\u3000\u3000 Porton Pharma Solutions Ltd(300363) (300363)
Porton Pharma Solutions Ltd(300363) released the performance forecast for the whole year of 2021: the expected operating revenue in 2021 is 3.004-3.108 billion yuan, with a year-on-year increase of 45% – 50%; The net profit attributable to the parent company is expected to be RMB 532 million, with a year-on-year increase of 54% – 64%; It is expected to deduct non net profit of RMB 519 million to RMB 548 million, with a year-on-year increase of 80% – 90%. The two new business segments of the company’s preparation cdmo and gene cell therapy cdmo are still in the stage of loss as a whole. In total, the net profit attributable to the shareholders of the listed company in the consolidated statements of the company is reduced by about 100 million yuan (the net profit of the two business impact statements in 2020 is 42.47 million yuan). Excluding the impact of loss of new business, the net profit attributable to the parent company in 2021 will increase by 64% – 72% year-on-year Non net profit attributable to parent deduction increased by 87% – 96% year-on-year.
Looking at Q4 alone, it is estimated that the operating revenue is 974 million yuan – 1078 million yuan, with a year-on-year increase of 67% – 85%, the net profit attributable to the parent is 139 million yuan – 171 million yuan, with a year-on-year increase of 63% – 101%, and the deduction of non net profit is 166 million yuan – 195 million yuan, with a year-on-year increase of 142% – 184%. The Q4 revenue and deduction of non profit are much higher than expected Viewpoint: Q4 revenue and deduction of non profits are much higher than expected. After deducting the impact of new business, the profit exceeds 600 million. The company’s Q4 revenue base in 2020 is high, and it will exceed the expectation on the basis of the high base in 2020 in 2021. Considering the impact of exchange rate fluctuations on the statements, the income exceeded expectations. Considering that the company’s main income comes from overseas and is mainly priced and settled in foreign currencies such as US dollars, the overall exchange rate level is below 6.5 in 2021 and the average exchange rate level is about 6.8 in 2020. We estimate that the affected income is more than 100 million. If we restore the same exchange rate, the overall income growth rate is 50-55%.
The company has achieved rapid growth for 12 consecutive quarters, achieved a new high in revenue in a single quarter, continued to improve the company’s profit margin and continued to invest in new businesses. The company’s revenue in the first three quarters was 540 million, 710 million and 770 million respectively. The Q4 revenue reached a new high of 974-1078 million yuan, which was very bright. The growth rate of Q4 deduction non-profit was 142-184%, which also greatly exceeded the expectation, reflecting the further improvement of operating efficiency. Among them, we expect some confirmation of small molecule and large orders. According to the median calculation, Q4’s single quarter revenue increased by 76% and profit increased by 82%, which is accelerated again on the basis of high base, which is quite bright. Considering the losses of gene cell therapy and preparations, the increase of incentive expenses and exchange losses, after the actual endogenous profit is added back, we expect it to be more than 600 million, which is significantly higher than expected, and the operating efficiency is still improving.
The signing of major contracts confirms our industrial trend judgment. The market generally believes that Porton Pharma Solutions Ltd(300363) is the second line of cdmo, but we believe that after two years of continuous and in-depth cdmo strategic transformation, the company’s technical capacity, technical reserves and customer coverage have gradually moved closer to the first line, and the gap is becoming smaller and smaller. The signing of small molecule major contracts fully confirms our judgment. The CDMO industry is a rare policy haven, and benefited from the industrial transfer, policy advantages and local R & D wave. Now it is the golden period of growth. The company is gradually gaining the first tier in China.
Profit forecast and investment rating. Based on the fact that the company’s business continues to exceed expectations, we raised the profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 532 million yuan, 938 million yuan and 1138 million yuan respectively, with an increase of 64.1%, 76.3% and 21.3% respectively. EPS is 0.98 yuan, 1.73 yuan and 2.10 yuan respectively, and the corresponding PE is 81x, 46x and 38x respectively. The current valuation growth rate highlights the cost performance. Based on the forward-looking layout of gene cell therapy, we think we can give the company a valuation premium. We are optimistic about the long-term development of the company and maintain the “buy” rating.
Risk warning: commercial order fluctuation risk; Risk of increased proportion of key customers and core products.
