An end-to-end CRDMO service leader for bioconjugated drugs, abundant orders guarantee high performance growth, PharmacomineLink focuses on providing end-to-end CRDMO services for bioconjugated drugs to customers around the world. Its main business includes discovery, process development, and GMP production of bioconjugated drugs, monoclonal antibody intermediates, and related connectors and payloads. The company has served a total of 304 customers worldwide, including most players in the global ADC and bioconjugate drug markets. In the short term, the number of customers served by the company increased rapidly. The amount of outstanding orders reached US$411 million at the end of June 2023, providing a guarantee for high future performance growth. In the medium to long term, the number of research pipelines in the company continues to increase, and the number of high-value-added back-end projects continues to grow, which is expected to open up room for improvement in performance. We are optimistic about the long-term development of the company. We expect net profit to be 2,96/564/934 million yuan in 2023-2025, EPS 0.3/0.5/0.8 yuan, respectively. The current stock price corresponding to PE is 85.1/44.6/26.9 times, respectively. As a leading global antibody-conjugation drug CRDMO company, the company has a certain scarcity and strong growth in terms of performance and rapid volume growth. It was covered for the first time, giving it a “buy” rating.
The ADC outsourcing service market is rapidly rising, and the global market share of Pharmaceutical and Ming Union has been steadily increasing. Since 2022, ADC pipeline transactions have been hot worldwide. Many domestic ADC drugs have been “licensed out”, and overseas MNC's recognition of domestic ADC products has gradually increased. The expansion of the downstream market and the increase in outsourcing rates have contributed to the rapid rise of the ADC outsourcing service market. With integrated ADC research, development and manufacturing service capabilities, Yao Ming Union has led the domestic market, and its global market share rapidly increased from 1.8% in 2018 to 9.8% in 2022.
Technology empowers ADC R&D and production, and actively promotes the overall number of ADC projects for domestic and foreign production capacity construction companies to increase year by year. As of the end of June 2023, there were 67/27/11/5 pre-clinical/phase II/phase III projects. A funnel-shaped project structure has been formed, and front-end and back-end project diversion helps to continuously obtain back-end projects with higher added value. At the same time, with technological innovation as the core, the company has built a professional and comprehensive ADC R&D technology platform, and has set up three bases in Wuxi, Changzhou and Shanghai, each focusing on different aspects of the bioconjugated drug discovery, development and production value chain, forming a regionally concentrated product development and supply chain system; production capacity in Wuxi and Singapore will also be put into operation one after another to provide capacity support for the rapid expansion of the company's business scale.
Risk warning: The growth rate of the number of projects is slowing down, geopolitical risks, loss of core R&D personnel, etc.