\u3000\u3000 Joinn Laboratories (China) Co.Ltd(603127) (603127)
Event: the company released the performance forecast for 2021. It is estimated that the annual net profit attributable to the parent company will be 543 ~ 574 million yuan, with a year-on-year increase of 72.3% ~ 82.3%; The net profit attributable to the parent company after deducting non profits increased by about 224 ~ 255 million yuan year-on-year, with a year-on-year increase of about 76.6% ~ 87.4%.
The performance continues to grow rapidly, and the safety assessment business is still the main growth force. According to the performance forecast of 2021, the median net profit attributable to the parent company is expected to be about 559 million yuan, with a year-on-year increase of 77.3%; The net profit attributable to the parent company after deducting non profits was about 516-547 million yuan, with a median value of about 530 million yuan, an increase of 82% year-on-year. The corresponding net profit attributable to the parent company in Q4 in 2021 was about 311 million yuan, with a year-on-year increase of 57.9%, and the growth trend exceeded expectations. Under the high base of last year, Q4 performance still achieved speed-up. On the one hand, it is due to the peak of experimental conclusion at the end of the year. The orders and newly signed orders of the company in the first three quarters will be completed in Q4 to form revenue, which will affect the proportion of Q4 revenue. On the other hand, the company continued to strengthen the R & D support of innovative drugs and original innovation of new technology platforms, obtained the support of innovative R & D enterprises, improved the preclinical penetration rate, and the expansion of preclinical evaluation business brought more orders.
Sufficient orders in hand, go deep into the overseas market and expand the layout. In terms of orders, the company has sufficient orders on hand. In the first three quarters, the company’s contract liabilities were 1.04 billion yuan, a year-on-year increase of 92.4%, and the contract liabilities in each quarter were 1.1/2.3/460 billion yuan respectively. The increase of contract liabilities obviously indicates that the company has increased more orders and the income of advance payment has increased. It is expected that due to the high demand for preclinical safety assessment services, high-quality services are in short supply. With the continuous establishment of the company’s facilities in Suzhou, Guangzhou and Chongqing and the continuous expansion of safety assessment capacity, the company’s orders in hand will be fully released and converted into revenue. The company acquired biomere to enrich the preclinical safety assessment business and enhance the brand influence in the international market. Relying on the company’s experience in building animal houses and the strong market attraction and pricing ability in safety assessment, the company is expected to gradually expand the foreign market and increase guide orders through cost and efficiency advantages.
Profit forecast and investment suggestions. It is estimated that the EPS from 2021 to 2023 will be 1.45 yuan, 1.94 yuan and 2.52 yuan respectively, and the corresponding PE will be 67 times, 50 times and 38 times respectively. The company is a leading enterprise in preclinical drug evaluation in China, and its performance is expected to maintain high growth and maintain the “buy” rating.
Risk warning: risk of policy changes in the pharmaceutical industry; Rising risk of raw materials; Order fluctuation risk; Brain drain risk.
