Kailaiying (002821) Tracking of the First Quarterly Report: Performance and High-speed Growth Continue to Be Positive on Long-term Development Prospects

Kailaiying (002821) Tracking of the First Quarterly Report: Performance and High-speed Growth Continue to Be Positive on Long-term Development Prospects

1.

Event: The company released the 2019 first quarter report.

2019Q1 achieved revenue 4.

76 ppm, an increase of 31 in ten years.

03%; net profit attributable to shareholders of listed companies is 0.

92 ppm, an increase of 45 in ten years.

00%; net profit deducted from non-return to mother 0.

80 ppm, an increase of 51 in ten years.

87%; realized earnings per share of 0.

40 yuan.

Other financial indicators, R & D expenses 3697.

580,000 yuan, an increase of 18 in ten years.

72%; sales expenses 1641.

960,000 yuan, an increase of 31 in ten years.

85%, mainly due to the deep cultivation of overseas CDMO and the rapid expansion of domestic market business; management costs of 5660.

930,000 yuan, an increase of 54 in ten years.

65%, mainly due to the company’s deep cultivation of large-scale business, at the same time rapid development of new business layout, and accelerated talent transfer; financial costs of 1008.

850,000 yuan, a decrease of 77.

19%, mainly due to changes in the exchange rate of RMB against USD and USD; income expenses were 1082.

370,000 yuan, a decrease of 35 per year.

55% was mainly due to the addition of R & D expenses and the increase in deferred income tax.

At the same time, the company released the 2019H1 performance forecast, which is expected to achieve net profit attributable to mothers2.

12 -2.

430,000 yuan, an annual increase of 35-55%.

It is mainly aimed at the increase in order capacity obtained from domestic and overseas markets, the continuous expansion of project pipelines, the replacement of some new drugs and heavy-weight projects into the growth period, and the project reserve structure of the clinical and commercialization stages has been further optimized; the development and layout of new businesses have been gradually 杭州夜生活网 accelerated and continuedCultivate new performance growth points.

2.

Our analysis and judgment (1) Q1 performance resumed high-speed growth as scheduled, and the profit-side growth rate was faster than the income-side 19Q1 company ‘s performance was significantly faster than the same month last year. Due to the decrease in financial expenses, the addition of R & D expenses, and the integration of Kailaiying Life Science andThe impact of profit recovery, the growth rate of the profit side is higher than the income side.

In the first quarter of 19, the company achieved revenue4.

76 ppm, an increase of 31 in ten years.

03%; 9206 net profit attributable to mother.

380,000 yuan, an annual increase of 45.

00%; Realize net profit deduction of 8023.

900,000 yuan, an increase of 51 in ten years.

87%.

In 天津夜网 comparison, in 18Q4, the growth rate of net profit attributable to mothers and net profit attributable to non-mothers was 19 respectively.

51%, 19.

13% and -8.

68% and 18Q1 are 25 respectively.36%, 29.

34% and 13.

68%, the company’s performance growth rate increased from the previous quarter.

We believe that the main areas of the company’s high-speed growth are integrating core technology advantages, and the pipeline of projects at home and abroad has continued to expand, and some of the alternative drugs and heavy-weight projects have entered a growth period; the one-stop platform service capability of continuously promoting the development and production of innovative drugs has been continuously promotedTo accelerate the development and layout of new businesses.

At the same time, the report shows that the growth rate of the profit side of the merged company is higher than that of the income side. We believe that (1) exchange rate changes have led to a significant reduction in financial expenses.

1Q1 financial expenses 1008.

850,000 yuan, a reduction of more than 34 million yuan a year.

(2) The increase in research and development expenses and the increase in deferred increments led to a decrease in expenses.

19Q1 diabetes costs 1082.

370,000 yuan, a decrease of about 6 million yuan a year.

(3) Kailaiying Life Science is 100% consolidated and profitability is restored.

18Q4 Kailaiying Life Science 100% consolidation, part of the upgraded production capacity and new production capacity have started R & D and production in 19 years, driving the recovery of profitability.

In terms of period expenses, the management expense ratio is 11.

88%, increase by 1 every year.

81pp, we believe that it is mainly due to the company’s intensive cultivation and reorganization business, and at the same time accelerating the development of new business and accelerating the introduction of talents.

Selling expense ratio 3.

45%, basically the same as last year (+0.

02pp).

R & D expenses are 3697.

580,000 yuan, an increase of 18 in ten years.

72%.

(II) After 16 and 18 years, the company will launch stock incentives again, closely combining the newly introduced talents and the company’s interests. In March 19, the company launched the stock incentive plan again, with a proposed supplementary number of 132 shares.

40,000 shares.

A total of 22 incentive objects were awarded this time, including senior managers, managers and core technical personnel, with a grant price of 44.

80 yuan / share.

The conditions for lifting the limit for each period are based on the deduction of non-net profit in 2016, and the growth rate in 2019-2021 is not less than 75%, 100% and 125%.

After reaching the limit-resolving conditions, the individual limit-resolving coefficient is determined based on performance evaluation.

Our understanding of this equity incentive is as follows: (1) After 16 or 18 years, we will launch an incentive plan again to promote the binding of newly introduced talents and the interests of the company.

Taking senior management as an example, the chief financial officer and core technical managers in the incentive object joined the company in May and September 18, respectively. The incentive plan will bind the newly introduced talents and the company’s interests.

(2) The loosening of the assessment conditions has stimulated the enthusiasm of core talents and attracted more talents.

We believe that the solution to limit calculations is loose, and excessive performance assessment is a high probability event, and its practical purpose is to attract and retain outstanding talents, bind the core team’s personal interests with the company’s development, stimulate motivation, and improve operational efficiency.

At the same time, it also shows the company’s recognition of talents to the public and attracts more talents.

(3) Amortization expenses of equity incentives have little impact on performance.

Assuming the grant in May, the corresponding amortization costs for the shares granted in 2019-2022 are 1464.

26, 1150.

67 and 332.

29 and 61.

510,000 yuan, has a small impact on performance, and the release of performance brought about by fair incentives will greatly exceed the increase in booth costs.

(3) Continue to build a one-stop service platform for drug research and development and long-term high-growth and expectable business layout. While consolidating the CDMO business, the company enhanced the “CMC + CRO” one-stop comprehensive service capability to create a new drug research and development productionOne-stop service platform.

Since listing, the company has further expanded and expanded chemical macromolecule business such as tandem and oligonucleotide while consolidating its mature small molecule business, and has laid out the biomacromolecule business, striving to become a domestic market customer from the innovative drug IND to NDA.Preferred supplier of one-stop service.We sorted out the company’s major layout around the creation of an innovative drug integrated service ecosystem for 18 years, and the results are shown in the following figure.

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 suggestion that the company’s first-quarter performance resumed high-speed growth as scheduled, with a noticeable acceleration over the same period last month.

At the same time, the 18H1 performance forecast growth range is 35-55%, which continues to maintain rapid growth.

We believe that it is mainly due to the company’s core technology advantages to continuously expand the project pipeline, part of the replacement of new drugs and heavy varieties projects into the growth period, and continue to promote the innovative drug research and development and production of one-stop platform service capabilities, we are optimistic about its 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.

62/7.

33/9.

54 million, corresponding to EPS 2.

43/3.

18/4.

14 yuan, corresponding to 39/29/23 times the PE.

Maintain the “Recommended” level.

4.

Risk reminds the risk of customer churn, the loss of core technical staff, the risk of customer product price reduction or sales gradually expected, and performance risk.