\u3000\u3000 Joinn Laboratories (China) Co.Ltd(603127) (603127)
The company released the performance forecast for 2021: during the reporting period, the net profit attributable to the parent company is expected to be 543-574 million yuan, with a year-on-year increase of about 228 million yuan to 259 million yuan, with a year-on-year increase of about 72.3% to 82.3%; After non deduction, the net profit increased by about 224 million yuan to 255 million yuan year-on-year, with a year-on-year increase of about 76.6% to 87.4%.
The performance is better than expected, and the main business is expected to continue to grow rapidly: according to the median forecast, the growth of the profit side in the fourth quarter of a single year is further accelerated, and we expect the revenue side to also show an accelerated growth trend in the fourth quarter of a single year; The company’s revenue increased by 35.7% year-on-year in the first three quarters, and we expect the annual revenue to increase by about 40% year-on-year. Excluding the steady growth and consolidation increment of biomere, we expect that the revenue end of the parent company is expected to achieve faster growth, and the growth of its main preclinical evaluation business continues to be strong. In addition, affected by many factors such as government subsidies, gains from trading financial assets and losses on foreign exchange settlement of funds raised by Hong Kong stocks, the impact of non recurring profits and losses after income tax on net profit was about 27 million yuan, an increase of about 4 million yuan year-on-year.
Full orders and rapid release of new production capacity: during the reporting period, the company has always strengthened technological innovation, continued to strengthen R & D support for the original innovation of innovative drugs and new technology platforms, won the trust of innovative R & D enterprises, continuously expanded the scale of scientific research and technology team, and continuously enhanced its ability to undertake orders and services, We expect new orders to maintain rapid growth throughout the year. In addition, with the company’s previously planned new production capacity of about 7500 square meters of animal houses in Suzhou put into operation, and the subsequent planned expansion of safety assessment production capacity in Suzhou, Guangzhou and Chongqing, the orders on hand are expected to continue to be fully released.
New business and international expansion are worth looking forward to: previously, the Chinese newspaper disclosed that 1) the company has established and put into operation three phase I clinical centers, with a total number of beds of 200, orderly promotion of multiple clinical projects and rapid development of early clinical services. 2) The subsidiary Suzhou Qichen has created 4 gene editing mouse models and 9 gene editing cell lines, which have been applied to preclinical evaluation. In terms of large animal research, it has obtained the first batch of somatic cloning Bama pigs, and has perfect mammalian gene editing and cloning technical ability. 3) The company acquired biomere last year to increase its business capacity and enhance Zhaoyan’s overseas brand strength. During the reporting period, it completed H-share listing, which is expected to accelerate the international business layout and open the growth ceiling.
Profit forecast and rating: we expect the net profit attributable to the parent company from 2021 to 2023 to be 559 million yuan, 739 million yuan and 964 million yuan, with a year-on-year increase of 77.5%, 32.2% and 30.4%. The current share price corresponds to 66x, 50x and 38x PE. We are optimistic about the rapid development of the company as a leader in the safety assessment field of cro industry and maintain the “buy” rating.
Risk tip: China’s investment in innovative drugs is less than expected, the expansion of new business is less than expected, and the industry competition is intensified
