\u3000\u3 Shengda Resources Co.Ltd(000603) 127 Joinn Laboratories (China) Co.Ltd(603127) )
Event:
The company released the first quarterly report of 2022. During the reporting period, the revenue was 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 deducted from non parent company was 132 million yuan, with a year-on-year increase of 66.65%, and the performance growth slightly exceeded our expectations.
Comments:
The performance is bright, and the revenue and profit side maintain rapid growth
In 2022q1, the revenue side of the company has maintained rapid growth. We expect that the main reason is that the demand for non clinical safety assessment business continues to rise. In 2022q1, the newly signed orders of the company exceeded 1 billion yuan, with a year-on-year increase of more than 65%, and the business expansion continued to develop; By the end of the first quarter, the amount of orders on hand of the company exceeded 3.6 billion yuan, fully ensuring the growth of short-term performance. The profit side of the company maintained high growth, and the loss of Changchun Bcht Biotechnology Co(688276) fair value change was about 14.47 million yuan. After excluding the unrealized income from fair value change of biological assets and the impact of raised funds from Hong Kong stocks, the net profit deducted from non attributable assets of the company increased by 253.40% year-on-year, which was much higher than that of the income side, and the profitability was further improved.
Accelerate the layout of upstream experimental model business, and continue to promote the construction of new production capacity
The company announced that it plans to acquire 100% equity of Yingmao biology and Weimei biology, further enhance the strategic reserve of non-human primate experimental models, ensure the supply of raw materials and cost control of safety assessment business, and promote the coordinated development of multiple businesses of the company and enhance its anti risk ability. In 2022, the company continued to promote the construction of new production capacity. A number of projects such as the phase II project of about 20000 square meters in Suzhou Zhaoyan, the laboratory of about 3000 square meters in Wuxi drug release evaluation center and the safety evaluation bases in Guangzhou and Chongqing are under construction. It is expected to drive the medium and long-term business growth of the company after completion.
Profit forecast and rating
The company has a solid leading position in the field of safety assessment in China, and its overseas layout and new business expansion are expected to open up room for performance improvement. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 739 / 958 / 1220 million respectively, and PE to be 51 / 40 / 31 times respectively. Considering the company’s existing orders and capacity advantages, the animal capacity of the new acquisition model is expected to bring greater performance flexibility. The company is given 60 times PE in 2022, corresponding to the target price of 116.22 yuan, maintaining the “overweight” rating.
Risk tips
Covid-19 epidemic risk; Tight supply of laboratory animals and risk of price rise; The risk of stricter regulatory policies in the pharmaceutical industry; Risk of increased competition in cro industry; Social responsibility risk; New business expansion and overseas layout are less than expected risks.
