\u3000\u3000 Joinn Laboratories (China) Co.Ltd(603127) (603127)
Event: on January 20, 2022, the company released the performance forecast for 2021. In 2021, the company is expected to realize a net profit attributable to the parent company of 543-574 million yuan, a year-on-year increase of 72.3% – 82.3%; The non net profit deducted was 516-547 million yuan, a year-on-year increase of 76.6% – 87.4%.
The performance exceeded expectations, with a record high net profit attributable to the parent company and deducting non net profit in a single quarter, and continued to perform strongly. In 2021, the company expects to realize the median net profit attributable to the parent company of about 559 million yuan (+ 77.3%), and the median net profit deducting non net profit of about 547 million yuan (+ 82.0%), which continues to perform well. Benefiting from the rapid growth of the industry and the strong competitive advantage of the company, we expect the preclinical evaluation business of the company to continue to grow rapidly. Quarterly, the median return to parent in 2021q4 is about 311 million yuan (+ 57.9%), and the non net profit deducted in 2021q4 is 314 million yuan (+ 62.4%), which still maintains a high growth trend under the trend of high base last year. We expect that ① the proportion of innovative therapy projects continues to increase due to the expansion of new technology platform; ② With the continuous expansion of R & D personnel and the continuous accumulation of technical experience, quantitative changes have produced qualitative changes, and the operation efficiency has been greatly improved; ③ The company continued to improve its fund management ability and brought additional income. In addition, in terms of orders, due to the continued strong demand for preclinical evaluation business and Zhaoyan’s professionalism and brand strength in this segment, we expect the company’s new orders to continue to maintain a high-speed growth of more than double digits in 2021.
Overseas expansion + industrial chain extension, continuous development, opening up long-term growth space. 1) Continue to expand overseas preclinical cro share: the acquisition of American preclinical cro biomere will broaden its vision to the world. With its own animal breeding base and engineer bonus, it is expected to win advantages in cost and efficiency and gradually expand its market share. We expect biomere’s revenue to reach more than double-digit rapid growth according to the percentage of completion method in 2021, Continue to bring new increment. 2) Actively extend clinical cro and pharmacovigilance services: ① clinical cro: Suzhou Zhaoyan pharmaceutical focuses on early clinical and be outsourcing services, which is currently in a high-speed growth period with a low base. ② Pharmacovigilance: zhaoyanmingxun has comprehensive business coverage and is expected to enjoy the industry dividend and bring sustained and rapid growth.
Profit forecast and Valuation: we estimate that the company’s revenue from 2021 to 2023 will be RMB 1.660, 2.205 and 2.862 billion, with a year-on-year increase of 54.28%, 32.85% and 29.79%, and the net profit attributable to the parent company will be RMB 464, 626 and 825 million, with a year-on-year increase of 47.20%, 35.03% and 31.78%, corresponding to EPS of RMB 1.22, 1.65 and 2.17. China’s preclinical evaluation outsourcing industry has a high prosperity and the company’s leading position is stable. In the future, it is expected to bring long-term growth and maintain the “buy” rating by expanding overseas markets and vertical extension of the industrial chain.
Risk warning events: the public information used in the research report may have the risk of information lag or untimely update. The risk of production capacity upgrading is less than expected, the risk of loss of core technicians, the risk of raw material supply and price rise, the risk of gross profit margin decline, the risk of less than expected integration after biomere acquisition, and the risk of exchange rate fluctuation.
