The traditional API business is steady, and the variety reserve is poised for development: the company has been deeply involved in specialty APIs and intermediates for many years. It is one of the companies that have exported the most types of specialty raw materials to Europe domestically. Market share has continued to increase. In 2021, the company's perindopril and clostridium series products accounted for more than 50% and 30% of the global market share respectively.
In the future, as the global aging trend accelerates, demand for chronic diseases may drive steady growth in the API market. The company actively promotes R&D registration and lays out expired patent products such as Saban, Liquetin, etc., which is expected to contribute incrementally and improve the gross profit margin of the business in the future. At the same time, the company is actively deploying production capacity construction, with a production capacity of about 1,000 tons under construction, and the harvest period for high-quality production capacity is gradually approaching.
Cooperation with MSD entered the delivery period, and production capacity was released one after another: In 2021, the company successfully signed a ten-year strategic cooperation with MSD, a major customer, and CDMO developed rapidly. From 2020 to 2021, the company's CDMO revenue increased from 120 million yuan to 265 million yuan, an increase of 118% over the previous year, and the number of projects increased from 175 to more than 200. Looking ahead, on the one hand, the first batch of collaborations with MSD entered commercial delivery, contributing to revenue elasticity; on the other hand, the company actively laid out new technology platforms and production capacity to open up space for long-term growth.
Weakened and developed, the pharmaceutical business ushered in a period of rapid development: the company laid out the formulation business closely around “technology transfer+independent declaration+domestic MAH cooperation”: 1) Cooperated deeply with KRKA to quickly enrich the pipeline and cultivate its own production, sales and R&D capabilities; 2) Lay out independent product research and development to continuously enrich the product hierarchy; 3) Actively expand domestic MAH customer cooperation; through collaborative development through three methods, the formulation business gradually entered a rapid development zone. In 2021, formulation revenue was 153 million yuan, an increase of 103.58% over the previous year.
Investment advice: We expect the company's revenue for 2022-2024 to be 1,723, 22.16, and 2,772 billion yuan respectively, up 36.96%, 28.57% and 25.10%; net profit to the mother is 352, 3.53, and 467 million yuan, up 147.06%, 0.28%, 32.28% over the previous year; corresponding PE is 10.76, 10.73 and 8.11 times, respectively. The first coverage gave an “increase in holdings” rating.
Risk warning: R&D progress falls short of expectations; capacity construction progress falls short of expectations; risk of exchange rate fluctuations.