\u3000\u3000 Wuxi Apptec Co.Ltd(603259) (603259)
Event: the company issued a performance pre increase announcement. In 2021, it achieved a revenue of 22.819-22.902 billion yuan (+ 38.0% – 38.5% YoY), a net profit attributable to the parent company of 4.973-5.032 billion yuan (+ 68.0% – 70.0% YoY), and a deduction of non attributable net profit of 4.007-4.055 billion yuan (+ 68.0% – 70.0% YoY). The performance exceeded the market expectation.
Performance exceeded expectations and small molecule crdmo grew strongly. In 2021, the company realized a net profit attributable to the parent company of RMB 4.973-5.032 billion (+ 68.0% – 70.0% YoY), exceeding market expectations. Among them, the income from changes in fair value of non current financial assets and investment income are expected to be 1.663 billion yuan (- 7.3% YoY), slightly lower than the level in the same period of last year; The amount of non cash book fair value loss is expected to be 1 billion yuan (- 25.8% YoY), lower than the loss in the same period of last year. The company’s higher than expected revenue in the whole year was mainly due to the integrated small molecule development and production business (crdmo). 42 commercial projects and 49 clinical phase III projects were operated in the whole year, with a total of 732 molecules added. The pipeline was rapidly developed, the growth of relevant orders was strong, and the production capacity continued to expand. It is expected to maintain a high growth rate in the future.
There are many businesses, and there is great potential for cell gene therapy services. The company’s business has developed in an all-round way. Besides the small molecule service platform, it has made efforts to build a number of technical platforms, including the largest laboratory analysis and testing platform in Asia Pacific; The world’s largest discovery biology enabling platform; The only CGT cdmo service platform in Europe, America and Asia. Among them, Wuxi ATU was officially laid out in China and Europe in 2021, and has successfully obtained 24 preclinical and clinical phase I projects and 2 commercial projects in China. The company acquired oxgene to further expand the global CGT cdmo layout and enrich the production process technology platform, which is expected to revolutionize the production cost of cell gene therapy. We believe that the company’s drug development technology level is strong, the production capacity layout continues to expand, and the bonus advantage of engineers is not reduced, and the global market share is expected to further increase.
Profit forecast, valuation and rating: considering that the annual performance forecast for 2021 exceeded the market expectation, the strong growth of small molecule crdmo business and the smooth progress of Wuxi ATU’s business in China, we raised the company’s EPS forecast for 21-23 years to 1.69/2.27/3.03 yuan (13.3% / 12.9% / 13.5% respectively compared with the previous time), and the corresponding net profit attributable to the parent company increased by 69.2% / 34.2% / 33.2% respectively year-on-year. The PE of A-Shares corresponding to 21-23 years is 66 / 49 / 37 times, maintaining the “buy” rating; The corresponding PE of H shares in 21-23 years is 60 / 45 / 34 times, maintaining the “buy” rating.
Risk warning: the risk of epidemic persistence; The R & D investment of pharmaceutical enterprises is less than expected; Increased competition.
