\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
The company issued the announcement of performance increase in 2021. It is estimated that in 2021, the operating revenue will reach 22.8 billion yuan to 22.9 billion yuan, with a year-on-year increase of 38.0% – 38.5%, the net profit attributable to the parent company will reach 4.97 billion yuan to 5.03 billion yuan, with a year-on-year increase of 68.0% – 70.0%, and the net profit attributable to the parent company will reach 4.01 billion yuan to 4.05 billion yuan, with a year-on-year increase of 68.0% – 70.0%.
The annual revenue exceeded expectations, and the growth trend of single quarter month on month continued. 1) The revenue growth in 2021 was strong, exceeding market expectations. The revenue in 2021q4 increased by 33.4% – 35.2% year-on-year and 5.2% – 6.6% month on month. We believe that the company has continuously improved its scale, technology and capacity under the continuous growth of capital expenditure, and the businesses of various sectors, especially the chemical business sector, have achieved strong growth under the strong demand for orders. 2) While the company’s revenue is growing rapidly, it has continuously optimized its operating efficiency, continuously improved its capacity utilization, and continuously reflected its scale effect. Considering that the total income from changes in fair value of some non current financial assets and investment income of the company in 2021 is RMB 1.66 billion, the fair value loss of H-share convertible bond derivatives is RMB 1 billion, and the impact of current exchange rate fluctuations and equity incentive expenses, we expect that the adjusted non IFRS net profit end will achieve faster growth than the income end in 2021.
1) chemical business: the main pipeline of the integrated crdmo platform continued to expand. At the end of the period, small molecule cdmo involved 1666 new drug molecules (42 commercialized, 49 in clinical phase III, 257 in clinical phase II, 1318 in clinical phase I and pre clinical). The number of customers and molecules served by oligonucleotide and polypeptide crdmo were + 128% and + 154% respectively year-on-year. The number of preparation commercial production projects has increased to 4, and another 8 preparation projects are in clinical phase III or NDA application stage.
2) testing business: the largest laboratory analysis and testing platform in Asia Pacific, and the capacity will continue to expand. 3) Biology business: the world’s largest discovery biology enabling platform, covering 1300 customers worldwide, providing integrated services from drug discovery to preclinical candidate compounds. In 2021, more than 70% of the revenue came from customers using chemical services and biological services at the same time.
4) ATU business: using global capacity to provide integrated ctdmo services for cell and gene therapy customers, in which the expansion base in Philadelphia has been put into operation and tripled the detection capacity, Shanghai Lingang Holdings Co.Ltd(600848) the new process R & D and commercial production center has been put into operation, At present, the company provides development and production services for 72 projects (including 53 pre clinical and clinical phase I projects, 8 clinical phase II projects and 11 clinical phase III projects).
5) ddsu business: by the end of the period, a total of 144 projects had completed ind applications (more than 70% of the projects ranked among the top three similar candidate drugs in China) and obtained clinical trial approvals (1 in the market application stage, 3 in the clinical phase III stage, 14 in the clinical phase II stage and 74 in the clinical phase I stage). It is expected that after the relevant products are listed, the company will obtain the relevant sales revenue share.
Profit forecast and rating: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 5.01 billion yuan, 6.84 billion yuan and 9.05 billion yuan respectively, with a year-on-year increase of 69.1%, 36.7% and 32.2%; The corresponding PE is 70X, 51x and 39x respectively. We are optimistic about the company’s new drug R & D and production outsourcing service leader and maintain the “buy” rating.
Risk tip: the global epidemic continues to affect the business risk, the risk of declining demand for pharmaceutical R & D services, the risk of intensified market competition, the risk of loss of core technicians and the risk of exchange rate changes.
