\u3000\u3 Guocheng Mining Co.Ltd(000688) 202 Shanghai Medicilon Inc(688202) )
Event overview
The company announced the first quarterly report of 2022: the operating revenue was 356 million yuan, with a year-on-year increase of 65.79%, the net profit attributable to the parent was 77 million yuan, with a year-on-year increase of 71.09%, and the net profit deducted was 75 million yuan, with a year-on-year increase of 71.82%.
Analysis and judgment:
The performance slightly exceeded market expectations, and the high outlook of China’s industry continued
Taking into account the covid-19 epidemic in Shanghai since the middle of the year and the large-scale city closure and control at the end of March, the company achieved an operating revenue of 356 million yuan in 22q1, with a year-on-year growth rate of 65.79%, and the performance slightly exceeded the market expectation. The net profit attributable to the parent company was 71 million yuan, a year-on-year increase of 71.09%, slightly higher than the growth rate at the revenue end. We judged that the main reasons were (1) benefiting from the high demand of Chinese cros and the continuous development of overseas markets, the new orders signed in 2021 increased by 2.452 billion yuan, a year-on-year increase of 87.7%; (2) In 2021, the company acquired 8.16% minority equity of its subsidiary Shanghai Medicilon Inc(688202) Puya, which was 100% controlled after the acquisition. Looking forward to the next three years, based on the company’s continuous deep cultivation of the Chinese market and the continuous development of overseas markets, we judge that the performance of the company’s safety assessment business, drug discovery and research business will continue to show ultra-high growth.
Performance forecast and investment suggestions
As a scarce target of preclinical integration in China, looking forward to the next 5-10 years, the company will continue to cultivate drug discovery + CMC + preclinical research business, continue to benefit from the high prospect of the Chinese market, the continuous expansion of overseas markets and the continuous landing of CMC business, and is expected to become one of the leaders of preclinical cro in China looking forward to the world. Maintain the early-stage profit forecast, that is, the revenue from 2022 to 2024 is RMB 19.93/30.87/4.610 billion, the EPS is RMB 7.83/12.04/17.96, corresponding to the closing price of RMB 376.02/share on April 28, 2022, and the PE is 48.00/31.23/20.94 times respectively, maintaining the “buy” rating.
Risk tips
The company’s order demand is lower than expected, the production of the raised investment project is lower than expected, the risk of core technical backbone and management loss, the risk of intensified competition, and the impact of the novel coronavirus epidemic.
