\u3000\u3 Shengda Resources Co.Ltd(000603) 259 Wuxi Apptec Co.Ltd(603259) )
Event: the company released the first quarterly report of 2022, realizing an operating revenue of 8.47 billion yuan, a year-on-year increase of 71.2%; The net profit attributable to the parent company was 1.64 billion yuan, a year-on-year increase of 9.5%; The net profit attributable to the parent company after non deduction was 1.71 billion yuan, a year-on-year increase of 106.5%; After adjustment, the net profit of non IFRS was 2.05 billion yuan, a year-on-year increase of 85.8%.
The performance grew rapidly, and the growth rate of profit side exceeded that of revenue. In 2022q1, the revenue side of the company maintained a high growth, and the net profit attributable to the parent company was greatly affected by the investment income and the income from changes in fair value. Excluding the non recurring impact, the net profit attributable to the parent company after deducting non recurring impact in 2022q1 and the adjusted non IFRS net profit attributable to the parent company increased by 106.5% and 85.8% respectively, and the profit growth rate exceeded the income growth rate. Relying on the advantages of the whole industrial chain, the company continues to improve its profitability and promote the revenue side and profit side to achieve more than expected growth.
The five business segments make concerted efforts, and the small molecule cdmo business is the main driving force of performance. In 2022q1, the revenue of chemical business was 6.12 billion yuan (+ 102.1%), of which the revenue of small molecule drug discovery was 1.74 billion yuan (+ 46.6%), and the revenue of process R & D and production was 4.37 billion yuan (+ 138.1%). The reasons are as follows: 1) strong customer stickiness and strong growth performance of long tail customers; 2) Strong demand for orders: 217 new molecules were added to the chemical drug process R & D and production pipeline in 2022q1; 3) Accelerate capacity expansion: Changshu plant for API production will be put into operation in 2022q1, and Changzhou phase III plant for GMP production will be put into operation successively, including one R & D center and two production workshops. The strong development of chemical business in the first quarter laid a solid foundation for the company’s annual goal of “doubling chemical business revenue in 2022”.
Cell and gene therapy ctdmo business grew rapidly and became a new performance growth point. 2022q1 cell and gene therapy ctdmo business revenue of 300 million yuan (+ 37%). As of 2022q1, the business segment has provided development and production services for 74 projects, including 59 preclinical and phase I clinical trials, 7 phase II clinical trials and 8 phase III clinical trials. In March 2022, the company released Tessa ™ Technology to further expand the production scale of cell and gene therapy. As of 2022q1, the company has 14 Tessa ™ Evaluate the project. With the continuous production of Shanghai Lingang Holdings Co.Ltd(600848) new capacity in Philadelphia and Shanghai Lingang Holdings Co.Ltd(600848) in the United States, it is expected that the ctdmo business of cell and gene therapy will maintain a high growth trend, and the business is expected to exceed the growth rate of the industry in 2022.
Profit forecast and rating. We expect that the EPS from 2022 to 2024 will be 2.62 yuan, 3.48 yuan and 4.48 yuan respectively, corresponding to the current stock price valuation of 37 times, 28 times and 22 times respectively, maintaining the “buy” rating.
Risk warning: the order is not as expected; The extended expansion is less than the expected risk.
