Kailaiying (002821) Three Quarterly Report Tracking: Steady Performance and High-Speed Growth Optimistic for Future Development Prospects
1.Event: The company released the third quarter report of 2019.
The first three quarters of 2019 achieved revenue of 17.
4.2 billion, an increase of 44 per year.
61%; Net profit attributable to shareholders of listed companies3.
670,000 yuan, an increase of 40 in ten years.
48%; net profit of non-attributed mothers3.
38 ppm, an increase of 38 in ten years.
97%; EPS1 achieved.
Among them, in the third quarter of 2019, the company achieved revenue6.
49 ppm, an increase of 45 in ten years.
18%; net profit attributable to mother 1.
370,000 yuan, an increase of 31 in ten years.
63%; deduct non-attributed net profit1.
35 ppm, an increase of 33 in ten years.
67%; EPS0 achieved.
In terms of other financial indicators, selling expenses were zero.
60 ppm, an increase of 38 in ten years.
47%, mainly due to the company’s continued deep cultivation of the overseas CDMO market and the accelerated deployment of domestic market business, which continued to increase market investment; management costs1.
910,000 yuan, an increase of 26 in ten years.
41%, mainly due to the company’s further expansion of new business and accelerated introduction of senior talents; financial expenses-0.
120,000 yuan, a reduction of 739 per year.
59%; R & D expenses1.
350,000 yuan, an annual increase of 32.
77%, mainly due to the company’s further strengthening of the research and development team, continuous exploration of technological innovation and commercial application of pharmaceutical technology.
Net operating cash flow 3.
51 ppm, an increase of 28 in ten years.
Account received in advance 0.
430,000 yuan, an increase of 193 in ten years.
08%, mainly due to the increase in customer funds received in advance in the current period.
The company released its 2019 performance forecast, which is expected to achieve net profit attributable to shareholders of listed companies5.
00 million US dollars, an annual increase of 25% to 40%; it is expected to achieve net profit deduction for non-attribution4.
7.9 billion -5.
1.6 billion, an increase of 30% -40% in ten years.
2.Our Analysis and Judgment (I) Performance maintained a rapid and stable growth, and the period of cost control was good. Performance maintained a rapid and stable growth. Due to the relatively high cost of raw materials in some commercial projects and the increase in accrued income, the growth rate of profit was lower than revenueend.In the first three quarters of 19, the company achieved revenue of 17.
4.2 billion (+44.
61%), net profit attributable to mother 3.
6.7 billion (+40.
48%), net of non-attributed net profit3.
3.8 billion (+38.
Among them, Q3 achieved revenue in a single quarter6.
4.9 billion (+45.
18%), net profit attributable to mother 1.
3.7 billion (+31.
63%), deducting non-attributed net profit1.
3.5 billion (+33.
The income end maintains a stable and robust high-speed growth. We believe that it is mainly through supplementing core technology advantages, improving the quality of small molecule CDMO business, expanding the pipeline of projects at home and abroad, and partially replacing new drugs and heavy-weight projects into the growth period; the substitution continues to increase.The one-stop platform service capability for research and development of innovative drugs, accelerates the expansion and deployment of new businesses, and extends the service industry chain.
The growth rate of the profit side is slightly lower than that of the income side. We believe that the reason is mainly due to the relatively high cost of raw materials in some commercialization projects, which has led to a decline in gross profit margin. As a result, the accrual of earnings has relatively improved the growth.
During the period, expenses were well controlled and gross profit margin decreased slightly.
In terms of expenses, the expense ratio was 21 during the first three quarters.
43%, a decline of 2 per year.
97pp, of which the sales expense ratio is 3.
15pp), the management expense ratio is 10.
58pp), financial expense ratio -0.
55pp), R & D expense ratio 7.
In terms of segmentation, the selling expenses are zero.
6 billion (+38.
47%), administrative expenses 1.
9.1 billion (+26.
41%), financial expenses -0.
230,000 yuan (-739.
59%), R & D expenses1.
3.5 billion (+32.
In terms of gross profit margin, the gross profit margin for the first three quarters was 44.
59%, a decrease of 1 from the same period last year.
66pp, of which Q3 gross margin is 45.20%, reducing by 1 every year.
46pp, mainly due to the relatively high cost of raw materials for some of the company’s commercialization projects, resulting in faster operating costs.
In addition, the advance payment is 0.
430,000 yuan, an increase of 193 in ten years.
08%; net operating cash flow 3.
51 ppm, an increase of 28 in ten years.
54%, the company’s project funds returned well.
(2) The order acquisition capability has been steadily improved, which has helped long-term and stable growth in performance. The company’s order acquisition capability has been steadily improved, and the reserve structure of various types of projects has been continuously optimized, which is conducive to long-term stable growth in performance.
The company has the advantages of technological innovation and quality management system, and the number of technology development projects undertaken has increased. At the same time, it has accumulated a large number of clinical stage projects through technology accumulation and professional team building; and it has cut-in cooperation with customers to ensure that subsequent projects continue to the commercial stagequantity.
We expect the company’s order structure to be similar to that of the interim report. The company’s main business project structure is continuously optimized, especially the phase III clinical projects are continuously increasing, which will help the company’s performance to grow steadily for a long time.
(3) Continue to steadily lay out an innovative drug integration service ecosystem and enhance the “CMC + clinical research service” one-stop comprehensive service capability. The company relies on the competitive advantages formed by small molecule CDMO, and continues to promote clinical research services, large chemical molecules, DoEBusiness, continue to steadily lay out an integrated service ecosystem for innovative drugs, and enhance the “CMC + clinical research services” one-stop comprehensive service capability.
While reporting the 杭州夜网 company’s mature mature small molecule business, it will further expand the chemical macromolecule business such as micro, double-strand and oligonucleotides, and lay out the biological macromolecule business, and customers in the domestic market will gradually strive to become an innovative drug from IND to NDA.Preferred supplier of one-stop service.
We have sorted out the company’s major layout around the creation of an innovative drug integrated service ecosystem from 18 years to the present.
In the progress of the integrated pharmaceutical integrated service ecosystem, the small molecule API business has been sound, the preparation business, the China-US double newspaper, and the clinical CRO business have been successfully carried out. The business in the separation, nucleic acid, polymer, and macromolecular biopharmaceutical industry is progressing smoothly.In operation or under active construction.
We believe that these layouts are conducive to the company to build an “integrated ecosystem of drug research and development and production services” and establish a full-service system; it is beneficial to the company to expand customers through multiple channels, increase customer stickiness, and ensure high sustainable growth of performance.
3．Investment recommendations The company’s performance in the first three quarters of 19 maintained a steady and high-speed growth, while the 19-year performance forecast for the growth range of 30% -40%, continued to maintain rapid growth.
We believe that it is mainly due to its competitive core technology advantages. The small molecule CDMO business has improved quality and added value. The pipeline of projects at home and abroad has continued to expand. Some alternative medicines and heavy-weight projects have entered a growth period. One-stop platform services for the continuous development of innovative medicines are gradually developed.Capacity, accelerate the expansion and layout of new businesses, and extend the service industry chain, we continue to be optimistic about the company’s future development prospects.
The company is a leading domestic CDMO company with strong technical innovation capabilities and excellent quality management capabilities.
At the same time, the company is accelerating the building of an integrated ecosystem of drug research and development, production and service, realizing the extension of the business to the entire industrial chain, and providing one-stop services for domestic and foreign customers.
Improvement, we are optimistic that the company’s overseas business maintains stable and rapid growth. Strategic cooperation with Covance and participation in investment funds will help the company develop potential customers, and through “early intervention, early binding”, it will continuously increase project reserves and increase customer retention.Sex.
At the same time, we are optimistic that domestic business will become a new growth point for performance.
China has entered a new era of pharmaceutical innovation. Under the policy of encouraging innovation, drug review reform, MAH, consistency evaluation and other policies, the company will accelerate the pace of market development and realize the logic of “water seller” entering a high-speed growth stage.
Overall, the company’s dual-engine strategic layout continues to advance. We are optimistic about the company’s future performance and maintain rapid growth. It is estimated that the net profit attributable to the parent in 2019-2021 will be 5.
70 trillion, corresponding to EPS 2.
20 yuan, corresponding to 50/38/29 times the PE.
Maintain the “Recommended” level.
4．Risks prompt increased competition in the industry; risk of loss of core technical personnel; less-than-expected capacity expansion