Investment logic
Focus on SMO, with steady growth in performance. The company's main business income comes from SMO services. From 2019 to 2021, the company achieved revenue of RMB 304 / 3.35/503 million respectively. The year-on-year growth rate of main business income in 2019 was 57.41%, maintaining a high growth rate; In 2020, due to the impact of covid-19 pneumonia on the company's business development, the year-on-year growth rate of revenue fell to 10.46%; The company's operating performance recovered in 2021, with a year-on-year growth rate of 50.01%.
Smo industry is in the ascendant and has broad prospects. The market scale of China's SMO industry showed a trend of rapid growth, from 2.33 billion yuan in 2018 to 3.36 billion yuan in 2019, a year-on-year increase of 44.2%. In the future, with the expansion of medical R & D expenditure, the increase of the number of clinical trials, the improvement of clinical trial institutions' recognition of the importance of SMO industry, the increasing difficulty of new drug R & D and the improvement of global drug regulatory requirements, the market scale of China's SMO industry will continue to maintain rapid growth in the future. It is expected to further increase to 10.04 billion yuan in 2022, with a compound annual growth rate of 44.0% from 2019 to 2022.
Rich experience in project management and implementation, and its strength has been recognized by many multinational pharmaceutical enterprises. The top ten customers of the company include Pfizer, Roche, Novartis, Johnson & Johnson, Alberta, Lilly, Bristol Myers Squibb and MSD. As of December 31, 2021, the company has promoted more than 80 products to be listed outside China, of which products from multinational pharmaceutical enterprises account for about 68%. It can be seen that the company's quality management system has fully met the systematic inspection and access requirements of many multinational pharmaceutical enterprises and cro customers, and has been successfully selected as one of its few qualified suppliers; In addition, the company has established business contacts with many multinational pharmaceutical enterprises and cros, and successfully completed the follow-up project implementation and project acceptance.
Differentiated competition in subdivided disease areas has built a wide moat, and the market share is outstanding. The company has established competitive advantages in the fields of tumor, viral hepatitis and endocrine diseases. In terms of cancer drugs, from 2016 to the end of 2021, among the 81 new cancer drug products newly listed in China, Prius undertook 33, accounting for 40.74%; Up to now, among the 12 new PD-1 / PD-L1 mAb products newly listed in China, Prius has undertaken 7 (including the first new PD-1 mAb product listed in China), accounting for 58.33%; In 2021, there were 18 car-t treatment clinical trial projects in China, of which Prius undertook 4, accounting for 22.22%; In 2021, there were 37 double antibody clinical trials in China, of which 12 were undertaken by Prius, accounting for 32.43%; In the field of viral hepatitis, Prius has undertaken 11 of the 19 new viral hepatitis products newly listed in China since 2016, accounting for 57.89%.
Risk tips
The risk that the R & D progress is less than expected, the risk of repeated covid-19 epidemic, the risk of intensified market competition, the risk of brain drain, regulatory risk, etc.
