\u3000\u3000 Pharmaron Beijing Co.Ltd(300759) (300759)
Key investment points
Pre increase: the income slightly exceeded the expectation, and the adjusted non GAAP net profit met the expectation
Pre increase in 2021: in 2021, the company realized revenue of 7.341-7.495 billion (YoY 43% – 46%), net profit attributable to parent company of 1.583-1.700 billion (YoY 35% – 45%), deducting non net profit of 1.281-1.361 billion (YoY 60% – 70%), revenue of 2.039-2.193 billion (YoY 31.72% – 41.67%) and net profit attributable to parent company of 579-696 million (YoY 51.10% – 81.72%), Deduct non net profit of 350-430 million (YoY 79.53% – 120.59%). In 2021, the adjusted non GAAP net profit was 1.394-1.5 billion (YoY 31% – 41%), and in 2021q4, the adjusted non GAAP net profit was 346-452 million (YoY 14.41% – 49.46%). According to the median value, the adjusted non GAAP net profit YoY in 2021q4 was 399 million (YoY 31.93%), which was in line with the expectation.
The main business is strong, and the non net profit margin deducted in 2021q4 has increased year-on-year
Considering the negative impact of the 6.5% year-on-year decline in the exchange rate of the US dollar against the RMB in 2021, the revenue side of the company will still maintain a high growth rate of 43% – 46% in 2021, slightly exceeding our previous profit forecast. We believe that this reflects the strong growth momentum of the company’s main business. We found that if the non net profit margin deducted in 2021q4 is higher than that in 2020q4 according to the median, it may be related to the increase of the gross profit margin of the company’s CMC and other businesses.
Cdmo capacity continues to release, and it is optimistic that the revenue will maintain high growth from 2022 to 2023
The company’s Shaoxing cdmo production capacity will continue to be put into operation in 2022 (we expect to put in 200 m3 in 2022q1 and 400 m3 in 20222q2). We are optimistic that the continuous realization of the diversion of the company’s laboratory chemistry cmc-cdmo project will maintain high growth in cdmo business revenue. This is also expected to be an important driving factor for the company to maintain high growth in revenue from 2022 to 2023.
Profit forecast and valuation
Through the split, it is found that the positive income of convertible bonds brought by the fluctuation of 2021q4 H share price and the investment income brought by the change of fair value drive the net profit attributable to the parent company of 2021q4 to exceed our previous expectations. Therefore, we raised the profit forecast for 2021. We expect the company’s EPS to be 2.06, 2.79 and 3.76 yuan / share from 2021 to 2023. The closing price on January 21, 2022 corresponds to 45 times of PE in 2022 (33 times of PE in 2023), maintaining the “buy” rating.
Risk tips
Management risks brought by accelerated business layout, short-term fluctuations of orders, management challenges brought by clinical business layout, and new business expansion is less than expected risks.
