, with a year-on-year increase of 6.85%; The net profit attributable to the parent company was 152 million yuan, a year-on-year decrease of 29.96%; The net profit attributable to the parent company after deduction was 136 million yuan, a year-on-year decrease of 28.30%.
Under the disturbance of multiple factors, the profit growth of Q1 is damaged, and Q2 is expected to improve significantly month on month. The company’s revenue in 2022q1 was 2.101 billion yuan, and the net profit attributable to the parent decreased by 21.24% month on month. On the whole, the company’s 2022q1 performance is mainly affected by the following factors: 1) affected by the epidemic control, the company’s antibiotic / antiviral API products with high gross profit are prohibited from being sold in pharmacies, resulting in a decline in sales revenue and profit; 2) The impact of Shanghai epidemic closure on logistics; 3) Since the beginning of this year, due to the rise of oil prices, the prices of raw materials have returned to a high level again, resulting in the rise of product production costs; 4) The Winter Olympics at the beginning of the year had a great impact on the production of factories in Shandong; 5) Q1 veterinary drug market is depressed, and the demand is weak due to the impact of pig price cycle. However, we believe that with the gradual easing of the epidemic, the improvement of the international situation leads to the stability of oil prices, the gradual recovery of downstream antibiotic and veterinary drug business, and the revenue and profit ends of 2022q2 company will be greatly improved.
Cdmo business has developed rapidly, API business has grown steadily, and preparation business has accelerated its recovery. In terms of revenue structure, the cdmo sector of 2022q1 accounts for about 14% and the gross profit margin is 43.03%; The preparation sector accounts for about 12% and the gross profit margin is 53.01%; API and intermediate business accounted for about 74% and the gross profit margin was 19.4%. The company’s cdmo business actually maintained rapid growth, but due to the interruption of logistics caused by the closure of the epidemic, the products could not be shipped normally, which affected the delivery and payment collection of cdmo products; The gross profit margin of the preparation sector decreased slightly, but with the normal progress of centralized purchase projects in the future, the preparation business will accelerate the recovery; The gross profit margin of the company’s API and intermediate sector also decreased slightly, mainly due to the rise in the price of upstream raw materials, resulting in the rise in costs. The overall gross profit margin of the company in 2022q1 was 26.71%, a year-on-year decrease of 11.38pp, but an increase of 25.99pp over the annual gross profit margin of 2021, indicating that the gross profit margin level of the company will gradually recover and the profitability will gradually develop well.
R & D expenses, projects under construction and other financial indicators increased significantly, indicating the certainty of the company’s long-term performance growth. The company’s R & D expenses increased by 45.03% in 2022q1, mainly due to the rapid growth of the number of R & D projects and the rapid expansion of R & D team, which indicates the further improvement of the company’s R & D ability and the further acceleration of the expansion to difficult and high gross profit projects in the future. In addition, the company’s construction in progress (capacity planning) in 2022q1 reached 833 million yuan, an increase of 254% over the same period last year, reflecting the company’s future demand trend. In addition, the company plans to further increase capital expenditure in 2022, which will rapidly improve the R & D and production capacity of cdmo and API, so as to meet the needs of customers to the greatest extent, so as to help the long-term growth of the company’s performance.
Investment suggestion: the company has an integrated platform of “API + Preparation” and a “one-stop” customized R & D and production service of pharmaceutical intermediates and APIs, with a broad market space in the future. We estimate that the operating revenue from 2022 to 2024 will be RMB 9.953 billion, RMB 12.063 billion and RMB 15.151 billion respectively, and the net profit attributable to the parent company will be RMB 1.132 billion, RMB 1.407 billion and RMB 1.760 billion respectively, corresponding to 21, 17 and 13 times of PE respectively, maintaining the “recommended” rating.
Risk warning: overseas export risk, and the promotion of cdmo business is less than expected risk.
