Event

According to the company's semi-annual report for 2021, 2021H1 achieved a revenue of 111 million yuan, an increase of 28.8% over the same period last year, a net profit of 27.65 million yuan, an increase of 51.1% over the same period last year, and a net profit of 26.54 million yuan after deducting non-return, an increase of 70.1% over the same period last year. Diluted EPS 0.53 yuan per share, an increase of 43.2% over the same period last year, and a weighted average ROE of 6.04%, an increase of 1.44% over the same period last year.

Brief comment

The product line blossoms at many points, and the performance is growing at a high speed.

In the previous performance forecast, the company expected to report the return to the mother net profit range of 2561-31.1 million yuan, deducting non-net profit of 2431-29.8 million yuan, this report is in line with expectations. The company's performance grew rapidly, mainly due to the boom in orders, and the revenue of each product line increased, of which the product line revenue of microbiological testing, isolation, sterilization and organic analysis increased by 35%, 47%, 11% and 50%, respectively. From a single-quarter point of view, Q2 achieved revenue of 63 million yuan in a single quarter, an increase of 38.6% over the same period last year and 31.3% over the same period last year; the net profit returned to the mother was 18.06 million yuan, up 64.9% from the same period last year and 88.1% from the previous quarter; deducting the non-return net profit of 17.44 million yuan, an increase of 68.2% over the same period last year and 91.6% month-on-month growth.

Actively distribute the equipment consumables of the cell therapy industry chain

The company announced in January 2021 that it had changed its original fund-raising project, carried out convertible bond financing at the same time, and planned to invest 300 million yuan to build an industrial equipment manufacturing base for cell therapy. The products mainly include cell preparation workstation, cell aseptic sub-assembly workstation and matching consumables, honeycomb cell culture equipment, intelligent cell incubator, automatic aseptic detection and culture system, etc., which is expected to be put into production in 2024 and reach production by 2027. The after-tax internal rate of return is 27.19%.

The company has carried out research and development of cell therapy workstations and other equipment for as long as 5 years, and applied for 17 patents, of which 8 have been authorized. Since 2018, the company's cell workstations and other products have been sold on a small scale.

The localization of consumable materials for cell therapy equipment is imperative and has great potential.

Cell therapy is a method to repair tissues and organs by using autologous or allogeneic cells with specific functions, which mainly includes stem cell therapy and immune cell therapy, which has developed rapidly in recent years. By 2020, stem cell therapy projects in China account for about 10% of the world, and clinical research on immune cell therapy accounts for about 1. 3% of the world. With the approval of Fosun Kate Yigilisai injection, domestic CART cell therapy has officially entered a commercial era. Frost Sullivan predicts that the domestic market space for CART cell therapy will grow from 200-300 million yuan in 2021 to 28.7 billion yuan in 2030, and the overall market space for cell therapy will grow from 1.3 billion yuan in 2021 to 58.4 billion yuan in 2030. Although the pricing of domestic CART products has been significantly lower than Europe and the United States and other developed countries, but for domestic patients, acceptance still needs to be improved, reduce costs, prices are still urgent demand, cell therapy related equipment consumables localization is imperative, great potential.

During the period of cost reduction and efficiency efficiency, the expense rate dropped sharply, and from the point of view of the positive reporting of the order boom, the company's gross profit margin was basically the same as the same period last year, slightly reduced by 1 percentage point to 64.2%, and the net profit rate increased significantly by 3.7 percentage points to 24.9% compared with the same period last year, mainly due to the reduction of expenses during the period In the first half of 2021, the company's sales, management and R & D expenses were 0.13,0.12 and 22 million yuan respectively, with year-on-year changes of-9%,-13% and 19% respectively, and the above three expense rates were 11.8%, 10.5% and 19.6% respectively, down 4.8%, 5.1% and 1.7% respectively over the same period last year.

From the perspective of cash flow, the company's cash flow turned negative in the first half of 2021 compared with the same period last year, mainly due to the increase in cash paid for goods and services. In the first half of the year, the proportion of cash / operating costs paid for goods and services reached 177%. A sharp increase of 84 percentage points over the same period last year, at the same time, the inventory balance increased by 83% compared with the same period last year, and the turnover days increased by 74 days to 352days. We believe that it is mainly due to the prosperity of the company's orders. Active procurement of raw materials for stock. In terms of sales recovery, the current income ratio of the company in the first half of 2021 was 116%, which was still very healthy, and the turnover days of accounts receivable decreased by 20 days to 43 days compared with the same period last year. In addition, the company reported contract liabilities of 68.17 million yuan, up 129% from the same period last year and 30% from the end of the first quarter.

Profit forecast and investment rating

We estimate that the company's operating income in 2021, 2022 and 2023 will be 3.1,4.6 and 650 million yuan respectively, and the net profit returned to the mother will be 0.70,1.10 and 145 million yuan respectively, with corresponding growth rates of 46%, 57% and 31% respectively, corresponding to 60, 38 and 29 times of PE. We are bullish on the company's cell therapy equipment business, giving a buy rating for the first time.

Risk hint

New technology development risk, market expansion risk, industry competition aggravating risk, industry policy risk and so on.