\u3000\u3000 Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) (603456)
Events. The company issued the performance forecast for 2021. In 2021, the company expects to realize a net profit attributable to the parent company of 609 ~ 685 million yuan, with a year-on-year increase of 60 ~ 80%; It is expected to realize a net profit of RMB 532 ~ 596 million, a year-on-year increase of 65 ~ 85%.
According to the calculation of performance forecast, the company is expected to realize the net profit attributable to the parent company of 136 ~ 212 million yuan in Q4 single quarter of 2021, with a year-on-year increase of – 4 ~ 50%; Q4 is expected to achieve a net profit of 95 ~ 159 million yuan in a single quarter, with a year-on-year increase of – 14 ~ 43%.
Comments: the performance is in line with expectations. The company’s business trend is upward and continues to grow at a high speed.
\u3000\u30001. The performance is in line with expectations, and the company’s business trend is upward and continues to grow at a high speed. According to the median forecast, the company is expected to realize a net profit attributable to the parent company of 647 million yuan in 2021, with a year-on-year increase of 70%; The non net profit deducted was 564 million yuan, a year-on-year increase of 75%; Q4 realized a net profit attributable to the parent company of 174 million yuan in a single quarter, with a year-on-year increase of 23%; Q4 achieved a net profit deduction of 127 million yuan in a single quarter, with a year-on-year increase of 15%. The growth rate fluctuated between quarters, which we believe is mainly due to the impact of quarterly delivery fluctuations of cdmo enterprises. The company’s overall performance is in line with expectations, the company’s business trend is upward and continues to grow at a high speed.
\u3000\u30002. Re combing the company’s investment logic: Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) is a highly attractive target with high valuation and cost performance in the cdmo sector, with fast performance growth and high certainty.
1) high cost performance: the position of the company is only 40 times that of this year. The valuation in the cdmo sector is relatively low, and there is room for the valuation to rise;
2) high growth rate: the company has achieved high growth for several consecutive quarters, and is expected to achieve a growth rate of 35-40% this year, which is still possible to exceed expectations;
3) high certainty: Novartis’s three major varieties continue to increase in volume, and is expected to undertake new commercialized orders from other pharmaceutical enterprises, as well as other post clinical orders are expected to contribute to the commercialization of listing, helping the company’s sustained performance growth.
Profit forecast and valuation. According to the performance forecast, we raised the profit forecast. It is estimated that the operating revenue of the company from 2021 to 2023 will be 3.613 billion yuan, 4.777 billion yuan and 6.197 billion yuan respectively, with the corresponding growth rates of 36.5%, 32.2% and 29.7% respectively; The net profit attributable to the parent company was RMB 651 million, RMB 903 million and RMB 1.206 billion respectively, with corresponding growth rates of 71.2%, 38.6% and 33.6% respectively, and corresponding PE of 66x, 47x and 35x respectively. Maintain the “buy” rating.
Risk warning: price fluctuation risk of API; Novartis’s product volume is lower than the expected risk; The company’s new project promotion is less than the expected risk.
