Event:The company released its results for the first half of 2021. During the period, it achieved operating income of 4.41 billion yuan, a year-on-year increase of 126.7%; The net profit attributable to the parent was 1.84 billion yuan, a year-on-year increase of 150.3%; The adjusted net profit attributable to the parent was 1.77 billion yuan, a year-on-year increase of 163%.
The main views of Zhongtai Securities are as follows:
The performance exceeded expectations, and the net profit attributable to the parent was higher than the performance forecast.
In the previous performance forecast, the net profit attributable to the parent company in 2021H1 increased by 135% year-on-year, and the actual growth was 150.3%, which was higher than expected. The bank believes that it mainly stems from:
1) Late-clinical and commercialization projects are rapidly increasing in volume, of which clinical stage revenue is 1.94 billion yuan (+109.2% year-on-year) and commercialization stage revenue is 889 million yuan (+2923.5%);
2) The rapid recovery of demand after the normalization of overseas epidemics, North American revenue in 2021H1 was 2.19 billion yuan (149.3% year-on-year), and European revenue was 990 million yuan (706.8% year-on-year);
3) Management capabilities continue to be optimized and operational efficiency continues to improve. In 2021H1, the gross profit margin is approximately 52.1% (11.6 pp), the net profit margin is approximately 41.8% (3.9 pp), and the period expense ratio is approximately 12.4% (-8.2 pp);
4) Low base last year: In the first half of last year, the overall base was low due to the disturbance of the epidemic. In 2020H1, 740 million (63.6%) was attributable to the parent. However, compared with the net profit attributable to the parent in 2019H1, the company's CAGR from 2019H1 to 2021H1 was about 102.3%, growing rapidly.
The logic of CMO heavy volume continues to be fulfilled, and the strategy of following and winning molecules is progressing smoothly, which is expected to drive the overall performance to accelerate growth.
The company adheres to the strategy of following and winning molecules. As of June 30, 27 projects (14 preclinical to clinical, 2 phase III to commercial) have been extended in the first half of the year, and 20 clinical projects have been introduced externally (+400%, including clinical II There are 9 phases and 4 clinical phase III), 79 new projects, and the overall number of projects has reached 408 (+42.7% year-on-year compared with 2020H1), including 212 preclinical projects (+50.4%).
In addition, due to the rapid growth of the number of projects, the company's orders on hand continue to increase rapidly. It is estimated that the total amount of orders completed in the next three years will reach US $2.25 billion (+143.1%), and the total amount of unfinished orders will be approximately US $12.46 billion (+31.7%). Among them, unfinished service orders are US $7.23 billion (+25.2%). The bank expects that 7 commercialization projects will be implemented in 2021, which is expected to promote a new round of heavy volume in the CDMO sector and drive the overall performance to accelerate growth.
Advanced XDC, vaccine, and dual-antibody platforms bring new growth momentum.
XDC:The company's XDC drug research and development platform has undertaken 48 ADC projects (+60%) with the advantages of WuXiDAR4 technology, and 15 CDMO projects are underway, and the commercialization volume can be expected;
WuxiVaccine:Nine vaccine orders are being executed (a year-on-year increase of 8), and orders on hand have increased to US $3.3 billion. WuXi Hyde is expected to be put into operation in 2022, which is expected to continue to bring performance growth.
Double antibody:WuxiBody ™ Undertook 31 projects (+19.2%), and it is expected that 1 to 2 new IND applications will be added in 2021, which is expected to extend CDMO to gradually contribute new increments.
Profit forecast and investment advice:The bank predicts that the company's revenue from 2021 to 2023 will be 9.36, 13.84 and 19.4 billion yuan, a year-on-year increase of 66.7%, 47.9%, and 40.2%, and the net profit attributable to the parent company will be 2.82, 4.17 and 5.88 billion yuan, a year-on-year increase of 67.1%, 47.6%, and 41.2%, corresponding to EPS of 0.67, 0.98, and 1.39 yuan.
Risk warning events:The public information used in the research report may have the risk of lagging information or untimely updates, and the proposed acquisitionPfizerThe risk that the progress of China's biopharmaceutical production base projects is less than expected, the investment in biopharmaceutical R&D is less than expected, and the risk of loss of core technical personnel.