\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 59 Pharmaron Beijing Co.Ltd(300759) )
Event summary
The company released the performance report for the first quarter of 2022: the operating revenue was 2.103 billion yuan, a year-on-year increase of 41.19%; Deduct the net profit not attributable to the parent company of 311 million yuan, with a year-on-year increase of 30.83%; After adjustment, the net profit attributable to the parent company of non IFRS was 364 million yuan, a year-on-year increase of 39.1%, and the performance growth was in line with expectations.
Key investment points
The advantages of laboratory services are maintained, and the technical platform is continuously upgraded
The company is the world’s top three preclinical cro service provider. Laboratory chemistry and Bioscience services have developed in a coordinated manner. The integrated clinical approval application (ind) package application service has been continuously recognized and continues to maintain the leading position in the industry. The laboratory service revenue in 2022q1 was 1.317 billion yuan, a year-on-year increase of 38.7%; The gross profit margin was 42%, up 1.13pp from the same period last year, mainly based on the expansion of revenue volume, the improvement of scale effect and the positive impact of RMB appreciation in the first quarter. As of 2021, the number of employees in the laboratory service sector of the company was 7136, with a year-on-year increase of 25.52%.
CMC service integration layout + capacity release, and the competitive advantage has been significantly improved
The CMC (cdmo) sector of the company has abundant capacity reserves. At the beginning of 2022, Shaoxing’s 200m3 capacity will be put into operation, and the remaining 400m3 capacity will be delivered in the middle of 2022; Acquired aesica pharmaceutical, a subsidiary of recipharm, located in cramlington, UK, realized small molecule cdmo end-to-end service in the UK, strengthened cdmo integrated platform + global layout, and significantly improved its competitive advantage. The revenue of CMC (cdmo) in 2022q1 was 462 million yuan, with a year-on-year increase of 51.4% and a gross profit margin of 28.65%, a decrease of 1.83pp compared with the same period last year, mainly due to the production of some production capacity in Shaoxing and the increase of fixed operating costs.
Clinical cro services are developed in coordination with foreign countries, and customers realize cross sales
The company’s clinical research service sector has built a global one-stop clinical service platform including clinical research, on-site management, regulatory biological analysis and radioactive labeling science. Thanks to the improvement of customer recognition and cross sales of existing customers at home and abroad, the revenue of clinical research service in 2022q1 was 265 million yuan, a year-on-year increase of 33.6%. Due to the adverse impact of China’s epidemic prevention and control on the delivery of clinical service business in the first quarter and the advance investment of the company’s clinical personnel resources, the number of clinical employees in 2021 was 3357, with a year-on-year increase of 52%, and the gross profit margin of 2022q1 was 4.65%, a decrease of 7.92pp compared with the same period last year.
Macromolecule & GCT self construction + acquisition go hand in hand, and a new service platform is built quickly
With the expansion of the service capacity of cgtcdmo, the company’s macromolecule, the operating revenue achieved rapid growth. The operating revenue in 2022q1 was 52 million yuan, a year-on-year increase of 49.6%; The gross profit margin of 2022q1 macromolecular & GCT service was – 4.86%, a decrease of 36.32pp compared with the same period last year. The loss was mainly due to the fact that the business is in the investment stage and the operating cost of the newly acquired gene therapy drug cdmo is too high. We believe that the loss is expected to gradually reduce with the further expansion of revenue scale in the future.
Profit forecast
We expect the company’s operating revenue from 2022 to 2024 to be 10.416136.59/17.312 billion yuan; The net profit attributable to the parent company is 2.307/3.807/3.832 billion yuan; The corresponding EPS is 2.90/3.79/4.82 yuan / share, maintaining the buy rating.
Risk warning: the research and development progress of innovative drugs served and the fluctuation risk of end market demand; New business development progress risk; Exchange rate fluctuation risk; Risk of core personnel turnover.
