Zhaoyan New Drug (603127) Quarterly Review: Stable Growth in the Third Quarter
On October 31, the company released the 2019 third quarter report, and the company realized operating income3.
48 ppm, an increase of 42 in ten years.
95%; net profit attributable to shareholders of listed companies is 7648.
310,000 yuan, an increase of 33 in ten years.
66%; after excluding non-recurring gains and losses, the net profit attributable to shareholders of the listed company was 6036.
110,000 yuan, an annual increase of 38.
95%; net cash flow from operating activities was 9无锡桑拿网725.
640,000 yuan, 20 years ago.
Basic income is 0.
The company is a leading company in the field of preclinical systemic safety evaluation.
The main business is preclinical research services for drugs and breeding and sales of experimental animals, of which preclinical research services for drugs are the company’s core business.
The company is one of the national GLP laboratories for professional pre-clinical evaluation of military drugs. It has two GLP laboratories in Beijing and Suzhou. It has established a systematic preclinical evaluation technology platform for drugs and GLP quality management system. It has passed domestic and many countries.Including the GLP certification and inspection of international organizations, the company ranks among the leaders in the fine-molecule industry regardless of the area of the facility, the variety of evaluation, or the professionalism.
The company’s slower growth in the third quarter results in the confirmation cycle of orders, and long-term performance growth depends on capacity expansion.
At present, the company has plenty of orders on hand, about 1 billion. However, due to the fact that the business is not closed and settled (usually settled in the fourth quarter), the company’s third-quarter performance has grown relatively slowly, and the net cash flow generated from operating activities has also shown aTwice a year.
The development of the CRO industry is still in the golden period.
With the advancement of the “4 + 7” tape purchase policy, and the announcement of the State Drug Administration on adjusting the review procedures for clinical trials of pharmaceuticals (No. 50 of 2018), July 24, 2018, domestic innovative drugs welcomeHere comes the golden period.
In addition, due to the improvement of international CROs’ capabilities in domestic CROs, international registrations are more convenient and cost-reduced, and the international registration needs of domestic companies have increased; the growth of new drug research and development will push the domestic preclinical CRO market to continue to grow rapidly.The passage.
According to the Frost & Sullivan report forecast, the size of China’s CRO market will be approximately USD 11.1 billion in 2018, and the size of China’s CRO market will reach USD 23.3 billion in 2022, with an average compound strength of 20-2022.
The annual CRO industry is still in the golden development period.
The capacity expansion in the future will help the company efficiently complete orders in hand.
As of the end of 2018, the company has an 18,500-square-meter experimental base (5,700-square-meter experimental base in Beijing and 12,800-square-foot in Taicang, Jiangsu). In May 2019, Taicang, Jiangsu, added 13,000 square meters of production capacity, and the company’s total capacity expanded to 31,500 square meters.The production capacity has not been in operation for a long time and is expected to reach a utilization rate of 50%.
After the new animal house is fully replenished in 2020, the company’s production capacity will increase by about 60-70%. The expansion of production capacity will help the company to efficiently complete orders in hand and increase the ability to accept orders.
At the end of 2019, the company is expected to reset and confirm about 300 million new orders revenue.
The remaining part of the 1 billion orders in hand will be gradually confirmed in the next year.
In terms of domestic business, in the future, the company will promote the continued growth of its performance through the initial industrial chain extension.
The upstream of the company is experimental animals, including small rodents, mainly white mice and large primates, chimpanzees, etc. In order to enhance the ability to control the upstream experimental animals, the company’s monkey factory in Guangxi has started construction in April 2019 and is under construction.In China, some will be put into production next year, when the company’s animal experiment costs will be reduced.
On the downstream side, the company will expand into the Phase I clinical field. At present, the company has hired a clinical team headed by a professor at Hopkins University to conduct Phase I clinical business development.
It is expected that two clinical medical centers will be completed by the end of the year, and will begin to undertake business next year.
In addition, the company is also deploying pharmacovigilance business.
At the end of July 2018, the company registered a holding subsidiary, Beijing Zhaoyan Mingxun Pharmaceutical Technology Co., Ltd., and organized a professional team responsible for the construction of a pharmacovigilance business system with Chinese characteristics. Since this field is in the initial stage of development in China, the company is expected toIntroduce this business to consolidate the existing business brand and form a new performance growth point.
The acquisition of Biomere enhances the company’s international brand competitiveness.
Internationalization has always been an important development strategy of the company. The internationalization strategy of the company’s pre-clinical CRO business is divided into three stages: the first stage, internal declaration by domestic customers; the second stage, international declaration by domestic customers; the third stage, international declaration by international customers.
The company is currently in the process of developing from the second phase to the third phase. After the acquisition of Biomere, the company’s customer group structure has been continuously optimized, which is conducive to subsequent international business development.
It is expected that the acquisition will be completed in the April 2019 quarter. After the completion of the acquisition, the consolidation work will be completed and the performance will also increase.
Upgrade the company to “Buy” investment rating.It is expected that the company’s EPS in 2019 and 2020 will be 0 in 2021.
96 yuan, 1.
24 yuan and 1.
72 yuan, according to the closing price of 62 on October 31, 2019.
Calculated at 52 yuan / share, the corresponding PE is 65.
13 times, 50.
42 times and 36.
Taking into account that the company’s growth rate is determined in the next two years, and the order confirmation in the fourth quarter will exceed expectations, and overseas acquisitions will be completed, the company is upgraded to a “buy” investment rating.
Risk warning: there is some uncertainty in the progress of order confirmation and the acquisition of new orders