\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 47 Hangzhou Tigermed Consulting Co.Ltd(300347) )
Key investment points:
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 1.818 billion and RMB 518 million respectively, with a year-on-year increase of 101.55% and 13.82% respectively; The non net profit deducted was 378 million yuan, a year-on-year increase of 65.31%. The performance is in line with expectations.
Comments:
New orders have boosted revenue. In the first quarter of 2022, the company’s main business continued to grow steadily. According to the main operating data from January to February previously disclosed by the company, the revenue in the first two months increased by more than 100% year-on-year, and the newly signed orders increased by more than 65% year-on-year. It is expected that the revenue in March will continue the trend of significant increase in the first two months, mainly due to the increase in the revenue of the company’s clinical trial technical services, clinical trial related services and laboratory services. In the first quarter, the growth rate of the company’s net profit was less than that of revenue, mainly because the net income from changes in fair value decreased by 71.44% year-on-year, mainly due to the decrease in the income from changes in fair value generated by the company’s other non current financial assets.
Abundant orders are in hand and continue to promote capacity construction. The newly signed contract amount of the company in 2021 was 9.645 billion yuan, a year-on-year increase of 74.22%; By the end of 2021, the total amount of contracts to be executed by the company was RMB 11.405 billion, a year-on-year increase of 57%. It is expected that new orders will maintain a high increase in the first quarter of 2022. By the end of the first quarter of 2022, the company’s contract liabilities were 836 million yuan, a year-on-year increase of 34%. The company continues to expand production capacity. By the end of the first quarter, the company’s projects under construction were 258 million yuan, a year-on-year increase of 155%.
Continue to promote global expansion. The company currently conducts business in Asia Pacific, North America, Europe, Latin America and Africa. By the end of 2021, the company has more than 1000 professional teams in more than 50 overseas countries, which can provide various clinical trial technical services, clinical trial related services and laboratory services, covering major continents. By the end of 2021, the company had conducted 132 single regional clinical trials abroad (mainly including South Korea, Australia and the United States); There are 50 multi regional clinical trials in Asia Pacific, North America, Europe, Africa and Latin America, involving treatment fields, including tumors, vaccines, central nervous system, cardiovascular diseases and rare diseases.
Investment suggestion: the company is the leader of clinical cro in China. It continues to consolidate its leading position and is expected to maintain rapid growth in the future. It is estimated that the company’s earnings per share from 2022 to 2023 will be 3.84 yuan and 4.64 yuan respectively, and the current share price corresponding to PE will be 23 times and 19 times respectively, maintaining the “recommended” rating of the company.
Risk tip: market competition intensifies, performance growth is less than expected, upstream R & D investment decreases, brain drain, etc.
