On January 18, the leader Wuxi Apptec Co.Ltd(603259) (603259. Sh, 02359. HK) of the pharmaceutical outsourcing industry (CXO) disclosed the performance forecast for 2021, which said that the expected operating revenue in 2021 was about 22.819 billion yuan to 22.902 billion yuan, an increase of 38% to 38.5% over 16.535 billion yuan in the same period of the previous year; It is estimated that the net profit attributable to the shareholders of the company will be about 4.973 billion yuan to 5.032 billion yuan, an increase of 68% to 70% over 2.96 billion yuan in the same period of last year; The net profit attributable to the parent company after deducting non recurring profits and losses was about 4.007 billion yuan to 4.055 billion yuan, with a year-on-year increase of 68% to 70%.
According to the report of the third quarter of 2021, the company’s operating revenue in the first September of this year increased by 39.84% year-on-year to RMB 16.521 billion, and the net profit attributable to shareholders of listed companies increased by 50.41% year-on-year to RMB 3.562 billion. According to this estimation, in the fourth quarter of 2021, Wuxi Apptec Co.Ltd(603259) achieved a single quarter operating revenue of about 6.298 billion yuan to 6.381 billion yuan, and a single quarter net profit attributable to the parent company of about 1.411 billion yuan to 1.47 billion yuan. After two consecutive quarters of falling performance, the profitability of a single quarter has improved.
Wuxi Apptec Co.Ltd(603259) profitability in recent years
In terms of investment income, Wuxi Apptec Co.Ltd(603259) said that compared with the same period in 2020, the net income impact of the company’s non recurring profit and loss items in 2021 increased.
Among them, the investment income in the secondary market decreased compared with the same period in 2020. Specifically, the subject matter of the listed company invested by the company is affected by the fluctuation of market share price, resulting in a decrease in the total income from changes in fair value and investment income of some non current financial assets compared with the same period of the previous year. It is estimated that the net income will affect the annual profit of about 1.663 billion yuan in 2021, while the net income in the same period of the previous year is 1.794 billion yuan, The year-on-year revenue decreased by about 131 million yuan.
On the other hand, the fair value of derivative financial instruments of Wuxi Apptec Co.Ltd(603259) H-share convertible bonds is affected by the change of the company’s H-share price. The amount of non cash book fair value loss in 2021 is expected to be about 1.001 billion yuan, with a net loss of 1.349 billion yuan in the same period of last year, a year-on-year loss decrease of about 349 million yuan.
In addition, Wuxi Apptec Co.Ltd(603259) completed the transaction of selling small molecule toxin molecules and connecting sub businesses and related assets to Changzhou Yaoming union Biotechnology Co., Ltd., a wholly-owned subsidiary of Wuxi Yaoming union Biotechnology Co., Ltd. (formerly renamed Wuxi Yaoming union Biotechnology Co., Ltd.), and obtained a net income of about 274 million yuan from the disposal of assets in 2021.
For the overall business situation in 2021, Wuxi Apptec Co.Ltd(603259) relevant people told the interface news reporter that various indicators maintained strong growth. Among them, the company stressed that the strong demand for orders in the integrated Wuxi chemistry sector promoted the accelerated growth of the company’s annual sales revenue in 2021; Laboratory analysis and testing business under wuxitesting, clinical cro / SMO business, biology business and small molecule drug discovery service under chemical business also continued to maintain a strong growth momentum.
In the middle of 2021, Wuxi Apptec Co.Ltd(603259) adjusted the organizational structure of its business segment. In the first three quarters of 2021, in the most important chemical business segment, Wuxi Apptec Co.Ltd(603259) achieved revenue of 10.077 billion yuan in the first three quarters, with a year-on-year increase of 47.5%. After adjustment, the gross profit of non IFRS was 4.238 billion yuan, with a year-on-year increase of 44.7% and a gross profit margin of 42.1%; In the same period, the biological business realized a revenue of 1.424 billion yuan, a year-on-year increase of 33.2%. After adjustment, the non IFRS gross profit was 596 million yuan, a year-on-year increase of 26.6%, and the gross profit margin was 41.8%; The test business realized a revenue of 3.335 billion yuan, a year-on-year increase of 43.9%. After adjustment, the non IFRS gross profit was 1.132 billion yuan, a year-on-year increase of 51.4%, and the gross profit margin was 33.9%; The ctdmo business of cell and gene therapy realized a revenue of 736 million yuan, a year-on-year decrease of 5.2%. After adjustment, the gross profit of non IFRS was 14 million yuan, a year-on-year decrease of 89.7%, and the gross profit margin was 1.9%; In China’s new drug R & D service business segment, Wuxi Apptec Co.Ltd(603259) achieved a revenue of 932 million yuan in the first three quarters of this year, a year-on-year increase of 16.4%. After adjustment, the non IFRS gross profit was 412 million yuan, a year-on-year decrease of 0.6% and the gross profit margin was 44.2%.
Source: Wuxi Apptec Co.Ltd(603259) third quarter report of 2021
Under the epidemic, the performance of Wuxi Apptec Co.Ltd(603259) as the leading stock of CXO has increased greatly, but its ongoing projects have been delayed. On December 31, 2021, Wuxi Apptec Co.Ltd(603259) said that it would postpone the raising and investment projects of some A-share initial public offerings and change the use of funds.
Among them, the company’s previous IPO raised investment project “Suzhou drug safety evaluation center expansion project” was originally planned to be available on December 31, 2021, but now it will be extended for one year to December 31, 2022. Wuxi Apptec Co.Ltd(603259) said that the covid-19 epidemic occurred during the original construction period, which had many impacts on the project construction progress, including the failure to obtain the planning license and construction license approval required for some projects within the original administrative license period; The company has added additional pre assessment procedures in the procurement of key equipment to deal with the risk of changes in trade policies, resulting in delays in the project progress.
Meanwhile, in order to cope with the shortage of production capacity, Wuxi Apptec Co.Ltd(603259) plans to use part of the funds of the expansion project of the original Suzhou drug safety evaluation center for the construction of Nantong drug safety evaluation center project. The planned construction facilities of the project are expected to be put into operation from 2023.
In the secondary market, Wuxi Apptec Co.Ltd(603259) the share price performance in 2021 can be described as ups and downs. At the beginning of last year, the market in 2020 continued. By the Spring Festival last year, the company’s share price continued to rise by more than 37%; However, after the Spring Festival, the market turned sharply. On March 23, Wuxi Apptec Co.Ltd(603259) share price fell by more than 33%; Then, in mid July last year, the company’s share price rose nearly 60% again to a record high of 172.49 yuan / share; However, by the end of 2021, Wuxi Apptec Co.Ltd(603259) share price dropped nearly 30% from the high to about 118 yuan / share.
When the stock price fluctuates, Wuxi Apptec Co.Ltd(603259) shareholders find the opportunity to reduce their holdings and cash out. In June 2021, the company’s shareholder, Shanghai Yingyi investment center, violated its commitment to reduce the company’s shares during the IPO without “saying hello” in advance, and illegally reduced 17249686 shares from May 14 to June 7 last year. The reduction price range was 143.49 yuan / share to 176.88 yuan / share, with a total reduction amount of 2.894 billion yuan. Subsequently, Shanghai Yingyi investment center was investigated by the CSRC on June 16, 2021 due to “suspected illegal information disclosure”, and the investigation results have not been released so far.
Subsequently, in October 2021, Wuxi Apptec Co.Ltd(603259) disclosed that its directors and senior managers Edward Hu (Hu Zhengguo), Steve Qing Yang (Yang Qing), shuhuichen (Chen Shuhui), minzhang Chen (Chen minzhang), Ellis BIH Hsinchu (Zhu bisin), Yao Chi, etc. had reduced their holdings of 306790 shares of the company, accumulatively cashing out 44.6598 million yuan.
Meanwhile, according to the announcement on November 12 last year, summerbloom investments (I) PTE. Ltd, a subsidiary of Temasek, a Singapore sovereign wealth fund. The reduction plan was completed in the middle of August of that year, with a total reduction of 14989182 Wuxi Apptec Co.Ltd(603259) shares and a total cash out of 1.945 billion yuan.
