Event
According to the company's 2021 annual report, the company achieved revenue of 283 million yuan in 2021, an increase of 41.5 percent over the same period last year; net profit of 63.52 million yuan, up 31.3 percent; net profit of 59 million yuan, up 42.5 percent; diluted EPS 1.22 yuan per share, up 28.4 percent; and weighted average ROE 13.52 percent, an increase of 1.9 percent over the same period last year.
Brief comment
The performance is growing rapidly, and the income of the isolated product line is growing significantly.
The company's performance is in line with expectations, and the high growth is mainly due to the overall prosperity of the biopharmaceutical industry, with the exception of sterilized products due to 20 years of high technology, other products have achieved high growth, especially the rapid growth of income from isolated products. In 2021, revenue from company isolation, organic analysis and microbiological testing products increased by 153%, 51% and 23% respectively over the same period last year, and the gross profit margin of quarantined products was 52.45%, an increase of 2.58 percentage points over the same period last year. At the same time, the gross margins of the above three types of business were 30.72 million yuan, 5.24 million yuan and 9.64 million yuan respectively, an increase of 165.88%, 52.48% and 22.72% over the same period last year, contributing 66.48% of the total operating margin in 2021.
Launch the equity incentive plan, bind core interests to demonstrate development confidence the equity incentive award price of 41.66 yuan is 50% of the average price of one trading day before the announcement of the incentive plan, and the total size is 2% of the total equity. In terms of performance evaluation, the income and profit in 2022-2024 will increase by 40%, 80% and 120% respectively compared with 2021, and the growth rate is relatively higher in income and profit growth. The equity incentive plan is expected to amortize 1363 yuan, 1649 yuan, 806 yuan and 2.31 million yuan respectively from 2022 to 2025.
NC membrane is successfully mass produced and is expected to benefit from domestic substitution.
In March, the company successfully realized the mass production of NC membrane (nitrocellulose membrane). In immunochromatographic diagnostic reagents, NC membrane is not only used as the carrier of Cramp T line, but also the place of immune reaction, and is one of the key raw materials of antigen detection products. Because of its high technical barriers, there are not many NC film manufacturers at home and abroad, and the production capacity is seriously insufficient. Tailin Life Sciences established a project at the beginning of 2020 to tackle the development of NC membrane for immunochromatographic diagnosis, through close cooperation with downstream well-known IVD manufacturers, after a large number of repeated tests and optimization, finally achieved mass production of NC membrane in March this year, and it is reported that the main functions and key performance indicators are excellent, and can achieve domestic substitution of imported NC membrane.
Creeping speed, thickness, surface defects and inter-batch consistency are the core technical indicators. At present, the main processes of producing nitrocellulose film include liquid dispensing, filtration, coating molding, adding surfactant, drying, winding and slitting. The key performance indicators include stable climbing speed, uniform thickness, defect-free surface quality and high uniformity within and between batches. When producing nitrocellulose membrane, there will be a large number of bubbles and impurities on the surface, which can easily cause abnormal phenomena such as 45 degree inclination or surrounding wetting of nitrocellulose membrane, which affects the quality of nitrocellulose membrane.
COVID-19 testing boosts, NC film welcomes the opportunity of domestic replacement.
The main global NC membrane suppliers include Sedolis, Millipore, Pall, Japan Toyo, Whatman, etc., while domestic suppliers mainly include Beihua shares, Tianlun membrane, Yineng Film Industry, Boyou Biology, and so on. Previously, the domestic market mainly purchased imported membranes. For example, Aotai Biology disclosed in its prospectus that more than 90% of its purchases came from Sedolis. Boosted by COVID-19 antigen testing, the global demand for NC membrane is growing, supply and demand is tight, bringing domestic alternative opportunities, the company's NC membrane successful mass production, is expected to benefit from the localization of NC membrane.
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 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. 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.
The expense rate of sales and management has dropped significantly, and from the point of view of the positive reporting of the order boom, the company's gross profit margin is basically the same as the same period last year, with a slight decrease of 1 percentage point to 61.9% and a slight decrease of 1.7 percentage point to 22.4%. This is mainly due to increased investment in research and development during the reporting period. In 2021, the company's sales, management and R & D expenses were 3914 yuan, 2480 yuan and 55.05 million yuan respectively, an increase of 25.8%, 6.2% and 45.9% respectively over the same period last year, of which the rates of sales and management expenses were 13.8% and 8.8% respectively, down 1.7% and 2.9% respectively from the same period last year. The rate of R & D expenditure was 19.4%, an increase of 0.6% over the same period last year. From the perspective of cash flow, the company's operating cash flow declined to a certain extent in 2021 compared with the same period last year, mainly due to an increase in cash paid for goods and services, while the inventory balance increased significantly by 94% compared with the same period last year, and the turnover days increased by 55 to 314 days. We believe that it is mainly due to the company's booming orders, active procurement of raw materials and the construction of a new equipment manufacturing base. In terms of sales payback, the company's current income ratio in 2021 is 128%, which is still very healthy, and the turnover days of accounts receivable have dropped by 10 days to 36 days compared with the same period last year. In addition, contract liabilities reached 91.56 million yuan at the end of 2021, a significant increase of 105% over the same period last year.
Profit forecast and investment rating
We estimate that the company's operating income in 2022, 2023 and 2024 will be 5.7,7.8 and 1.02 billion yuan respectively, and its net profit will be 1.2,1.6 and 200 million yuan respectively, with corresponding growth rates of 87,34 and 25% respectively, corresponding to 36,27 and 22 times of PE.
Risk hint
New technology development risk, market expansion risk, industry competition aggravating risk, industry policy risk and so on.