Kailaiying (002821): CDMO Leading Enterprise Technology Global Leading Order-Driven Company Performance Continues High Growth
We are optimistic that China has achieved global competitiveness in the CDMO industry, and leading companies can continue to maintain high growth.
Compared with the traditional CMO enterprise rating, CDMO is different in that D is reflected in process development and optimization, focusing on the use of technology in services.
China has the world ‘s largest talent pool in medicinal chemistry and organic chemistry, which has been reduced compared with Europe and the United States, and has obvious cost advantages. It is a substitute for India and other areas. China attaches great importance to patent protection, has a more advanced technology, and has a reputation in the enterprise.Even better, it can be said that CDMO is an industry that integrates international competitive advantages in China.
Benefiting from the global division of labor, the growth of the pharmaceutical industry, the catalysis of domestic policies (especially the MAH policy), and the strengthening of corporate capabilities, according to forecasts from institutions such as the Southern Institute, the average annual compound growth of the CMO / CDMO market in 2017-2021 is 18.
32%, the market size will reach 626 trillion by 2021.
In terms of the competitive landscape, leading technological capabilities, companies with integrated industrial chains will be more favored by customers, and leading companies can continue to grow rapidly.
We are optimistic about Glory’s long-term competitiveness as an innovative drug CDMO leader, and we expect high growth to continue.
The company’s competitive advantages are reflected in four aspects: leading technology, in-depth customer service, abundant production capacity, and alternative talent reserves.
In terms of technology, we believe that technology is the company’s core competitive advantage, benefiting from the company’s long-term high R & D investment (the long-term company has the highest proportion of revenue), and the company’s new drug services are leading the world in many fields, especially the company’s continuous development in 2011-2017Continuous reaction and other technologies can significantly improve the company’s efficiency and reduce costs, and it has opened a gap with most of the CDMO companies that have obtained cGMP internally.
On the customer side, continuous technological progress has also won the company’s reputation and orders from well-known pharmaceutical companies at home and abroad. The company serves well-known global pharmaceutical companies and has become a long-term strategic partner of multinational pharmaceutical companies. The global preferred supplier for five multinational pharmaceutical companies.For one, customers have repeatedly handed over innovative drugs and blockbuster drugs with a patent period to the company for cooperation.
In terms of production capacity, the company’s reactor design capacity is domestically leading and the production capacity is maximized, which can continue to meet the rapid growth of orders.
In terms of talent reserves, before the company goes public and after it goes public, a total of three employee stocks or incentives are required, and global cutting-edge technology and management talents are introduced. Per capita investment and cost increase are significant advantages in the company.
We expect the company’s revenue growth to accelerate and begin to raise files in 2019.
The main reasons are as follows: (1) The continuous volume of heavy blockbuster drugs and the addition of added drugs to the market have brought rapid growth in commercial orders, and the rapid volume and sustainability of such orders are better, thereby reducing the company’s high growth in the next few years.
The company’s investment in supplementary production capacity in Jilin and the company’s lower gross profit margin in the second half of 2018 (we judged that it was mainly caused by the company’s increase in costs for future orders for future orders) confirmed our judgment.
(2) Benefiting from the increase and 南宁桑拿 advancement of clinical projects, it is expected that the revenue of clinical stage will increase by 25% -30%, which is an increase from 2018.
With the advancement of the MAH system, the company’s domestic business revenue share will continue to increase.
CDE arrested about 420 accounts in 2018, and Gloria took over 66.
(3) The company added macromolecular CDMO and CRO business in 2018, and it is expected that revenue will grow rapidly from 2019.
Investment suggestion: It is expected that the company’s revenue for 2018-2020 will be 18 respectively.
36 billion, 25.
07 trillion, the growth rate is 29%, 37%, 31%, the company’s net profit is expected to be 4 in 2018-2020.
920,000 yuan, the growth rate is 25%, 37%, 35%, corresponding to the company’s EPS from 2018 to 2020 were 1.
44 yuan, the current expected corresponding estimates are 48X, 35X, 26X respectively, given a buy-A investment rating, 6-month target price of 115.
2 yuan, equivalent to 45 times dynamic price-earnings ratio in 2019.
Risk warning: orders fall below expectations; new business development falls short of expectations; exchange loss gains and losses risk.