Nanmo Biology (688265)
Event overview
From April 28 to 29, 2022, Nanmo biology disclosed its annual report of 2021 and the first quarterly report of 2022: in 2021, it realized an operating revenue of 275 million yuan, a year-on-year increase of 40.31%; The net profit attributable to the parent company was 608609 million yuan, a year-on-year increase of 36.59%, and the net profit not attributable to the parent company was 524783 million yuan, a year-on-year increase of 60.36%; The basic earnings per share is 1.04 yuan. In 2022q1, the operating revenue was 727063 million yuan, a year-on-year increase of 33.88%, and the net profit attributable to the parent company was 13.922 million yuan, a year-on-year increase of 17.64%; Deduct the net profit not attributable to the parent company of RMB 9.0127 million, with a year-on-year growth rate of – 16.30%; The basic earnings per share is 0.18 yuan.
Event comments
The revenue increased steadily, and the proportion of high gross profit business continued to increase
In 2021, the company’s revenue was 275 million yuan, a year-on-year increase of 40.31%. The standardized model and efficacy evaluation business segment grew rapidly. Standardized model: the gross profit margin will reach 77.60% in 2021; The revenue was 94.91 million yuan, with a year-on-year growth rate of 77.59%; Accounting for 34.48% of revenue, an increase of 7.15 percentage points compared with 2021. Pharmacodynamic evaluation and phenotypic analysis services: the gross profit margin in 2021 was 70.68%; The revenue was 38.15 million yuan, a year-on-year increase of 111.05%; Accounting for 13.86% of revenue, an increase of 4.61 percentage points compared with 2021.
In 2022, the growth rate of Q1 profit side slowed down and the gross profit margin decreased (the overall gross profit margin in 2021q1 was 49.89%). This is mainly due to the normal cost side expenditure, while the income side is affected by seasonal fluctuations: during the Spring Festival holiday and covid-19 epidemic, the company’s payment collection speed slowed down in the first quarter, the expansion of production scale, the increase of the number of employees, and the increase of operating expenses such as personnel wages and rents paid in the current period.
Increase R & D investment and adhere to scientific research and innovation
In 2021, the R & D expenditure was 479471 million yuan, a year-on-year increase of 39.31%. The company adheres to the research and development of animal model lines for basic research of life sciences and drug creation needs, continuously expands the library of standardized model lines, and improves the recognition of customers and the market for the company’s products. At present, the company has more than 7200 self-developed standardized models, especially in frontier and key disease research fields such as immune checkpoints such as PD-1, PD-L1, CTLA-4, CD47 and tigit, apoE4 Alzheimer’s disease and a / b hemophilia. On the other hand, the company continued to improve the pharmacological and pharmacodynamic service platform, carried out drug screening, pharmacological and pharmacodynamic evaluation and other cro services, and established a one-stop service system from gene modified animal model construction to phenotypic analysis and pharmacological and pharmacodynamic evaluation, which has advantages in serving the animal model for pharmacodynamic evaluation of innovative drug research and development needs of industrial customers.
New orders increased rapidly and actively expanded overseas markets
The company has continuously strengthened market development. The demand of scientific research customers and industrial customers for the company’s genetically modified animal models and related technical services continues to rise, and the order volume has achieved rapid growth. In 2021, the company signed 309 million yuan of new orders, with a growth rate of 38.87%. At the same time, the company actively carries out overseas layout and expands its business territory. At present, it has provided genetically modified animal models and technical services in the United States, South Korea, Singapore and other countries. In 2021, the foreign market revenue was 194383 million yuan, a year-on-year increase of 80.68%, and the foreign market accounted for 7.10%.
Capacity continued to expand, laying the foundation for large-scale performance
The company has actively expanded its production scale, and has built a fully functional and technologically advanced research and development, production and technical service base of genetically modified animal models in Jinshan, Shanghai, with about 50000 cages, which has been gradually put into operation. Up to now, the company has four production and R & D bases in Shanghai (Banxia Road, Jinke Road, Haley road and Jinshan), with more than 100000 cages. It is expected that the production capacity will reach 140000 cages by the end of 2022. In addition, the production base in Zhongshan, Guangdong will be put into operation at the end of March 2022, and the production capacity will be gradually released.
Equity incentive shows confidence and binds performance to stable and rapid growth
In order to effectively enhance the cohesion of the core team and the core competitiveness of the enterprise, and promote the long-term development of the company. The company launched the equity incentive plan and plans to grant 1.164 million restricted shares to 78 directors, senior executives, core technicians and other incentive objects of the company. The binding performance evaluation target is operating income: (1) trigger value: RMB 371 / 501 / 677 million (cagr35%) from 2022 to 2024 respectively; (2) Target value: 413 / 619 / 928 million yuan (cagr50%) from 2022 to 2024 respectively.
Investment advice
Considering the strong strength of the company in the model animal industry, sufficient orders, steady expansion of production capacity and boosting confidence by the equity incentive plan, we adjusted the profit forecast, that is, the operating revenue from 2022 to 2024 is 382 / 522 / 694 million yuan respectively (the previous forecast from 2022 to 2023 corresponds to 367 / 481 million yuan); The year-on-year growth rate was 38.9% / 36.4% / 33.0%; The net profit attributable to the parent company is 96 / 133 / 174 million yuan respectively (the previous forecast from 2022 to 2023 corresponds to 84 / 116 million yuan); The year-on-year growth rate was 58.3% / 38.3% / 30.3%; The corresponding EPS from 2022 to 2024 is 0.99/1.37/1.78 yuan / share (the previous forecast from 2022 to 2023 is 1.08/1.49 yuan / share); Corresponding to the closing price on April 29, 2022, PE is 52 / 37 / 29x, maintaining the “buy” rating.
Risk tips
The epidemic situation has intensified; Industry competition intensifies; Order delivery is not as expected; Laboratory animal management risk; Technology iteration risk.
