A leading technology company in the CDMO industry, deeply involved in the global innovative pharmaceutical industry. The company is a technology-driven innovative drug service provider with more than 20 years of experience in the field of small molecules. The company has increased service stickiness and service depth, and commercialization projects have continued to grow steadily. According to on-hand order estimates, the company will have 28 verification and approval phase (PPQ) projects in 2024, an increase of 40% over 2023, with sufficient reserves; the technical layout is potentially major projects. The clinical phase III projects served by the company involve many popular targets or drug targets, such as GLP-1, KRAS, JAK, TYK2, EGFR/HER3, BTK, CDK4/6, etc. Emerging businesses continue to expand. Among them, the continuous reaction technology export business generated more than 100 million yuan in 2023. Relying on its own technical advantages and response experience, the company undertook 19 new external technology export projects, amounting to more than 250 million yuan, including 6 commercialization projects.
Accelerate the layout of overseas production capacity and improve the global supply chain. In May 2024, the company announced that it had acquired the API Pilot Plant and R&D Laboratory of the former Pfizer Sandwich Site in the UK and completed the layout of the company's first European R&D and production base. The Pfizer Sandwich Site was founded in 1954. The management team and core team have an average R&D and production experience of more than 15 years, and will collaborate with existing products and continuously expand overseas production capacity from R&D laboratories, pilot production to commercialization. From June '24, it will be fully managed and operated by Gloria Ying, which will undertake the relevant professional technical and management talent team, and can immediately begin undertaking the CDMO project. The acquisition of the European R&D production base and the Boston R&D center layout further improved Gloria Ying's global supply chain and enhanced order acceptance and global supply capabilities.
Potential commercial orders are expected to contribute to increased performance, and repurchases demonstrate the company's confidence in development. The company's small-molecule business continues to improve, and key reserve projects have entered the production service stage one after another, laying a good foundation for subsequent commercial project supply and large-scale effects. Emerging businesses are affected by the recovery of the domestic industry. However, the company's active repurchases have shown confidence in long-term development. As of June 3, the company has completed a repurchase of about 887 million yuan (3.1% of A share capital). The repurchase of shares will be used to subsequently implement employee stock ownership plans or share incentives and cancellations to reduce registered capital. On June 21, it was announced that the implementation of the 2021 equity incentive plan will be terminated. The company will take into account the actual situation to motivate the company's management and employees through other assessment systems, and will implement a long-term effective incentive mechanism in the future.
Profit forecast and rating: The company's revenue for 2024-2026 is expected to be 61.82/73.50 billion yuan, respectively; net profit to mother is 11.27/15.66/ 1.933 billion yuan, up -50.3%/38.9%/23.5% year-on-year. Considering the normalization of the company's performance in '24, the popularity of peptide drugs such as GLP1 has improved in the industry, which is expected to contribute a second growth curve to the company. First coverage, giving a “buy” rating.
Risk warning: the risk of changes in the international environment, the risk that the growth rate of the drug development market falls short of expectations, the risk that the industry competition pattern will deteriorate, and the risk that the production capacity investment schedule falls short of expectations.