Main points of investment
Recently, the company released its 2021 annual report and 2022 quarterly report. In 2021, the company achieved operating income of 1.258 billion yuan, an increase of 5.43% over the same period last year, a net profit of 143 million yuan, a decrease of 8.62% over the same period last year, and a net profit of 126 million yuan, an increase of 56.46% over the same period last year. In 2021, the comprehensive gross profit margin of the company's main business was 37.35%, an increase of 0.96% over the same period last year, mainly affected by changes in international market prices, rising prices of bulk raw materials, foreign exchange rate fluctuations, and the company's strategic adjustment. In 2022, Q1 Company realized operating income of 500 million yuan, an increase of 47.86% over the same period last year, a net profit of 115 million yuan, an increase of 128.94% over the same period last year, and a net profit of 109 million yuan, an increase of 142.75% over the same period last year.
Merck & Co Inc's cooperation is progressing smoothly, and the CDMO business has doubled. In 2021, the sales revenue of CDMO business reached 265 million yuan, an increase of 118.31% over the same period last year; and the gross profit margin was 44.54%, an increase of 18.99% over the same period last year. During the reporting period, the company signed a 10-year CDMO strategic cooperation agreement with Merck & Co Inc, a large multinational pharmaceutical company, in the fields of pet medicine, veterinary medicine and animal health. By the end of the 2021 annual report, the nine projects in the first phase of R & D have carried out different stages of work, and the technology transfer has been gradually completed and is about to be commercialized.
Profit forecast and rating: the company's CDMO business and preparation business are expected to maintain a high growth rate in the future, API intermediate business will recover, and the company's future performance is expected to maintain rapid growth. We adjust our profit forecast and expect the company's EPS to be 1.96,2.77 and 3.68 yuan respectively from 2022 to 2024, and the PE corresponding to the closing price on April 28, 2022 are 22.3X, 15.8X and 11.9X respectively, maintaining a "prudent overweight" rating.
Risk tips: industry policy risk; product quality control risk; raw material price rise risk; R & D and sales risk not as expected.