Event: the company issued a performance forecast for 2022, which is expected to achieve a net profit of RMB 2.19-248 million, an increase of 50.07%-70.01% over the same period last year; deducting a non-net profit of RMB 2.08-237 million, an increase of 55.85%-77.66% over the same period last year.

CDMO, superior varieties continue to drive growth, new production capacity, new product increment can be expected. The company's performance will continue to grow rapidly in 2022, which we expect to be mainly driven by the rapid growth of CDMO, gout and nervous system products. In a single quarter, the net profit of 22Q4 was 4192-71.02 million yuan, up 17.70% and 99.41% over the same period last year. Looking forward to the whole year, the company's new workshop has been put into production and climbing, and the increment of new products such as glucose sodium is expected. In addition, Azvudine API has also been approved by NMPA recently, which is expected to contribute to a certain increment, and the company's performance is expected to maintain rapid growth driven by new production capacity and new products.

The fast-growing API enterprises with technological entrepreneurs at the helm and supported by the "big R & D" system, the rapid transformation and development of CDMO, the continuous relay of API and intermediate varieties, the high-flying preparation strategy brings new growth points in the long term, and is optimistic about the long-term growth of the company. 1) the company's outstanding characteristics: with the concept of "large R & D to achieve unconventional and rapid development", vigorously invest in scientific and technological innovation, and form a rich gradient combination of products to promote rapid development. For more than 10 years, the company has joined the leading echelon of domestic pharmaceutical manufacturing. 2) relative valuation premium: high R & D investment, high performance growth, and rapid business expansion continues to improve the ceiling. With the rapid development of CDMO, the production capacity of API and intermediates is gradually released, and the performance is expected to maintain rapid growth. in addition, the extension of the preparation is expected to bring new growth points in the long term, among which the ischemic stroke treatment drug BZP has the potential of blockbuster and is expected to be put on the market in 2025. 3) the growth originates from the rapid transformation and development of CDMO, the continuous relay of API and intermediate varieties, and the high preparation strategy brings new growth points in the long term.

Profit forecast and investment advice: according to the performance forecast, considering that CDMO and dominant varieties continue to drive the company's high performance, we adjust our profit forecast and expect the company's 2022-2024 revenue to be 8.22,11.54 and 1.565 billion yuan, up 44.3%, 40.4% and 35.6% over the same period last year. The net profit of homing was 2.34,3.28 and 459 million yuan (2.27,3.18 and 448 million yuan before the adjustment), up 60.1%, 40.4% and 40.1% over the same period last year. The current share price corresponds to 2022-2024 PE times 47-33-24. Considering the rapid development of the company's CRO/CDMO, the catalysis of API intermediates released with variety and production capacity is expected to continue to release volume, generic drugs, innovative drug business layout to create a long-term new growth point, maintain the "buy" rating.

Risk tips: product research and development and technological innovation risk; international trade environment change risk; environmental protection and safety production risk; exchange rate fluctuation risk; public information lag or not updated in a timely manner.