\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 25 Pharmablock Sciences (Nanjing) Inc(300725) )
Pharmablock Sciences (Nanjing) Inc(300725) issue the 2021 annual report. In 2021, the company realized an operating revenue of 1.201 billion yuan, with a year-on-year increase of 17.55% (an increase of 22.22% under constant exchange rate); The net profit attributable to the parent company was 487 million yuan, a year-on-year increase of 164.14%; Deduct non net profit of RMB 233 million, with a year-on-year increase of 34.24%. Looking at Q4 alone, the company achieved a revenue of 299 million yuan, a year-on-year increase of 0.64%; The net profit attributable to the parent company was 44 million yuan, a year-on-year increase of 5.53%; Deduct non net profit of 32 million yuan, down 17.43% year-on-year.
Pharmablock Sciences (Nanjing) Inc(300725) released the first quarter report of 2022. In 2022, Q1 company realized an operating revenue of 336 million yuan, with a year-on-year increase of 17.44% (an increase of 19.58% under constant exchange rate); The net profit attributable to the parent company was 71 million yuan, a year-on-year increase of 1.53%; Deduct non net profit of 65 million yuan, with a year-on-year increase of 0.88%.
Revenue has improved quarter by quarter, Q1 has reached a new high, and the profit side is affected by the exchange rate and expenses. It is expected to go further after the production capacity is put into operation. For the whole year of 2021, the revenue and profit are near the median value of the forecast, which is in line with the expectation. On the revenue side, the delivery cycle of a single major customer’s commercial project had a phased impact on revenue, with a growth rate of 52.24% (constant exchange rate growth rate of 56.81%). Q1-4 is 290 million, 340 million, 280 million and 300 million respectively. The single quarter income of q3-4 is mainly affected by the shutdown caused by Shangyu epidemic. On the profit side, the annual profit after deducting the changes in fair value of Huishi is 264 million yuan (+ 43.47%), which is in line with the expectation; Q4 single quarter is mainly affected by the temporary impact of exchange (we estimate that it is 15-20 million yuan), bonus & sales commission and other expenses (we estimate that it is nearly 10 million yuan), and the apparent profit has been tightened. After adding back, it was about 70 million yuan, an increase over Q3 (61 million yuan). The volume of Huishi is rapid. In 2020, Huishi will have almost no profit. In 2021, Huishi will have a revenue of 316 million and a net profit of 37.35 million. In 2022q1, the revenue side still has the impact of the order delivery cycle of major customers, and the revenue growth rate is 38.45% after excluding it. On the profit side, there are large exchange gains in 21q1, and the net profit growth rate in Q1 after deduction is 14.85%. In the case of tight production capacity, it still achieved steady growth. The highlights of the annual report are as follows:
The diversion effect of front-end business is obvious, and cdmo business is developing rapidly. Cdmo business realized a revenue of 455 million yuan (+ 33.48%), accounting for 37.89%; In recent three years, 513 customers have transferred from molecular block business below kilogram level to CMC business cooperation above kilogram level and deeper;
The gross profit margin has increased. In 2021, the company’s overall gross profit margin was 48.13%, an increase of 2.34pp compared with 45.79% in the same period in 2020;
API project became the breakthrough of cdmo business in 2021. It has undertaken 40 API projects (6 in clinical phase III and above), 2 US DMF & 3 Chinese api registration applications, and 15 API projects from European and American customers;
Positive customer development. 144 end customers above kilogram level (only including pharmaceutical companies and small and medium-sized innovative drug companies outside China), with a year-on-year increase of 15.5%; 58 customers with sales of more than 5 million, a year-on-year increase of 28%. By the end of 2021, the company had reached cooperation with almost all of the world’s top 20 pharmaceutical companies and hundreds of small and medium-sized biotechnology companies, and served more than 1800 customers in the past three years.
Continuous construction of production capacity. Nanjing new R & D center, American pharmaceutical stone process development & GMP kg laboratory and Zhejiang Huishi workshop have been continuously promoted to break the production bottleneck and improve the company’s integrated R & D and production service capacity. The core competitiveness of the company is to realize cash realization in different directions based on the understanding of R & D trends and chemical technology. Based on molecular blocks, consolidate the cdmo business layout, improve the drug discovery technology service platform, and comprehensively improve the one-stop service capacity of new drug discovery, development and commercialization.
Profit forecast and investment rating. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 378 million yuan, 544 million yuan and 762 million yuan respectively, with an increase of – 22.4%, 43.9% and 40.1% respectively. EPS is 1.89 yuan, 2.72 yuan and 3.81 yuan respectively, and the corresponding PE is 36x, 25X and 18x respectively, maintaining the “buy” rating.
Risk warning: the epidemic affects the production capacity and delays the production; The implementation of macromolecular cdmo strategy is lower than the expected risk, etc.
