Events:
Da'anji released three quarterly results: in the first three quarters, the company achieved a year-on-year increase of 363.61% in operating income of 3.56 billion yuan, a year-on-year increase of 1817.41% in net profit of 1.537 billion yuan, and a year-on-year increase of 2089.31% after deducting 1.521 billion yuan.
Main points of investment:
Benefiting from the higher-than-expected results of COVID-19 's epidemic in the first three quarters of Da'an, the revenue of reagent kits and instruments maintained high growth: the company's performance exceeded the upper limit of the performance forecast in the first three quarters, and its operating income increased by 363.61% in the first three quarters compared with the same period last year. The net profit of 1.537 billion yuan increased by 1817.41% over the same period last year. In the third quarter, the revenue of 1.427 billion yuan increased by 465.77% over the same period last year, and the net profit of 759 million yuan increased by 3759.55% over the same period last year. In terms of detection kit, Daan deeply ploughed the research and development of detection kit for infectious diseases, COVID-19 quickly developed novel coronavirus (2019-nCoV) nucleic acid detection kit (fluorescent PCR method) after the outbreak of the epidemic, and on September 24, the company's new rapid detection product for crown nucleic acid was approved and put on the market by the State Drug Administration, achieving 28-minute results. The new detection kit uses rapid reverse transcriptase and hot start enzyme, the reverse transcription time is shortened from 15-30 min to 2min, the hot start time is shortened from 10-15 min to 2min, and the extension time of PCR is shortened from 30-60 s per cycle to 10 s. In terms of instruments, the real-time fluorescence quantitative PCR instrument AGS 8830 developed by the company in September has been approved to go on the market with a rapid detection time of 30-40min. The stack itself has nucleic acid extraction instrument and molecular hybridization instrument, as well as imported fluorescence quantitative PCR instrument and nucleic acid extraction instrument to meet the needs of different application scenarios.
The global COVID-19 epidemic has ushered in the second round of spread, and Da'an 's fourth-quarter results are expected to continue high growth:
With the autumn and winter flu season, the world is ushering in the second round of COVID-19 epidemic spread, with the number of newly diagnosed cases reaching a record high in France, Germany, Italy and the United Kingdom in a single day. France closed the country from October 31 to December 1 at least. Germany closed the country from November 2 to the end of November. COVID-19 test kits are in great demand overseas. At present, the company's test kits have obtained EU CE certification and are on the WHO list, and have been exported to 140 countries and regions. As the overseas epidemic continues to spread in the fourth quarter, export revenue is expected to contribute to a new increase. Once a large-scale screening of confirmed cases is found, Xinjiang and Qingdao full-name screening is required to complete more than millions of tests within a few days. The company's newly developed rapid testing test box and equipment can detect up to 10,000 people within 8 hours to meet the needs of rapid screening. In addition, Daan is the only enterprise in the country that has won all the bids in the centralized procurement of COVID-19 nucleic acid testing kits in various provinces, and the domestic anti-epidemic testing kits are the first in supply. therefore, we are optimistic that the company has multi-gradient supporting products to maintain high growth under the second round of COVID-19 epidemic outbreak in the fourth quarter.
Nucleic acid testing industry welcomes the golden period of development, the company expands production to meet the development inflection point: nucleic acid testing is essential under the catalysis of COVID-19 epidemic situation, the state actively promotes the construction of grass-roots nucleic acid detection capacity, and the nucleic acid testing industry ushered in the first year of development. Da'an seized the development opportunity to expand production capacity and invested about 300 million yuan in new R & D and production buildings with the income accumulated by COVID-19. At present, there are three production lines with an output of 40,000 person / month per production line, and five new production lines are planned. Each production line has an output of 100000 person / month. In addition, the company has ploughed the nucleic acid testing industry for 32 years and mastered the whole industry chain, including R & D and production, core raw materials, quality control products, instrument R & D and production, testing services, and so on. We are optimistic that during the period of concentrated outbreak of the nucleic acid testing industry, Daan is expected to take the lead by virtue of the integrated layout of molecular diagnosis.
Profit forecast and investment rating: as one of the representative companies of nucleic acid integrated testing, we are optimistic that the company will continue to develop under the second wave of epidemic spread in autumn and winter. It is estimated that the EPS of the company in 2020-2022 will be 2.37,1.27,1.46, and the PE of the previous share price will be 15.97,29.74,25.82, maintaining the buy rating.
Risk hints: policy change risk; molecular diagnosis upstream raw material fluctuation risk; COVID-19 epidemic situation towards uncertain risk; uncertainty of the impact of major shareholder replacement on the company.