\u3000\u3 Shengda Resources Co.Ltd(000603) 127 Joinn Laboratories (China) Co.Ltd(603127) )
Key investment points
Event: the company released the first quarterly report of 2022. In the first quarter of 2022, the company achieved total operating revenue and net profit attributable to the parent company of RMB 271 million and RMB 125 million respectively, with a year-on-year increase of 34.82% and 34.27% respectively; The net profit was RMB 3.26 billion, a year-on-year increase of 6.51%.
Comments:
Abundant orders in hand. In the first quarter of 2022, the new orders signed by the company exceeded 1 billion yuan, with a year-on-year increase of more than 65%. By the end of the first quarter, the amount of orders on hand of the company had exceeded 3.6 billion yuan, an increase of 24% over the end of 2021; Contract liabilities amounted to RMB 1.255 billion, with a year-on-year increase of 82% and an increase of 29% over the end of 2021. In 2021, the total amount of orders signed by the company exceeded 2.8 billion yuan, of which the total amount of orders undertaken by domestic companies exceeded 2.55 billion yuan, a year-on-year increase of about 65%; Overseas subsidiary biomere undertook orders of about 280 million yuan, a year-on-year increase of about 75%. The company has abundant orders on hand, which helps the company maintain rapid growth in performance.
Continue to expand production capacity. The company plans to complete the construction of 20000 square meters of facilities in phase II in 2022 and start the internal decoration. It is expected to be officially put into use in the second half of 2022 to make preparations for the growing business orders in the later stage in advance; Zhaoyan Yichuang (Suzhou) new drug research Co., Ltd., a newly established subsidiary, plans to lease about 9000 square meters of laboratory and complete the interior design and decoration by the end of 2022, including large and small animal rooms and laboratories, mainly carrying out drug screening and pharmacodynamics experiments, in order to expand the scope of business and improve the business flux. The drug release evaluation base in Zhaoyan, Wuxi is building about 3000 square meters of test facilities and is expected to be put into operation in the second half of 2022. In 2022, we will continue to promote the construction of Guangzhou Joinn Laboratories (China) Co.Ltd(603127) evaluation center and Chongqing Joinn Laboratories (China) Co.Ltd(603127) evaluation center.
Further expand the upstream experimental model business. The company plans to acquire 100% equity of Weimei biology and 100% equity of Yingmao biology with its own funds combined with H-share raised funds, with equity prices of 975 million yuan and 830 million yuan respectively. The main businesses of Weimei biology and Yingmao biology are experimental model breeding, breeding and sales. In 2021, the revenue was 80.47 million yuan and 58.01 million yuan respectively, and the net profit was 52.25 million yuan and 32.02 million yuan respectively. The acquisition will help the company to enhance the strategic reserve and cost control of key experimental models, reduce supply side risks, enhance business synergy, and improve the continuous service ability of the company’s non clinical cro.
Maintain recommended ratings. The company is the leader of preclinical cro in China. It continues to improve its service capacity and can grow in the future. It is estimated that the company’s earnings per share from 2022 to 2023 will be 1.91 yuan and 2.47 yuan respectively, and the current share price corresponding to PE will be 48 times and 37 times respectively, maintaining the “recommended” rating.
Risk tips: intensified industry competition, sharp fluctuation of exchange rate, brain drain, industry policy risk, etc.
