Gloriad (002821) 2019 Semi-annual Report Review: Clinical CMO Exceeds Expected Performance Steady and Rapid Growth

Gloriad (002821) 2019 Semi-annual Report Review: Clinical CMO Exceeds Expected Performance Steady and Rapid Growth

[Key points of investment]Steady and rapid growth, clinical CMO exceeded expectations.

In the first half of 2019, the company achieved operating income of 10.

93 ppm, an increase of 44 in ten years.

27%; net profit attributable to mother 2.

29 ppm, an increase of 46 in ten years.

37%.

In terms of segments, the CMO revenue in the clinical phase grew faster than expected, growing by 75% per year (the long-term growth of the number of clinical projects was 92%); the CMO revenue in the commercialization phase increased by 33%; and the technical service revenue increased by 32%.

The realities of the company’s rapid growth are: 1) Utilizing the competitive advantages established by the company’s small molecule CDMO, it continues to obtain clinical research and development project orders from innovative drug companies at home and abroad, and the scale of commercialization orders has further increased.

Overseas business revenue has grown by over 40% annually, domestic business revenue has grown by over 85%, and the proportion of domestic business revenue has increased to 5.

39%; 2) While consolidating the mature small molecule business, the company further expanded and expanded the chemical large molecule business such as polyester and oligonucleotide, and developed the clinical CRO business.

The company expects to realize net profit attributable to mothers in the third quarter.

52-3.

78 ppm, an increase of 35% -45% per year.

Continue to promote new technologies and build high barriers to the industry.

In the first half of 2019, the company invested 8904 in research and development.

0.94 million yuan, an increase of 26 in ten years.

19%.

The company’s self-developed green core technology has made further strides.

The report abstract, the company has four research papers published 杭州夜网 in authoritative academic journals such as “Synlett”, “Science”, “ChemCatChem”, “JACS”, these latest research results will promote the deep integration of academia and industry,Achieve rapid environmental protection in the pharmaceutical industry, reduce costs and improve drug quality.

Construction of outstanding talents and improvement of long-term incentive mechanism.

According to the number of reports, the company has introduced a total of 20 senior talents and absorbed talents to hold management positions or key technical positions in various fields, further improving the company’s drug development and management level.

A new employee equity incentive plan was launched in 2019, granting 69 additional shares.

11.25 million shares, with 12 incentive targets, including managers and core technical staff.

As of the 武汉夜网论坛 end of the reporting period, the company has accumulated 581 supplementary shares.

660,000 shares, accounting for 2 of the total share capital at the end of the reporting period.

51%, the cumulative number of incentive objects is 155 people.

Expenses were well controlled and gross profit margin decreased.

In 2019H1, the company’s selling expenses will be +34 for ten years.

7%, management costs +48 per year.

2%, the first is that the company accelerates the layout of the domestic market business and accelerates the introduction of talents.

From the perspective of the proportion of operating income, 2019H1 sales expenses3.

43% (3 in the same period last year.

68%), and administrative expenses11.

24% (18 in the same period last year.

17%), indicating that the company’s expenses are well controlled and operating efficiency is improved.

In recent years, the company’s gross sales margin has decreased, mainly due to the rapid increase in costs.

In 2019H1, the company’s gross sales margin was 44.

23% (compared to 46 in the same period last year).01%) with a net sales margin of 20.

98% (18 in the same period last year.

5%).

[Investment recommendation]The company continues to obtain orders for clinical research and development projects at home and abroad, and further increases commercialization orders. The clinical CMO project exceeds expectations, and it is expected to continue to maintain better growth in the second half of the year.

Based on the actual growth in the middle of 2019, revenue growth slightly exceeded our expectations, and the increase in net profit attributable to mothers was in line with our expectations.

We increased the growth rate of CMO performance in the clinical phase, increased the growth rate of technical service performance, and revised the management expense ratio.

We raised our operating income for 19/20/21 to 26 respectively.

11/33.

94/42.

9.6 billion yuan (previous report was 23).

62/30.

54/39.

6.2 billion), slightly lowered the net profit attributable to mothers to 6, respectively.

12/7.

75/9.

8.2 billion (previous report was 6.

23/8.

05/10.

3.7 billion), EPS is 2 respectively.

64/3.

35/4.

24 yuan, corresponding PE is 36/29/23 times.

Maintain the “overweight” rating.

[Risk Warning]Expiry or Delisting of Innovative Drug Patents; Risks of Clinical Phase Project Operation; Uncertainty of International Trade Friction