2022Q3 resumes rapid growth and further improves operational efficiency

On October 30, Medici released its report for the first three quarters of 2022. In the first three quarters of 2022, revenue reached 1.24 billion yuan, up 57.74 percent over the same period last year; net profit returned to the mother was 278 million yuan, up 53.68 percent over the same period last year; and 263 million yuan was deducted from non-return net profit, up 49.31 percent over the same period last year. Q3 realized operating income of 497 million yuan, an increase of 65.12% over the same period last year, an increase of 28.57% over the same period last year, a net profit of 115 million yuan, an increase of 70.20% over the same period last year, and a net profit of 109 million yuan, an increase of 64.01% over the same period last year. Sufficient orders provide a guarantee for performance growth, while the company continues to improve its technical level and R & D service capabilities, and the synergy of the business sector is enhanced. with the further release of laboratory capacity, the company's operating income has achieved rapid growth. In terms of profitability, the gross profit margin in the first three quarters was 44.03%. The gross profit margin of Q3 was 43.27%, an increase of 0.87 pct over the same period last year, and the gross profit margin remained basically stable. We are optimistic about the long-term development of the company and maintain the original profit forecast. it is estimated that the net profit of the company from 2022 to 2024 will be 4.57 and 7.21 billion yuan, the EPS will be 5.26, 8.30 and 12.62 yuan, and the current share price will correspond to 42.2, 26.7 and 17.6 times of PE, maintaining the "buy" rating.

Production capacity has been put into operation one after another, increasing investment in research and development, and the new technology platform helps the company to develop its two wholly-owned subsidiaries, Medici (Hangzhou) and Medici Cipper, which are officially put into operation at 2022Q3. Among them, Medisi (Hangzhou) will introduce biopharmaceuticals and AI Pharmaceuticals to become the company's brand-new CRO research center; Medisi Puri plans to invest 1.57 billion yuan, to build an area of more than 150000 square meters, will establish an one-stop drug research and development platform leading domestic new drug research and innovation capabilities. We expect that as the two subsidiaries are put into operation one after another, the operating scale and performance level of Medici will please climb to another high-rise building. At the same time, the company continues to increase investment in research and development, forward-looking layout of biomedical cutting-edge technology. Medici insists on taking R & D and technological innovation as the core driving force of the company to promote the innovation and construction of R & D platform. 2022Q3 invested 35.7257 million yuan in R & D, an increase of 63.13% over the same period last year; the company has built a series of platforms in the most cutting-edge technological fields of biomedicine, such as ADC, PROTAC and nucleic acid drugs. At the same time, the company has reached a number of strategic cooperation in new technology, which is expected to contribute new momentum to the company's future performance growth.

Risk tips: patent risk; capacity investment is not as expected; loss of core technical personnel; environmental protection and production safety risk.