20230331-招银国际-泰格医药-300347.SZ-Targeting_the_broad_global_market_5页_1mb

Tigermed (300347 CH) Summary

Core Content and Key Financial Highlights

Tigermed reported its 2022 financial results with revenue of RMB7,085 million, reflecting a 35.9% YoY growth. However, attributable net income declined by 30.2% YoY to RMB2,007 million, while attributable recurring net income grew by 25.0% YoY to RMB1,540 million. The company's gross profit margin (GPM) decreased by 3.9 percentage points to 39.6%, primarily due to the inclusion of low-margin COVID-19 related revenue and the impact of the pandemic on operations in China.

New orders for 2022 reached RMB9.7 billion, with non-COVID-19 related orders increasing by 25% YoY, showing strong growth in the core business. The total backlog at the end of 2022 was RMB13.8 billion, up 22.9% YoY, indicating a solid foundation for future growth.

Global Expansion and Strategic Initiatives

Tigermed is actively accelerating globalization, leveraging the COVID-19 pandemic to expand its overseas market presence. In 2022, the company secured 4 EUAs for COVID-19 vaccines in China and abroad. In January 2023, it acquired Marti Farm, a Croatian CRO, to enhance its service capabilities in Europe. The company also plans to integrate its BD team in Europe to improve business development efficiency in 2023.

In the US, Tigermed has collaborations with over 100 clinical sites, and has secured 62 MRCT projects as of December 2022, up from 20 in 2020. The company is also proactively exploring business opportunities in Southeast Asia and Latin America, which are seen as potential end markets for Chinese drug developers.

To support its global expansion, Tigermed added 400 employees in overseas regions, representing 44% of the total new hires in 2022.

Technology Adoption and Operational Improvements

The company has established the Tigermed Digital Promotion Center and a Decentralized Clinical Trial (DCT) Solution Team. The DCT platform utilizes new technologies to streamline clinical trial procedures such as participant enrolment, engagement, site management, data aggregation, quality/cost balance, and study services. It is expected to reduce patient burden and improve clinical service efficiency, helping Tigermed keep pace with foreign peers in service digitalization and operational performance.

Investment and Valuation Outlook

The analyst maintains a BUY rating, revising the target price from RMB147.43 to RMB134.24, based on a 10-year DCF model with a WACC of 10.6% and a terminal growth rate of 3.0%. The revised growth projections for FY23E, FY24E, and FY25E are as follows:

• Revenue growth: 20% / 26% / 25%
• Attributable recurring net income growth: 29% / 27% / 26%
• Recurring EPS growth: 2.27 / 2.88 / 3.64

The adjusted P/E ratio is expected to decrease from 57.1 (FY22A) to 27.9 (FY25E), reflecting increased earnings and potential undervaluation. The current price is RMB101.50, with a target price that implies a 32.5% upside.

Shareholding and Market Performance

• Market Cap: RMB88,550.4 million

• Shareholding structure:

  • HK investors: 23.9%
  • Xiaoping Ye: 20.3%

• Share performance (12 months):

  • Absolute: +11.3%
  • Relative: +3.2%

• 1-month: -12.1%

• 3-month: -3.1%

• 6-month: +11.3%

Financial Summary

Profitability Metrics

Growth and Valuation Projections

Valuation Metrics

Analyst Rating and Disclaimer

• Analyst Rating: BUY
• Target Price: RMB134.24
• Current Price: RMB101.50
• Up/Downside: 32.5%

The report is based on analyst research and CMBIGM estimates, with no guarantee of accuracy or completeness. It is not investment advice and should not be relied upon for making investment decisions. Investors are advised to consult a financial advisor for personalized guidance.

CMBIG Ratings

• BUY: Potential return of over 15% over next 12 months
• HOLD: Potential return of +15% to -10% over next 12 months
• SELL: Potential loss of over 10% over next 12 months
• NOT RATED: Not rated by CMBIGM

Disclaimer

• The analyst's views reflect personal opinions and are not influenced by compensation.
• No trading or dealing in the stock covered in the report occurred within 30 days prior to the report's issue.
• The report is for internal use only and not for public distribution without written consent.
• Conflicts of interest may exist, and the report's objectivity may be affected accordingly.

Important Disclosures

• Information in the report is based on publicly available data and not guaranteed.
• The report is not an offer to buy or sell any securities.
• CMBIGM is not a registered broker-dealer in the U.S. and is not subject to FINRA rules.
• The report is intended for major U.S. institutional investors only.