\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 57 Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) )
Key investment points
Event: the company released the annual report of 2021 and the first quarterly report of 2022, and achieved an operating revenue of 810 million yuan in 2021, with a year-on-year increase of 27%; The net profit attributable to the parent company was 340 million yuan, a year-on-year increase of 21.4%; The net profit attributable to the parent company after non deduction was 320 million yuan, a year-on-year increase of 20.8%. In the first quarter of 2022, the operating revenue was 200 million yuan, with a year-on-year increase of 20%; The net profit attributable to the parent company was 90 million yuan, a year-on-year increase of 30.2%; The net profit attributable to the parent company after non deduction was RMB 80 million, with a year-on-year increase of 27.7%.
The performance growth is in line with expectations, and R & D efforts continue to increase. On the whole, the company's performance continued to accelerate in the first half of 2021. Superimposed on the low base effect in the first half of 2020, 2021h1 ushered in high growth and entered the second half of the year. Due to the epidemic in some regions, the performance was affected to some extent, but it still maintained a relatively good growth throughout the year. In 2021, the R & D expense ratio reached 13.6%, which increased greatly, resulting in the company's profit growth rate being lower than the revenue growth rate.
Artemisia pollen drops began to contribute income and is expected to become a new growth point. In 2021, the company's core product under development, Artemisia annua drops, obtained the drug registration certificate, and achieved an income of more than 3.6 million yuan in 2021. Artemisia annua drops is mainly applicable to adult patients with allergic rhinitis (or conjunctivitis) caused by Artemisia annua / Artemisia annua pollen allergy. At present, the number of people with pollen allergy in China is large, and the allergy rate is high in the north and low in the south. After listing, Artemisia annua drops will mainly face the allergy market in northern China, which will complement the company's dust mite drops, improve the company's business performance and strengthen the company's leading position in the field of desensitization diagnosis and treatment in China.
Desensitization treatment has a broad market space, and dust mite drops are expected to grow rapidly for a long time. The incidence rate of allergic diseases is high. China's huge population base determines that there are many patients in China. Although the penetration rate of desensitization drugs is less than 2% due to factors such as insufficient market awareness, short clinical application time and late promotion, desensitization treatment can change the natural process of allergic diseases. With the continuous improvement of clinicians' awareness, the market space of desensitization treatment is broad. The sales revenue of the company's leading product "dust mite drops" has continued to grow rapidly since its listing, with a sales revenue of more than 600 million yuan in 2020. At present, there are only three kinds of desensitization drugs listed in China. As the only sublingual desensitization drug, it has obvious advantages in safety, convenience and compliance, and is expected to maintain rapid growth.
Profit forecast and rating. Desensitization treatment has a broad market space. The company is a leading enterprise in the field of desensitization diagnosis and treatment in China, with strong product competitiveness and outstanding sales capacity. At the same time, the company has rich product pipelines and sufficient driving force for future performance growth. We expect that the EPS from 2022 to 2024 will be 0.78 yuan, 0.97 yuan and 1.24 yuan respectively, corresponding to the current stock price valuation of 41 times, 33 times and 26 times respectively, maintaining the "buy" rating.
Risk warning: sales are less than expected; R & D is less than expected risk.
