\u3000\u3 Guocheng Mining Co.Ltd(000688) 356 Jenkem Technology Co.Ltd(688356) )
Event overview
On April 27, 2022, Jenkem Technology Co.Ltd(688356) released the first quarterly report of 2022: the operating revenue was 101 million yuan, with a year-on-year increase of 44.23%; The net profit attributable to the parent company was 52 million yuan, with a year-on-year increase of 45.41%; The net profit deducted from non parent company was 43 million yuan, with a year-on-year increase of 23.08%.
The main business income maintained rapid growth, and the profit side was under short-term pressure due to the impact of R & D investment and equity payment
1) revenue side: the company’s main business revenue showed a rapid growth trend, including product sales revenue of 90 million yuan, a year-on-year increase of 41.63%, and technical service revenue of 11 million yuan, a year-on-year increase of 71.64%. Among the product sales revenue, the domestic sales revenue was 29 million yuan, with a year-on-year increase of 93.80%, mainly due to the increase of orders caused by the continuous large-scale product sales of major downstream customers; The export revenue was 62 million yuan, with a year-on-year increase of 25.90%. The growth rate was relatively moderate, mainly due to the extension of overseas delivery cycle caused by covid-19 epidemic.
2) profit side: in terms of gross profit margin, the gross profit margin of Q1 in 2022 was 86.38% (year-on-year + 1.37pct, month on month + 4.04pct), which was mainly due to the product structure, and the proportion of export products was relatively high. The net interest rate of Q1 in 2022 was 51.90% (year-on-year + 0.43pct, month on month + 14.50pct), mainly due to the increase in government subsidies and investment income received by the company. If excluding the impact of non recurring profits and losses, the deduction of non net interest rate was 42.83%, mainly due to the high R & D expenses and equity payment expenses.
We continued to invest heavily in research and development, and the three major projects under research were promoted in an orderly manner
In 2022, Q1 company invested 19 million yuan in R & D, with a year-on-year increase of 213.46%, and the R & D expense rate was 18.97%, maintaining a high level of R & D investment, mainly because the company continued to promote the self-developed polyethylene glycol irinotecan, jk-2122h and jk-1119i projects, actively deployed other R & D pipelines, and continued to invest in R & D talents, materials and equipment. In 2022, the sales expenses and management expenses of Q1 company were 05 million yuan and 11 million yuan respectively, and the rate of sales and management expenses were 5.03% and 10.71% respectively, maintaining at the normal expenditure level.
Actively expand the emerging application scenarios of PEG and derivatives, and the market imagination space is broad
The application field of PEG is in the stage of continuous and rapid expansion, which has expanded from macromolecular protein drug modification to small molecule drugs, LNPS delivery system, cytokines, nucleic acid drugs and so on. The company is one of the few well-known enterprises in the world that can provide high-purity and large-scale cGMP for the production of medical medicinal peg and derivatives, and actively cooperates with relevant domestic and foreign enterprises in emerging application scenarios. It is expected to fully grasp the unmet market demand brought by technological change and take the volume of revenue to a new level.
Investment suggestion: as the leader of China’s peg industry, with the continuous promotion of pipeline under research and the continuous enrichment of application scenarios, the future performance growth of the company is uncertain. Considering the impact of equity incentive expenses, we expect the company’s revenue to be RMB 487 / 660 / 882 million from 2022 to 2024, and the net profit attributable to the parent company to be RMB 239 / 329 / 444 million, corresponding to PE multiple of 40 ×/ twenty-nine ×/ twenty-two ×。 Maintain a “recommended” rating.
Risk warning: covid-19 epidemic situation in the world is repeated; Product development is not as expected; Risk of centralized purchase.
