Report guide
In terms of financial performance in 2021 and 2022q1, the upstream supply chain is the most obvious link to improve roe, the operating capacity (fixed asset turnover) of the company expanded by cdmo is the most obvious, the operating profit margin of the integrated & international company is the highest, and API company is still in the period of capacity construction and product registration. From the perspective of poor expectation of industrial upgrading, we continue to be optimistic about the improvement trend of operating capacity and profitability of upstream manufacturing companies from 2022 to 2024.
Key investment points
Stock price resumption: the excess return is concentrated in the upstream of the industrial chain. Stock price resumption: the excess return converges, and the marginal change and expected difference since 2021 are viewed from the perspective of the industrial chain rather than the sector. Taking January 5, 2021 as the benchmark, the cumulative excess return of market value as of April 29, 2022 is calculated. Under the background of general adjustment of sectors in 2022, the performance of sub circuits such as API and supply chain (equipment, consumables, etc.) is better than the pharmaceutical index as a whole.
Upstream and downstream financial recovery: the supply chain is the link with the highest roe improvement
① growth capacity: supply chain companies such as equipment and materials are high boom links in the sector. According to the 2021 annual report and 2022q1 data, the year-on-year growth rate of revenue and profit of supply chain companies such as equipment and materials is higher than that of other links of the pharmaceutical manufacturing industry chain, indicating a high boom. The driving factors benefit more from the boom of China's biopharmaceutical capital expenditure and abundant orders on hand. We believe that this growth has high demand sustainability from 2022 to 2024.
② profitability: equipment, materials and other supply chain companies have the highest roe and the highest operating profit margin in the integrated & international links. From the perspective of roe, the roe of equipment, materials and other supply chain companies will continue to improve in 2021; The importance of continuous expansion of API and API integration for CDME companies is higher than that for the former companies. From the perspective of operating profit margin, the operating profit margin in the field of integration internationalization is higher, which is not only higher than that of upstream companies in the industrial chain (API and supply chain links), but also higher than that of Chinese traditional generic pharmaceutical companies. We believe that the higher profit margin comes from the cost advantage and preparation internationalization barriers under forward integration.
③ operation efficiency: the turnover rate of fixed assets of companies with partial cdmo expansion continues to improve. The fixed asset turnover rate of companies with partial cdmo expansion was 2.6 in 2021, which has increased for three consecutive years and the highest increase rate. We believe that the increase of turnover rate in the past three years is mainly due to the upgrading of supply capacity (increase of project unit price + scale effect). Under the release of production capacity and the upgrading of project structure, the overall turnover rate of fixed assets of the company still has room to improve.
④ investment intensity: API and integrated & international companies have the highest investment intensity. From the perspective of "capital expenditure / fixed assets", investment intensity: API company (86.4%, the proportion in 2021 is higher than that in 2020), integrated & international expansion company (68.1%), supply chain company (58.8%). We are optimistic about the growth marginal growth trend brought by capacity release under the premise of operation efficiency verification in 20222024.
API and preparation export companies: China dividend and product upgrading
① structure of growth capacity: industrial upgrading and new business increment of cdmo began to accelerate. From the perspective of revenue composition, the marginal change in 2021 and 2022q1 in 2021 and 2022q1 is seen in terms of revenue composition. In terms of revenue composition, the marginal change in 2021 and 2022q1 is part of the marginal change in 2021 and 2022q1 in 2021 and 2022q1 in 2021 and 2022q1, from the company's preparations revenue, from the company's preparations revenue, from the company's preparations revenue, from the company's preparations, from the company's preparations, from the company's preparations, from the '30070like the combination of a winning bid (such as the ' Xinjiang East Universe (Group) Gas Co.Ltd(603706) 0370for such as the '' ''s Vt Industrial Technology Co.Ltd(300707) 02 webelieve that under the influence of centralized mining, environmental protection and other factors, The growth of the sector is expected to gradually return to the track of rapid growth with the new increment of preparations and cdmo.
② region of growth capacity: China's growth rate is higher, and API companies under centralized mining are expected to continue to earn profits. In 2021, the average proportion of foreign revenue of the sample companies was 48.4%. We believe that the marginal change in the 2021 annual report and 2022q1 is that the growth rate of China's revenue has increased significantly and is higher than that of foreign revenue, which may be related to the expansion of China's API Market and the bid winning of centralized procurement. We expect that with the promotion of the seventh batch of centralized procurement, API and preparation export companies are expected to continue to benefit from the growth of China's API and preparation market from 2022 to 2024.
③ profitability: the upgrading of variety structure has significantly increased the gross profit margin of some companies. From the perspective of roe in 2021, the sample companies such as Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Apeloa Pharmaceutical Co.Ltd(000739) , Hainan Poly Pharm.Co.Ltd(300630) are relatively high. In terms of operating profit margin, Hainan Poly Pharm.Co.Ltd(300630) , Zhejiang Ausun Pharmaceutical Co.Ltd(603229) , Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) and other companies are relatively high. From the perspective of gross profit margin, companies with higher gross profit margin in 2022q1 include Hainan Poly Pharm.Co.Ltd(300630) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Aurisco Pharmaceutical Co.Ltd(605116) and other companies. Companies with higher gross profit margin in 2022q1 include Aurisco Pharmaceutical Co.Ltd(605116) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Ningbo Menovo Pharmaceutical Co.Ltd(603538) and other companies. We believe that the increase of gross profit margin in 2022q1 may be related to the upgrading of variety structure.
④ operating efficiency and capital expenditure: Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) high turnover rate of fixed assets and Brightgene Bio-Medical Technology Co.Ltd(688166) high investment intensity. In 2021, fixed asset turnover rates for companies such as the company ''s corporate corporate corporate like the year of the year of the year in 2022021 in the year of the year in which corporate fixed assets such as the company''s Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) theturnover rate of fixed assets such as has increased significantly, indicating the continuous improvement trend of operation efficiency, and the capital expenditure such as Brightgene Bio-Medical Technology Co.Ltd(688166) , Zhejiang Ausun Pharmaceutical Co.Ltd(603229) has accelerated significantly.
Investment advice
In conclusion, considering the different strategies and business structures of China's pharmaceutical industry chain companies, we suggest considering the investment opportunities of China's pharmaceutical industry chain companies from the perspectives of CMO / cdmo flexibility, product upgrading speed, preparation layout and variety echelon.
① CMO / cdmo flexibility: we believe that API's advantages in expanding CMO / cdmo business stem from the technical platform, stable supply and customer structure. The scarce m-end capability has the ability to go beyond the cycle α Attribute, recommended Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Apeloa Pharmaceutical Co.Ltd(000739) .
② product upgrading speed: we believe that China Pharmaceutical Equipment Corporation still has a lot of room for product upgrading in the field of biopharmaceutical equipment. We are optimistic about rapidly expanding the category of biopharmaceutical equipment and replenishing the integrated biopharmaceutical equipment investment of consumables / filler short board in the window period of rapid downstream development. We suggest paying attention to Sensong international, Tofflon Science And Technology Group Co.Ltd(300171) , Truking Technology Limited(300358) and other companies.
In addition, some niche material fields with high technical barriers are expected to benefit from downstream demand explosion and product iteration. It is suggested to pay attention to Jenkem Technology Co.Ltd(688356) etc.
③ we have a clear idea about the formulation establishment and evaluation in the Chinese market; As for the international market, we are optimistic about the export leader of preparations with scarce compliance capacity, overseas sales channels and variety echelon. We recommend Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , and we suggest paying attention to Hainan Poly Pharm.Co.Ltd(300630) , Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , etc.
④ variety echelon: we are optimistic about the global space of large tonnage API varieties based on China's systematic cost advantage, pay particular attention to the layout of new varieties in cardiovascular, anticoagulant, neurological, hypoglycemic and other fields, and suggest paying attention to Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , etc; We are also optimistic about the expansion space of difficult niche API based on the advantages of synthesis and technology platform. We suggest paying attention to Zhejiang Xianju Pharmaceutical Co.Ltd(002332) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Zhejiang Ausun Pharmaceutical Co.Ltd(603229) , Aurisco Pharmaceutical Co.Ltd(605116) , etc.
Risk tips
Production safety accidents and quality risks; Risk of core preparation varieties falling short of standard or sales volume falling short of expectations; Exchange rate fluctuation risk; Order delivery volatility risk; Risk of changes in pharmaceutical regulatory policies
