Event: On April 10, 2022, the company released the first quarter of 2022performanceForecast, the company is expected to achieve in 2022Operating income8.474 billion yuan, a year-on-year increase of 71.18%;net profit1.643 billion yuan, a year-on-year increase of 9.54%; net profit after deducting non-return to the parent company of 1.714 billion yuan, a year-on-year increase of 106.52%; adjusted Non-IFRS net profit attributable to the parent company of 2.053 billion yuan, an increase of 85.82% year-on-year.
Income and Non-IFRS return to the parent exceeded expectations, and accelerated growth throughout the year is expected. The company expects revenue of 8.474 billion yuan in the first quarter of 2022 (+71.18% year-on-year, +32.81% month-on-month), which exceeds 65-68% of the 2022Q1 guidance disclosed in the key operating data in January and February. Revenue in exchange rate growth is expected to grow faster, at 78.47%.Expected to deduct non-net in 2022Q1interest rate20.23% (+3.46pp year-on-year), Non-IFRS attributable to the parentinterest rate24.22% (+1.91pp year-on-year), we expect the accelerated growth of revenue, deductions and non-IFRS ownership to be mainly due to: ① the CRDMO strategy is implemented smoothly, the order demand is strong, and the main business continues to be strong; ② small molecule CDMO “follows and wins the molecule” The business model has ushered in the harvest period, and new production capacity and commercial orders have continued to be released. At the same time, the net interest rate attributable to the parent company in 2022Q1 was about 19.39% (-10.91pp compared to the same period last year). We expect the slowdown in the growth rate attributable to the parent company and the fluctuation of the net interest rate are mainly due to: it is expected that the change in fair value and the sharp drop in investment income in the current period will result in a net loss of about RMB 179 million (-83.16%).
The five major sectors continue to exert their strength, and long-term growth is expected. 1) WuXi Chemistry: The “end-to-end, integrated” CRDMO business model continues to be fulfilled: ① Small molecule drug discovery service (R): As a front-end funnel, it continues to drain projects, laying the foundation for the continuous growth of the back-end. ②CDMO (Process R&D and Production): “Follow and win molecules” is progressing smoothly. In 2021, there will be 42 commercialization projects (+50.0% year-on-year), and the superimposed new production capacity will continue to be released, which is expected to usher in a new round of high-speed growth; 2) Testing business (WuXi Testing): ①Laboratory analysis and testing services: comprehensive medical and equipment testing, continuous high growth can be expected after the production capacity is gradually put into production; ②Clinical CRO and SMO: SMO has significant scale advantages, and mutual drainage with CDS is expected to bring new Increment. 3) Biology business (WuXi Biology): The model reserve is abundant. With the continuous expansion of laboratory production capacity, we expect that the revenue scale is expected to continue the rapid growth momentum in recent years. 4) Cell and gene therapy CTDMO (WuXi ATU): First-mover advantage enjoys industry dividends, domestic growth is rapid, and it is expected to return to a rapid growth track after the overseas epidemic recovers. 5) Domestic New Drug Research and Development Service Department (WuXi DDSU): The first sales sharing project to apply for NDA is expected to gradually enjoy the success of new drugs.
profit predictionInvestment advice: We estimate that the company’s revenue in 2022-2024 will be 368.17, 44.073 and 54.283 billion yuan, a year-on-year increase of 60.75%, 19.71%, and 23.17%, and the net profit attributable to the parent is 84.85, 98.91 and 12.892 billion yuan, a year-on-year increase of 66.46% and 16.57% , 30.34%. The company’s track is booming, and the “integrated, end-to-end” strategy is expected to consolidate competition barriers and drive the company’s long-term rapid growth.
Risk warning events:research reportThe public information used may have the risk of information lag or untimely update; loss of core technical personnel; industry R&D investment not meeting expectations; overseas business integration not meeting expectations; industry competition intensifying risk; exchange rate fluctuation risk.
(Article Source:Zhongtai SecuritiesResearch)