\u3000\u3 Bohai Water Industry Co.Ltd(000605) 116 Aurisco Pharmaceutical Co.Ltd(605116) )
Event: the company released the 2021 annual report and the first quarterly report of 2022. In 2021, the operating revenue was 803 million yuan, a year-on-year increase of 11.36%, the net profit attributable to the parent was 169 million yuan, a year-on-year increase of 7.30%, and the non net profit deducted was 163 million yuan, a year-on-year increase of 7.47%; In the first quarter of 2022, the operating revenue was 219 million yuan, a year-on-year increase of 17.44%, and the net profit attributable to the parent company was 408527 million yuan, a year-on-year increase of 25.42%, deducting 386475 million yuan of non net profit, a year-on-year increase of 42.66%.
Core products perform well, and continuous investment lays the foundation for medium and long-term growth. In 2021, the company’s performance continued to grow, including Q4 revenue of 214 million yuan (year-on-year + 20.48%, the same below), net profit attributable to the parent company of 35.2 million yuan (+ 106.82%), net profit deducted from non net profit of 34.2 million yuan (+ 116.87%), mainly driven by the rapid growth of core products such as women’s health (didroxyprogesterone), respiratory system (fluticasone propionate) and anti-tumor products (abiraterone acetate); The growth rate of the profit side is slower than that of the income side, mainly due to the rapid increase of expenses caused by continuous R & D, personnel and production capacity investment. Among them, the R & D investment is 69.35 million yuan (+ 46.46%), the revenue accounts for 8.63% (+ 2.07pp), the management expense is 106 million yuan (+ 45.76%), and the revenue accounts for 13.23% (+ 3.12pp). Looking forward to 2022, driven by the continuous high volume of core varieties, the company’s performance is expected to continue the rapid growth trend.
Sub business: core products drive the continuous growth of API, and the harvest of preparations is imminent. API: in 2021, the income of women’s health was 166 million yuan (year-on-year + 470.39%), and didroxyprogesterone formed quantitative sales; The respiratory system revenue was 153 million yuan (+ 3.42%), and the API sales of fluticasone propionate increased by 173.25% year-on-year, mainly due to the approval of the company as a supplier of hikma and Apotex and the development of new customers in the Turkish market; Nervous system revenue was 83.47 million yuan (+ 51.69%), mainly due to the growth of customer and market demand. At the same time, affected by the epidemic, India’s production capacity was limited. With the advantages of customers and quality, the company seized part of the international market share. Preparation: didroxyprogesterone tablets (unilateral) have been reported to CDE for approval and are expected to be the first imitation to be listed in China this year. The compound preparation is expected to be submitted for approval next year. Didroxyprogesterone is an integrated variety of API preparation of the company, with a good competition pattern. At present, only Abbott and Aurisco Pharmaceutical Co.Ltd(605116) have the ability of commercial production of API. With the advantage of API preparation integration, the company is expected to share a huge market with the original research.
Expense rate: the large volume of core products drives the increase of gross profit margin, and the investment in R & D and personnel continues to increase. Gross profit margin: the gross profit margin of 2021 and 2022q1 are 49.13% (+ 1.88pp) and 55.66% (+ 12.87pp) respectively. The increase of gross profit margin mainly comes from the rapid volume of core varieties such as didroxyprogesterone. Expense ratio: in 2021, the sales expense ratio is 3.70% (+ 0.74pp), the management expense ratio is 13.23% (+ 3.12pp), and the financial expense ratio is 0.04% (- 1.66pp). The increase of management expense ratio is mainly due to the increase of personnel salary, environmental protection expenses and depreciation expenses, and the decrease of financial expense ratio is mainly due to the stabilization of RMB exchange rate and the decrease of exchange loss compared with the same period last year; The three expense rates of 2022q1 tend to be stable. R & D Investment: R & D expenses in 2021 and 2022q1 are 69.35 million yuan (+ 46.46%) and 32.18 million yuan (+ 176.22%) respectively, accounting for 8.63% (+ 2.07pp) and 14.71% (+ 8.45pp) respectively. The company continues to increase R & D investment and orderly promote various R & D projects. At present, 23 products are in the R & D stage. In addition to small molecular chemical drugs, the company actively arranges oligonucleotide drugs and polypeptide drugs to create new performance growth points in the future.
Profit forecast and investment suggestions: according to the latest performance announcement, taking into account the impact of the epidemic and the increase in the depreciation expenses of the company’s continuous investment in R & D and new production capacity, we adjusted the profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 1.056, 1.334 and 1.644 billion yuan (1.143 and 1.471 billion yuan before the adjustment in 2022 and 2023), with a year-on-year increase of 31.50%, 26.23% and 23.29%. The net profit attributable to the parent company was 215, 281 and 368 million yuan (236 and 312 million yuan before the adjustment in 2022 and 2023), with a year-on-year increase of 27.36%, 30.84% and 30.79%. The current share price corresponds to 42 / 32 / 25 times of PE from 2022 to 2024. Considering the company’s solid technology and continuous development of key varieties, the declared large varieties have broad market prospects, rich reserve projects, long-term thickening performance of raising investment and expanding production capacity, and actively extend to the cro / cdmo field of preparations, peptides and small nucleic acid drugs, open up growth space and maintain the “buy” rating.
Risk prompt event: risk of new product and new process development; International trade environment change risk; Environmental protection and safety production risks; Exchange rate fluctuation risk; There is a risk that the public information is delayed or not updated in time.
