Focus on the SMO field to enable clinical research and development. Prius is a leading domestic SMO company that can provide customers with one-stop clinical trial site management outsourcing services. As of 2023Q3, the company has participated in 2,800+ international and domestic SMO projects, promoted the listing of 130+ products at home and abroad, helped the sponsors efficiently and quickly advance the implementation and execution of clinical trials, and enabled new drug research and development.
The SMO market space continues to expand, and the market share is expected to be concentrated in the lead. Benefiting from the introduction of clinical trial policies and the innovation and transformation of domestic pharmaceutical companies, the domestic SMO industry market is growing rapidly. It is expected to reach 35 billion yuan by 2030, and the CAGR is 18.3%. Furthermore, compared with the high concentration of the Japanese SMO industry in developed countries, China's SMO market share is expected to be further concentrated in leading positions.
Orders and people resonate to drive high future growth. In recent years, the company's new orders and on-hand orders have grown rapidly, and future performance is highly certain. The number of new 2023H1 orders and on-hand orders was 629 million yuan and 1,754 million yuan respectively, up 32.94% and 35.88% year-on-year. At the same time, the company continues to increase personnel recruitment and institutional coverage. As of 2023Q3, the company has 4,019 employees, including more than 3,800 business personnel. It has covered 850 clinical trial institutions, which can cover 1,300.
It has many core advantages to enable the advancement of clinical trials. 1) Diverse customer structure and rich experience in previous projects; 2) Perfect training, management and quality control systems to ensure high-quality project delivery; 3) Leading the information technology construction industry to ensure efficient progress of clinical research.
Investment advice: We expect the company's revenue from 2023 to 2025 to be 786/10.17/1,261 billion yuan, up 34.13%/29.31%/24.00% year on year; net profit to mother is 1.28/1.70/222 million yuan, up 76.25%/32.91%/30.65% year on year. We give 2024 predicted net profit to mother 26 times PE, corresponding target market value of 4.42 billion yuan and target price of 72.02 yuan/share. The first coverage gave a “buy rating”.
Risk warning: Risk of lifting the ban and reducing holdings, risk of new orders falling short of expectations, risk of increased competition in the SMO industry, risk of order cancellation, risk of rising labor costs or loss of talent.