\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
Event overview
On January 18, 2022, Wuxi Apptec Co.Ltd(603259) released the performance forecast for 2021: the company expects to achieve an annual operating revenue of 22.819 billion yuan – 22.902 billion yuan, a year-on-year increase of 38% – 38.5%; It is estimated that the net profit attributable to the parent company in the whole year will be 4.973 billion yuan – 5.032 billion yuan, with a year-on-year increase of 68% – 70%; It is expected that the net profit of non parent company deduction in the whole year will be 4.007 billion yuan – 4.055 billion yuan, with a year-on-year increase of 68% – 70%.
The performance exceeded expectations and the profit performance was particularly eye-catching
It is estimated that the operating revenue will reach 22.819 billion yuan – 22.902 billion yuan in 2021, with a year-on-year increase of 38% – 38.5%. In terms of quarters, Q4 is expected to achieve revenue of RMB 6.298 billion-6.381 billion, a new high in a single quarter, with a year-on-year increase of 33.4% – 35.2%, and the revenue side shows a quarterly increasing trend.
It is expected that the net profit attributable to the parent company in the whole year will be RMB 4.973 billion-5.032 billion, with a year-on-year increase of 68% – 70%. The profit growth rate far exceeds the revenue growth, and the net profit margin is about 22%, 18% in 2020, an increase of 4pct. It is mainly due to the continuous improvement of capacity utilization through continuous optimization of operation efficiency, and the scale effect can be further revealed.
The five sectors go hand in hand and maintain a rapid growth trend
1) Wuxi chemistry: the main pipeline of the integrated crdmo platform continues to expand, and remarkable achievements have been made in new capacity-building
We expect to achieve a revenue of 13.8 billion yuan, a year-on-year increase of 45%, accounting for about 60% of the company’s overall revenue. In 2021, 732 molecules were added, with a total of 1666 molecules, including 42 commercial projects and 49 clinical phase 3 projects. The proportion of later projects increased year by year. In terms of new capability platform, the number of oligonucleotide and polypeptide drug customers increased by 128% year-on-year, and the number of molecules increased by 154% year-on-year, realizing “strong” growth. With the new capacity gradually put into use in the second half of 2022, cdmo capacity is expected to reach a new level and boost the continuous excellent performance of performance.
2) Wuxi testing: the largest laboratory analysis and testing platform in Asia Pacific
We expect to achieve revenue of 4.5 billion yuan, a year-on-year increase of 36%, accounting for about 20% of the company’s overall revenue. In 2021, the company has 110000 square meters of laboratories and 450 animal rooms; It is estimated that by 2023, it will expand to 165000 square laboratories (+ 50%) and 750 animal rooms (+ 67%), which is the largest experimental analysis and testing platform in the Asia Pacific region.
3) Wuxi biology: the world’s largest discovery biology enabling platform
We expect to achieve revenue of 2 billion yuan, a year-on-year increase of 33%, accounting for about 8.7% of the company’s overall revenue. The company has 2100 + biologists and R & D managers and is the world’s largest discovery biology enabling platform. In 2021, the proportion of revenue from customers who use wuxichemistry and wuxibiology services at the same time is more than 70%, and the synergy effect is significant.
4) Wuxi ATU: the power pipeline of integrated ctdmo platform continues to expand
We expect to achieve revenue of 1.15 billion yuan, a year-on-year increase of 11.5%, accounting for about 5% of the company’s overall revenue. The company has realized the global production capacity layout of cell gene therapy. At present, there are 53 preclinical and clinical phase I projects, 8 clinical phase II projects, 11 clinical phase III projects in the pipeline, and 4 projects are in the stage of submitting listing application, which is expected to usher in the first year of commercialization of cell gene therapy products.
5) Wuxi ddsu: Milestone + sales share, win-win new drug success revenue
We expect to achieve a revenue of 1.3 billion yuan, a year-on-year increase of 18%, accounting for about 5.7% of the company’s overall revenue. As of December 31, 2021, a total of 232 projects are in progress, 144 projects are in the ind application stage, and 70% + of the project R & D progress is among the top three in China.
Investment suggestion: the company continues to optimize and explore the business synergy between cross platforms, accelerate the pace of globalization, continue to strengthen the company’s unique integrated crdmo + ctdmo business model, and continuously expand services from “following the development of projects” to “following the development of drug molecules”. The short-term chemical + detection + biology maintains a high growth trend, and the medium and long-term cell gene therapy and ddsu business may usher in an outbreak period. It is expected that the parent net profit from 2021 to 2023 will be RMB 4.99 billion, 6.81 billion and 8.83 billion respectively, with a year-on-year increase of 69%, 37% and 30%, maintaining the “recommended” rating.
Risk warning: the risk of performance falling short of expectations, new business investment risk and fixed asset investment risk.
