Financial performance: the growth rate of the profit side is slower than that of the income side.
On August 28, 2022, the company reported that 2022H1 revenue was 146 million yuan, an increase of 31.2% over the same period last year, corresponding to Q2 revenue of 74 million yuan, an increase of 17.5% over the same period last year. 2022H1 net profit was 31 million yuan, an increase of 13.2% over the same period last year, and a decrease of 5.6% corresponding to Q2 net profit of 17 million yuan.
Growth analysis: the isolation products increased significantly compared with the same period last year, and the growth is expected to drive the continuous split business: the revenue of the 2022H1 microbiological detection technology series is about 47 million yuan, an increase of about 5.7% over the same period last year; the revenue of the environmental control product series (isolation technology series) is about 56 million yuan, an increase of about 238.4% over the same period last year. The revenue of sterilization technology series was about 17 million yuan, down 42.2% from the same period last year; the revenue of organic analysis technology series was about 12 million yuan, an increase of 46.3% over the same period last year. We believe that the 2022H1 revenue contribution mainly comes from the sales revenue of the environmental control product line (including isolators, cell workstations, honeycomb culture systems, etc.). 2022H1 contract debt is 87 million yuan, an increase of about 27% over the same period last year. Combined with the company's contract debt trend and normal delivery pace, we expect cell preparation / reassembly workstation revenue to maintain a high growth rate from 2022 to 2024.
Profitability analysis: the gross profit margin declined in the short term affected by the epidemic, and the structure is expected to improve in the second half of the year. According to the company's report, the net profit rate of 2022H1 is about 21.5%, down about 3.4 pct from the same period last year; and the net profit rate of single Q2 is about 23.4%, down about 5.2pct from the same period last year. 2022H1 gross profit margin is about 57.9%, down about 6.3pct from the same period last year.
From the expense point of view, the 2022H1 sales expense rate is 11.3%, which is about 0.5 pct lower than the same period last year; the R & D expense rate is 19.9%, which is up about 0.4 pct year-on-year; and the management expense rate is 10.0%, which is about 0.5pct lower than the same period last year. We believe that the decline in 2022H1 gross profit margin is mainly due to higher costs caused by commodity price increases and the impact of the epidemic, and the expense side remains stable over the same period last year. 2022H2 is expected to improve profitability with the stabilization of upstream raw material prices.
Strategic layout: plan to invest in the construction of new projects and strengthen the industrial chain layout of cell therapy. The company plans to invest 500 million in the construction of new biological materials and precision intelligence projects in Dongzhou New area of Fuyang, and to systematically develop high-tech and high value-added new materials such as high-end membrane separation technology products. After the completion of the project, it will produce 3000 sets of new biological materials and precision intelligent equipment each year, with an annual output value of not less than 500 million yuan after delivery. We expect that the project will help strengthen the layout of the company's cell therapy-related equipment and provide support for the company's long-term growth.
Profit forecast and valuation
Taking into account the COVID-19 epidemic and the upstream raw material price disturbance, we downgrade the company's profit forecast for 2022-2024. It is estimated that the company's net profit for 2022-2024 will be 1.1 billion yuan, an increase of 71%, 41% and 34%, respectively, corresponding to Pamp E 27max 19max 14X. With the gradual release of the production capacity of the company's membrane products and cell workstations, the future performance is expected to achieve two-wheel drive of membrane + cell workstations and maintain the "buy" rating.
Risk hint
The deterioration of membrane market competition leads to the risk of sharp price fluctuation; the risk of R & D progress is less than expected; and the risk of market development is not as expected.
