Key points of investment:

The company signed a “Clinical Research Entrustment Contract” with Sichuan Yuanda Shuyang Pharmaceutical Co., Ltd. on December 27. The total amount of the contract was 55.5 million yuan (tax included), and the installment payment method was implemented. The “SYB507 for injection” drug that is the subject of this contract is class 3.3 biological products for therapeutic use.

The company's revenue increased nearly 30% in the first three quarters, mainly due to clinical business. The company's order volume increased significantly this year. The company added more than 500 million new orders in the first three quarters, and the amount of unconfirmed revenue from the contracts currently being executed exceeded 1.4 billion yuan. The time it takes for orders to turn into revenue depends on the progress of the project.

The company is the only A-share listed company that can provide integrated services for preclinical research, clinical research and registration of traditional Chinese medicine, and the company has been integrating traditional Chinese medicine related businesses since 2021. I believe the company's traditional Chinese medicine CRO business will develop better in the future.

The company's earnings per share in 2022 are expected to be 0.08 yuan, earnings per share in 2023 are 0.14 yuan, and earnings per share in 2024 are 0.18 yuan, corresponding to the closing price of 8.00 yuan on December 29. The dynamic price-earnings ratios are 100.00 times, 57.14 times, and 44.44 times, respectively, maintaining the company's “increase in holdings” investment rating.

Risk warning: The development progress of self-developed projects is lower than expected, and the order confirmation progress is lower than expected