\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 047 Sino Biological Inc(301047) )
Event: on April 28, 2022, the company released the first quarterly report of 2022. 22q1 achieved operating revenue of 176 million yuan, a year-on-year decrease of 61.49%, net profit attributable to parent company of 114 million yuan, a year-on-year decrease of 65.61%, and net profit attributable to non parent company of 94 million yuan, a year-on-year decrease of 70.90%.
The fall of covid-19 product demand has led to pressure on short-term performance. The apparent performance of 22q1 company decreased, mainly due to the natural decline in the demand for covid-19 virus related recombinant proteins, antibodies and other products with the gradual easing of the overseas epidemic. With the mitigation of covid-19 prevention and control situation in China, we expect that the company's conventional business is expected to usher in rapid growth in the future, and the proportion of conventional business is expected to increase steadily, driving the improvement of overall performance.
The reduction of covid-19 business leads to the decrease of scale effect, resulting in the increase of expense rate during the period. In the first quarter of 2022, the company's sales expense rate was 16.58%, with a year-on-year increase of 12.14pp, the management expense rate of 10.46%, a year-on-year increase of 7.71pp, the R & D expense rate of 6.31%, a year-on-year increase of 4.61pp, the financial expense rate of -7.40pp, a year-on-year decrease of 7.78pp, and the overall period expense rate was 25.94%, with a year-on-year increase of 16.68pp. The increase in the expense rate was mainly due to the weakening of the scale effect caused by the reduction, The significant decrease in the financial expense rate is mainly due to the impact of interest income generated by the increase in monetary funds. In the future, with the continuous increase in the proportion of the company's conventional business, we expect the expense rate to remain stable.
Continue to increase investment in sales and R & D to inject power into medium and long-term growth. 22q1 company's sales expenses were 29.15 million yuan, a year-on-year increase of 43.94%, and R & D expenses were 11.1 million yuan, a year-on-year increase of 42.97%; The company has strengthened the construction of local customer service and logistics centers in China's Yangtze River Delta, Pearl River Delta and other biomedical industry intensive areas, expanded the scale of market sales and support team, continuously expanded customer coverage and improved service quality; At the same time, accelerate the preparation of membrane protein (R & D process exploration stage), nano antibody (experimental process verification stage), phosphorylated monoclonal antibody (multiple antibodies have been obtained), dry powder culture medium and other cutting-edge projects, and constantly explore new markets, so as to provide a good foundation for the sustained and rapid growth of the company's performance.
Profit forecast and investment suggestions: we estimate that the company's operating revenue from 2022 to 2024 will be 791, 856 and 1091 million yuan, with a year-on-year increase of - 18%, 8% and 27%, and the net profit attributable to the parent company will be 498, 490 and 555 million yuan, with a year-on-year increase of - 31%, - 3% and 13%, corresponding to EPS of 385, 379 and 430. At present, the share price corresponds to 29 times PE in 22 years. Considering that the company has industry-leading recombinant protein development platform technology, it is expected to maintain a high growth trend and maintain a "buy" rating in the future.
Risk warning events: risk of new product research and development, risk of policy change, risk of intensified market competition, risk of delayed information or untimely update of the public data used in the research report, and high uncertainty in the sales of epidemic virus related products may lead to the risk of performance decline.
