Key points:
Innovative drugs: the R & D competition intensifies, and the internationalization breakthrough is on the horizon
The pace of commercialization of biotech has accelerated, and the advantages of leading enterprises are obvious: in 2021, biotech achieved an operating revenue of 32.5 billion yuan, with a year-on-year growth rate of 118%, a month on month growth rate of 37pct, and the pace of commercialization has continued to accelerate. A total of 19 companies have commercialized their products, 3.8 times higher than that in 2018. The four companies in the first tier, Baiji Shenzhou, Cansino Biologics Inc(688185) biology, Cinda biology and Shanghai Junshi Biosciences Co.Ltd(688180) biology, achieved a total operating revenue of 20.2 billion yuan, accounting for 62% of the biotech industry. In terms of net profit, 6 companies turned losses in 2021, 15 narrowed losses and 20 expanded losses. R & D expenses maintained a high growth. The top 40 R & D expenses reached 67.7 billion yuan, with a year-on-year growth rate of 30%, accounting for 58% of the R & D expenses of the whole industry.
Chemical pharmaceutical: the revenue growth is affected by centralized procurement, and the decrease of expenses drives the acceleration of net profit growth
In 2021, the revenue of chemical pharmaceutical was 366.3 billion yuan, with a year-on-year increase of 8.5%. The net profit attributable to the parent company was 32.8 billion yuan, with a year-on-year increase of 27%, the gross profit margin was 51.08%, a month on month decrease of 2.61 PCT, the sales expense rate continued to decline, and the decrease in expenses accelerated the growth of net profit. The R & D expenditure was 27.6 billion yuan, a year-on-year increase of 15%, and the R & D expenditure rate was 7.5%, a year-on-year increase of 0.4pct.
Cost of raw materials suppressed: short-term profit increased
The revenue growth of characteristic APIs accelerated, and the rising cost eroded profits: in 2021, the revenue of characteristic APIs was 56.9 billion yuan, an increase of 10% year-on-year, an increase of 3PCT month on month, and the net profit attributable to the parent company was 4.3 billion yuan, a decrease of 28% year-on-year. The increase in cost led to the decrease of gross profit margin and net profit margin, which were 33.73% and 7.6% respectively, with a month on month decrease of 4.21pct and 4pct respectively.
High performance growth was driven by the release of bulk API production capacity and price rise: in 2021, the bulk API revenue was 28.9 billion yuan, a year-on-year increase of 34.7%, and the net profit attributable to the parent company was 6.4 billion yuan, a year-on-year increase of 27%. The gross profit margin was 43.03%, down 6.45 PCT month on month, and the rise in cost led to a significant decline in the gross profit margin. Thanks to good cost control, the net interest rate remained relatively stable.
Investment advice
The medium and long-term investment ideas under the post epidemic situation should return to the industrial operation trend, and grasp the two main investment lines of bottom process innovation and cutting-edge scientific and technological innovation.
1. The main line of bottom process innovation: to b-end invisible champion. It is suggested to pay attention to the stock opportunities in the upstream equipment, gene consumables, biological enzymes, high-end analytical instruments and reagents of the biopharmaceutical industry chain.
2. The main line of cutting-edge scientific and technological innovation: the value of cutting-edge technology platform. It is suggested to pay attention to the potential investment opportunities of ADC, shuangkang and mRNA technology platform companies.
In the medium and long term, the industry has ushered in the historical opportunity of transformation and upgrading. In the short term, it has fluctuated under the influence of the external macro environment and sentiment. In the long term, we maintain the buy rating of the industry.
Risk tips
1. The clinical research and development of innovative drugs failed, and the pharmaceutical procurement policy continued to be under high pressure.
2. International registration and commercialization are lower than expected
