What happened: Medici released its semi-annual report for 2022. The company realized operating income of 743 million yuan, year-on-year + 53.16%; net profit of 163 million yuan, + 43.77%; and non-return net profit of 154 million yuan, + 40.39% of the same period last year.
Comments:
Income continues to grow rapidly, and the epidemic disturbs profit growth and cash flow. From the revenue point of view, although the arrival rate of employees due to the epidemic was low in the first half of the year, thanks to the strong management ability of the company, the operating income still showed a trend of rapid growth, of which drug discovery and pharmaceutical research services achieved income of 341 million yuan (year-on-year + 31.09%), preclinical research income 402 million yuan (year-on-year + 79.16%), and the main business grew steadily and rapidly. From the profit point of view, the cost of epidemic prevention in Shanghai + the operating cost of the company + the advance of non-on-duty employees has pulled down the apparent profit, which makes the profit growth rate of the company much lower than the income growth rate, and the return net profit growth rate of the company after restoration is 57.74%. From the perspective of cash flow, the company's current operating cash flow is-41 million yuan,-150.97% compared with the same period last year. The periodic slowdown in customer payback caused by the epidemic and the increase in expenditure caused by the shortage of experimental animals have a greater impact on the operating cash flow.
The profit margin fluctuates slightly, and the expense rate is pushed up by the epidemic. 2022H1, the company achieved a comprehensive gross profit margin of 44.54% (- 1.20pp) and a net return rate of 21.89% (- 1.41pp). Under the influence of experimental animals and other raw materials, the gross profit margin fluctuated slightly. During the period of the company, the expense rate is 19.5% (+ 0.73pp), in which the sales / management / R & D / financial expense rate is 3.35% (- 0.98pp) / 10.57% (+ 2.73pp) / 6.89% (- 0.12pp) /-1.11% (- 0.91%pp), respectively. Equity incentive fees and epidemic prevention fees increase the management expense rate and affect the performance of the net interest rate.
Capacity building has been continuously strengthened, and newly signed orders have increased rapidly. 2022H1, the company's overall newly signed orders are 1.668 billion yuan (year-on-year + 62.58%), including 680 million yuan for drug discovery and pharmaceutical research services (+ 42.88% year-on-year) and 988 million yuan for preclinical research (+ 79.62%). The newly signed orders of the two major businesses are growing rapidly, providing a guarantee for long-term development. In terms of production capacity, the company's total production capacity is 8.16Wm2, put into use 6.69Wm2, under construction; at the same time, the company launched the A-share fixed increase project at the beginning of 2022, which intends to raise no more than 2.16 billion yuan to build Meidi northwest Shanghai biomedical R & D and innovation industrial base, expand the laboratory of drug discovery and pharmaceutical research and application platform, and further enhance comprehensive service capacity.
Profit forecast and investment rating: from 2022 to 2024, we expect the company's operating income to be RMB 18.90, 2879, and 4.245 billion yuan, an increase of 61.9%, 52.4%, 47.4%, and net profit of 4.74%, 7.18, 10.70 million yuan, respectively, an increase of 67.8%, 51.7%, 49.0%, corresponding to 2022-2024 PE, which is a multiple of 60-40-27.
Risk factors: increased competition in the industry, the decline of R & D investment and outsourcing demand in the pharmaceutical industry, domestic and international policies, the loss of core technical personnel and other risks.