东富龙(300171):收入端增长符合预期 短期毛利率下降致利润端承压

Dongfulong (300171): Revenue side growth is in line with expectations, short-term gross margin falls, putting pressure on profit side

國盛證券 ·  10/27/2022  · Researches

East Fulong released its third quarterly report for 2022. In the first three quarters, the operating income was 3.817 billion yuan, up 32.43% over the same period last year; the net profit was 604 million yuan, up 8.29% over the same period last year; and the net profit was 566 million yuan, up 10.92% from the same period last year. Quarter by quarter: 2022Q3 achieved operating income of 1.39 billion yuan, an increase of 29.60% over the same period last year; net profit of 202 million yuan, down 7.38%; and net profit of 195 million yuan, down 4.59% from the same period last year.

Viewpoint: under the disturbance of the epidemic, the revenue side grows tenaciously, and the delivery delay leads to a decline in the proportion of overseas income, an increase in the price of some imported parts, and an increase in personnel costs, which affects the gross profit margin, resulting in a slower growth rate at the profit end than at the revenue end.

The growth on the revenue side is in line with expectations, and the decline in gross profit margin puts pressure on the profit side. The domestic epidemic situation is distributed at many points, and the company actively overcomes various challenges to ensure production, operation and delivery, and the revenue side of 22Q3 has achieved 29.60% growth. The gross profit margin of 22Q3 is 37.77%, which is 8.54pct lower than that of 21Q3 and 6.38pct lower than that of 22Q2. We believe that the main reasons for the decline in gross profit margin are: 1) revenue side: the proportion of overseas revenue decreased as a result of the epidemic affecting shipments (the gross profit margin of overseas business is higher than that at home); 2) the cost side:

The prices of some imported spare parts have increased and personnel costs have increased. The decline in gross profit margin is a drag on profit-side growth as well as revenue-side growth.

Inventory and contract liabilities increased month-on-month, and the expense rate remained stable over the same period last year. The contract debt of 22Q3 was 4.252 billion yuan, an increase of 337 million yuan over the previous month, and the inventory of 22Q3 was 3.984 billion yuan, an increase of 206 million yuan over the previous month.

Contract liabilities are the leading indicators of the performance of order-oriented enterprises, and the continuous increase of contract liabilities lays a good foundation for the release of future performance. 22Q3 sales expense rate is 4.50% (21Q3 is 4.29%), 22Q3 management expense rate is 10.45% (21Q3 is 10.53%), 22Q3 R & D expense rate is 5.83% (21Q3 is 6.28%).

The company continues to enrich the product line, superior product reputation and customer resources continue to accumulate. On September 26, Dong Fulong signed a strategic cooperation agreement with Tianjin Jeko to cooperate in the fields of upstream and downstream processes of biopharmaceutical, GMP production equipment, core consumables, plant construction and digitization. In addition, East Fulong delivered the CMF Ⅱ-3000L stainless steel bioreactor production line to Hualan Bio-Shengming Bioreactor, which was praised and recognized by customers. The company has made a forward-looking layout in bioengineering, consumables, CGT and other aspects, and has developed into an one-stop platform service provider that can provide customers with DS raw solution preparation, DP preparation products to DE engineering; from equipment, DC consumables to the overall EPC solution.

Profit forecast and investment suggestions: the company's net profit from 2022 to 2024 is expected to be 958 million yuan, 1.252 billion yuan and 1.66 billion yuan, an increase of 15.8%, 30.7% and 32.6% respectively over the same period last year. Regardless of fixed increment and dilution, the current stock price corresponds to 18x, 14x and 11x respectively. If the amortization effect of equity incentive expenses is excluded, the net profit from 2022 to 2024 will be 1.013 billion yuan, 1.293 billion yuan and 1.7 billion yuan, up 22.4%, 27.7% and 31.4% respectively over the same period last year. Maintain a "buy" rating.

Risk tips: the impact of the epidemic on delivery at home and abroad is not as expected; the sales and promotion of new products is not as expected.

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