\u3000\u3 Shengda Resources Co.Ltd(000603) 127 Joinn Laboratories (China) Co.Ltd(603127) )
Event: Joinn Laboratories (China) Co.Ltd(603127) released the first quarterly report of 2022. The company achieved operating income of 271 million yuan, a year-on-year increase of 34.82%; The net profit attributable to the parent company was 125 million yuan, a year-on-year increase of 34.27%; The net profit after non deduction from the parent company was 132 million yuan, an increase of 66.65% year-on-year.; The company’s annual net operating cash flow was 74.91 million yuan, a year-on-year increase of 117.23%.
Comments:
The gross profit margin and net profit margin attributable to the parent company fluctuated slightly. In 2022q1, the company’s comprehensive gross profit margin was 51.69%, with a year-on-year increase of 0.11pp; The net interest rate attributable to the parent company was 46.26%, a year-on-year decrease of 0.19pp; The net interest rate after deduction of non parent company was 48.84%, with a year-on-year increase of 9.33pp; The net interest rate of the company is greatly affected by the loss of 14.47 million yuan (0 yuan in the same period last year) from changes in fair value caused by Changchun Bcht Biotechnology Co(688276) valuation changes and 2.58 million yuan (17.22 million yuan in the same period last year) from government subsidies.
Capacity and orders provide long-term high growth momentum. In 2022q1, strong demand continued to bring high orders. The newly signed orders exceeded 1 billion yuan, a year-on-year increase of more than 65%, and the orders on hand exceeded 3.6 billion yuan. In order to match the high growth orders, the company continued to invest in the construction of production capacity. According to the annual report of 2021, it invested about 7500m2 of breeding facilities in Zhaoyan, Suzhou in 2021, and completed the decoration and filing of 1800m2 P2 level laboratory; Suzhou Zhaoyan phase II starts expansion (about 20000m2, mainly feeding facilities), and H2 is expected to be put into use in 2022; The renovation of Wuxi drug release center is under evaluation; Guangzhou Zhaoyan safety assessment base was started in October 2021 and is under construction; In the same year, Zhaoyan California newly renovated a test facility of about 6000m2.
On the same day, two acquisitions and H-share equity incentive were announced to enhance comprehensive strength in an all-round way. On April 28, 2022, the company also announced: 1) to acquire 100% equity of Yingmao biology with RMB 830 million; 2) Acquire 100% equity of Weimei biology with 975 million yuan; The two acquisitions can expand and enhance the business capacity of upstream experimental models, reduce supply side risks and improve comprehensive service capabilities. On April 28, 2022, the company announced the H-share incentive plan. With the A-share equity incentive, the company continued to improve the cohesion of core teams at home and abroad.
Profit forecast and investment rating: we expect the company’s operating revenue to be RMB 2.125/2.872/3.794 billion from 2022 to 2024, with a year-on-year increase of 40.1% / 35.1% / 32.1%; The net profit attributable to the parent company was 733 / 953 / 1239 million yuan respectively, with a year-on-year increase of 31.6% / 29.9% / 30.0%, corresponding to 48 / 37 / 28 times of PE from 2022 to 2024.
Risk factors: increased industry competition, loss of core technical personnel, decline in pharmaceutical R & D investment or outsourcing rate, and the progress of new business is less than expected
