\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 57 Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company’s revenue was 808 million yuan, a year-on-year increase of + 26.95%; The net profit attributable to the parent company was 338 million yuan, a year-on-year increase of + 21.38%; Deduct the net profit not attributable to the parent company of 316 million yuan, a year-on-year increase of + 20.78%. The profit distribution plan is to distribute a cash dividend of 2.01 yuan (including tax) for every 10 shares.
In 2022q1, the company’s revenue was 198 million yuan, a year-on-year increase of + 20.0%, the net profit attributable to the parent was 92 million yuan, a year-on-year increase of + 30.21%, and the net profit not attributable to the parent was 77 million yuan, a year-on-year increase of + 27.7%.
The performance of 22q1 exceeded expectations and the performance of 21 years met expectations. In the first quarter of 2022, in the case of severe covid-19 epidemic in many urban areas in China, the company still achieved steady growth of 20% on the revenue side and rapid growth of 30% on the profit side, exceeding our previous expectations. The company’s performance in the past 21 years has been disclosed in the previous performance express, which is in line with expectations. We judge that the reason why the performance of 22q1 exceeded expectations is that the company has improved its operation and management. On the premise of ensuring R & D investment, the profit margin has been further improved by reducing the intermediate expenses of management expenses and sales expenses.
Dust mite sales gradually returned to normal. In 2021, the company’s dust mite revenue was 796 million yuan, a year-on-year increase of + 26.15%; The sales volume was 9.16 million, with a year-on-year increase of + 27.3%, and the growth rate has returned to the normal level. From the quarterly trend, the overall revenue growth of 21q3-22q1 company is 17.5%, 29.5% and 20.0% respectively. Although the 22q1 epidemic may have a certain impact on the company’s revenue, the impact is not as bad as that in 2020. After the follow-up epidemic is further controlled, the growth revenue of Artemisia annua is expected to be further improved.
Artemisia annua accelerated coverage, and the supplementary indications for children have been accepted. In 2021, the income of Artemisia annua drops was 3.67 million yuan, and the scale was still small. According to the investor relations record form previously announced by the company, the company’s Artemisia annua powder drops began to be distributed to the market in early May of 21. Considering the time required for bidding, hanging the net, entering the hospital and promotion of Artemisia annua, Artemisia annua is expected to start in large quantities from 22 years. In addition, in January 2022, Artemisia annua completed the phase III clinical trial of children’s rhinitis, and the drug supplement application for expanding the population with children’s indications was officially accepted in February. After the children’s indications are approved, the volume rate of Artemisia annua is expected to be further accelerated.
The growth rate of prick diagnostic reagents has accelerated, and the variety line has been continuously enriched. In 2021, the company’s revenue from prick diagnostic reagents was 4.78 million yuan, a year-on-year increase of + 98.5%. From December 2021 to January 2022, the marketing applications of “Artemisia annua pollen pricking solution”, “birch pollen pricking solution”, “allergen skin pricking test control solution” and “Humulus pollen pricking solution” were accepted, and the product lines of subsequent pricking diagnostic reagents are expected to be enriched rapidly.
Continue to maintain high investment in R & D, increase capital, and expand the business scope of Keyi pharmaceutical. In 2021, the total R & D investment of the company was 102 million yuan, accounting for 12.63% of the revenue, including 51 million yuan for stem cells and 11 million yuan for natural drugs. In 2022, the company’s human hair follicle mesenchymal stem cell therapeutic drugs have started the formal application of filed clinical research, and the proposed indications are the treatment of osteoporosis and osteopenia; In August 21, the company increased the equity ratio of Kaiyi medicine (Research and development of asthma and COPD drugs, and the clinical application of class 1 new drug kudingsaponin a solution) from 19.9% to 35.0% through capital increase, and continued to increase investment in the field of natural drugs.
Profit forecast: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 440 million yuan, 560 million yuan and 720 million yuan respectively, with the corresponding growth rate of 29.2%, 28.5% and 28.5%, EPS of 0.83 yuan, 1.07 yuan and 1.38 yuan respectively. The current stock price corresponds to PE of 38 / 30 / 23x, maintaining the “buy” rating.
Risk warning: the product structure is relatively single; Drug bidding and price reduction; The dosage of Artemisia annua powder drops was lower than expected; Risks such as intensified market competition; Covid-19 epidemic has repeatedly disturbed performance.
