\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 25 Pharmablock Sciences (Nanjing) Inc(300725) )
Event overview
In 2021, the company achieved a revenue of 1.202 billion yuan, a year-on-year increase of 17.55%, and a net profit attributable to the parent company of 487 million yuan, a year-on-year increase of 164.14%; The net profit deducted from non parent company was 233 million yuan, with a year-on-year increase of 34.24%. In Q1 2022, the revenue was 336 million yuan, with a year-on-year increase of 17.44%, the net profit attributable to the parent was 71 million yuan, with a year-on-year increase of 1.53%, and the net profit not attributable to the parent was 65 million yuan, with a year-on-year increase of 0.88%.
The revenue side is growing steadily, and the landing of new production capacity is expected to bring new increment
By business segment:
1) below the kilogram level: the revenue was 246 million yuan, with a year-on-year increase of 27.22%, accounting for about 21%, and the gross profit margin was 72%. In the second half of 2021, Nanjing new R & D center was put into use, with a construction area of 63000 square meters and 1000 fume hoods, an increase of five times, further enhancing the company’s front-end R & D force. At the same time, the company continued to increase the R & D and design of new molecular blocks, completed the design of more than 16000 high-quality compounds in 2021, and delivered more than 7000 orders.
2) above the kilogram level: the revenue reached 893 million yuan, with a year-on-year increase of 11.02%, accounting for about 74%; Among them, cdmo business realized a revenue of 455 million yuan, a year-on-year increase of 33.48% and a gross profit margin of 39%.
Capacity: put into use quarterly this year to alleviate the company’s capacity bottleneck. Workshop 501 was opened in March (165m3), workshop 502 (94.3m3) and workshop 503 (190.6m3) will be opened in the second half of the year. We expect the total capacity to reach 635m3 by the end of 2022, with a year-on-year increase of 243%.
Projects: the company took API projects as a breakthrough to stimulate the long-term and steady growth of cdmo business. It undertook 40 API projects throughout the year, of which 6 entered phase III, registration verification and commercialization stage; Successfully applied for the registration of 2 American DMFS and 3 Chinese APIs; Among the API projects undertaken, 15 projects are from European and American customers. In addition, the company strengthened the development of preparation and production business, and undertook three API preparation integration projects, one of which entered phase III and commercialization stage.
3) technical services: the revenue was 61.47 million yuan, a year-on-year increase of 160%, accounting for 5%.
The gross profit margin increased steadily, and the net profit margin was affected by the expense side
In 2021, it was 48.13%, with a year-on-year increase of 2.34%, and the net profit increased steadily. The net profit was mainly affected by the expense side: 1) personnel expansion and salary increase drive the increase of expenses: the administrative expenses increased by 24% year-on-year, mainly due to the expansion of management team and technical team, and the salary expenses paid to employees also increased significantly compared with the same period of last year, with a year-on-year increase of 80.3%. By the end of 2021, the total number of employees of the company was 1735, A year-on-year increase of 127%. 2) Continuously increased R & D investment to enhance the company’s core competitiveness, and R & D expenses increased by 25.4% year-on-year.
Large order delivery and exchange rate have a fluctuating impact on the company’s performance
If calculated at a constant exchange rate, the revenue in 2021 increased by 22.22% year-on-year. In addition, excluding the periodic impact of the delivery cycle of a major customer’s commercial project, the revenue increased by 52.24% year-on-year in 2021. The company undertook 1430 projects from preclinical to clinical phase II, and 45 clinical phase III to commercial projects, forming an obvious project funnel effect. The rich project pool is expected to gradually reduce the impact of periodic fluctuations of a single large order.
Under the influence of the epidemic, Q1’s revenue increased more than expected, and the profit side was affected by the exchange rate and expenses
If calculated at a constant exchange rate, Q1 revenue in 2022 increased by 19.58% year-on-year. Excluding the cyclical impact of order delivery from major customers, the revenue increased by 38.45% year-on-year. Under the influence of the epidemic, the revenue growth was slightly higher than expected. After deducting the impact of large exchange earnings in the first quarter of 21, the net profit increased by 14.85% year-on-year.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 350 million yuan, 510 million yuan and 720 million yuan respectively, and the corresponding PE will be 44, 30 and 21 times respectively, maintaining the “recommended” rating.
Risk warning: the risk of performance falling short of expectations, new business investment risk and fixed asset investment risk.
