\u3000\u3000 Hangzhou Tigermed Consulting Co.Ltd(300347) (300347)
Key investment points
2021q4 profit side slightly exceeded our expectations
In 2021, the net profit attributable to the parent company will be RMB 2.625-3.027 billion (YoY 50% – 73%), deducting non net profit of RMB 1.133-1.324 billion (YoY 60% – 87%). According to the median value, the annual net profit attributable to the parent company in 2021 was RMB 2.826 billion (yoy61%), with non net profit deducted of RMB 1.229 billion (yoy74%), the net profit attributable to the parent company in 2021q4 was RMB 1.046 billion (yoy142%), with non net profit deducted of RMB 360 million (yoy70%), and the net profit attributable to the parent company and non net profit deducted in 2021 exceeded our previous forecast.
The higher than expected net profit attributable to the parent company in 2021 is mainly due to the positive correlation between the investment income recognized in Q4 and the fair value. The performance forecast shows that the amount of non recurring profit and loss in 2021 is about 1.4-1.8 billion (mainly driven by the fair value income of 1.2-1.6 billion), and the non recurring profit and loss in Q4 reaches 688 million (calculated according to the median value). We expect that the higher than expected non net profit of Q4 deduction may mainly come from the continuous recognition of major clinical business income such as covid-19. Considering that 21q4 exchange is still a partial drag on overseas income based businesses, the growth rate of net profit after deducting exchange fluctuations may be higher.
We are optimistic about the continuation of high profit growth in 2022 and maintain the recommendation
We continue to be optimistic about the continued high growth in the number of innovative drugs ind in China from 2020 to 2021, resulting in the continued high prosperity of the company’s orders, which is expected to drive the company’s revenue side and profit side to maintain a high growth trend. In addition, we are also optimistic that the continuous improvement of the company’s ability in the transition stage of international business expansion will bring performance flexibility, and we are optimistic that the profit side will continue the high growth trend in 2022.
Profit forecast and valuation
Considering that the company’s income from changes in fair value in 2021q4 exceeded our expectations, we raised our profit forecast for 2021. We expect the company’s EPS to be 3.15, 3.81 and 4.63 yuan / share from 2021 to 2023. The closing price on January 12, 2022 corresponds to 31 times of PE in 2022 (26 times of PE in 2023), which is still relatively undervalued and maintains the “buy” rating.
Risk tips
The risk of deterioration of investment and financing of innovative drugs, the risk of fluctuation of clinical trial policies, the risk of new business integration falling short of expectations, and the risk of performance falling short of expectations
