\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
Event: on January 18, 2022, the company released the performance forecast for 2021. In 2021, the company is expected to realize an operating revenue of 22.82-22.9 billion yuan, a year-on-year increase of 38.0% – 38.5%; The net profit attributable to the parent company was 4.97-5.03 billion yuan, a year-on-year increase of 68% – 70%; The non net profit deducted was RMB 4.01-4.05 billion, with a year-on-year increase of 60% – 87%.
The return to the parent company exceeded expectations, the revenue in a single quarter hit a record high, the recruitment of employees increased rapidly, and the continuous high growth can be expected. In 2021, the company expects to achieve a median operating revenue of about 22.86 billion yuan (+ 38.3%), a median net profit attributable to the parent company of about 5 billion yuan (+ 69.0%), and a median net profit deducting non net profit of about 4.03 billion yuan (+ 69.0%), all of which continue to maintain rapid growth. We expect that the main factors are: ① the smooth implementation of crdmo strategy, strong order demand and continuous strong main business; ② In 2021, the company completed the sale of ADC business, resulting in a net income of 270 million. By quarter, the median revenue in 2021q4 is about 6.38 billion yuan (+ 35.2%), the median attributable to the parent is about 1.44 billion yuan (+ 143.4%), and the median non net profit is 920 million yuan (+ 26.5%), The growth rate of parent company is higher than that of non deduction, which is mainly due to the change of about 470 million yuan (about – 670 million yuan in 2020q4) in the fair value of H-share convertible bond derivative financial instruments in 2021q4 non recurring profits and losses caused by the fluctuation of H-share price. In addition, in terms of employees, the total number of employees of the company reached 34912 (+ 32.2%, + 10.7pp) at the end of 2021, showing an accelerated growth trend.
The five sectors have frequent highlights, and the “crdmo + ctdmo” strategy is expected to drive long-term and rapid growth. 1) Wuxi chemistry: “end to end, integrated” crdmo business model is expected to usher in the fulfillment period: ① small molecule drug discovery service: more than 310000 compounds were synthesized throughout the year, becoming an important “flow inlet” at the back end. ② Cdmo: “follow and win molecules” is progressing smoothly. By the end of 2021, there were 1666 projects (+ 26.8%), including 42 commercialization (+ 50%), 49 clinical phase III (+ 8.9%), 257 clinical phase II (+ 18.4%) and 1318 clinical phase I / preclinical (+ 28.7%) projects. ③ Oligonucleic acids and polypeptides: 57 customers (+ 128%) and 99 projects (+ 154%), all of which have achieved strong growth. 2) Wuxitesting: the capacity continues to expand. It is estimated that the laboratory area is expected to reach 165000 square meters in 2023 (compared with 2021 + 50%), and the animal room is expected to reach 750 (compared with 2021 + 66.7%). 3) Biology business: in 2021, more than 70% of customers use biology and chemistry services at the same time, with significant synergy. 4) Cell and gene therapy ctdmo (wuxiatu): ① project: in 2021, there will be about 72 service projects, about 53 pre clinical and phase I, 8 clinical phase II and 11 clinical phase III, of which 4 project offices will soon submit the listing application stage. ② In terms of production capacity: Shanghai Lingang Holdings Co.Ltd(600848) base and three times the expanded testing capacity in Philadelphia were also officially put into operation in October and November respectively. We expect that with the gradual repair of the epidemic and the gradual release of production capacity, the cell and gene therapy sector is expected to gradually contribute new increment. 5) China new drug R & D Service Department (wuxiddsu): by the end of 2021, there were 74 project departments in clinical phase I, 14 in clinical phase II, 3 in clinical phase III and 1 in market application stage. We expect that with the application for listing of the first ddsu project, the sales share is expected to drive the sector to usher in a new round of rapid growth.
Profit forecast and investment suggestions: we estimate that the company’s revenue from 2021 to 2023 will be 22.249, 29.630 and 38.891 billion yuan, with a year-on-year increase of 34.55%, 33.17% and 31.26%, and the net profit attributable to the parent company will be 4.168, 5.625 and 7.563 billion yuan, with a year-on-year increase of 40.80%, 34.95% and 34.47%. The company’s track is in a high boom, and the “integration, end-to-end” strategy is expected to consolidate competitive barriers, drive the company’s long-term rapid growth and maintain the “buy” rating.
Risk warning events: the public materials used in the research report may have the risk of information lag or untimely update; Risk of loss of core technical personnel; Risk of industry R & D investment falling short of expectations; Risk that overseas business integration does not meet expectations; Risk of intensified industry competition; Exchange rate fluctuation risk.
