The performance of CRO companies has increased significantly, and the industry boom will continue

[Pharmaceutical Network Market Analysis] In recent years, China's innovative drug industry has developed rapidly.
With the rapid development of China's emerging pharmaceutical market and more and more multinational pharmaceutical companies entering China's pharmaceutical market, the CRO industry is ushering in new opportunities.
Performance is also continuing to improve
.

It is understood that as of August 30 this year, 29 A-share CXO (pharmaceutical outsourcing services, including CDMO and CRO) companies have disclosed semi-annual reports, and 21 companies have increased their net profit year-on-year, accounting for more than 70%
.

From the perspective of net profit scale, WuXi PharmaTech ranks in the forefront
.

Data shows that in the first half of 2022, WuXi AppTec achieved revenue of 17.
756 billion yuan, a year-on-year increase of 68.
52%; net profit attributable to shareholders of listed companies was 4.
636 billion yuan, a year-on-year increase of 73.
29%; non-net profit deducted was 3.
850 billion yuan, a year-on-year increase.
81%
.

Followed by Asymchem, Proton shares, Tigermed, the net profit of the three CXO companies in the first half of the year was 1.
74 billion yuan, 1.
212 billion yuan and 1.
192 billion yuan respectively
.

 　　Judging from the year-on-year growth rate of net profit, the net profit growth rate of five CXO companies including Wisdom Medicine, Proton, Asymchem, Haite Bio, and Baicheng Medicine exceeded 100%
.

For example, Ruizhi Pharmaceutical disclosed its interim report performance, the company’s revenue in the first half of the year was 687 million yuan, and the net profit attributable to the parent soared to 957 million yuan, a year-on-year increase of 185 times
.

According to the announcement, the sharp rise in net profit attributable to the parent company due to the decline in revenue was due to the investment income generated by the company’s previous purchase of its subsidiary Quantum Hi-Tech’s prebiotic business.
The equity transfer and delivery was completed on June 9 this year
.

 　　In addition, Asymchem also achieved operating income of 5.
041 billion yuan in the first half of the year, a year-on-year increase of 186.
40%; net profit attributable to the parent was 1.
740 billion yuan, a year-on-year increase of 305.
31%
.

The revenue growth was mainly due to the steady growth of the small molecule CDMO business, superimposed on the rapid growth of the emerging business segment
.

 　　In addition, the 2022 semi-annual report released by Proton on August 20 shows that from January to June, the company achieved operating income of 3.
914 billion yuan, a year-on-year increase of 211.
67%; net profit attributable to the parent was 1.
212 billion yuan, a year-on-year increase of 465.
01%; The non-post net profit was 1.
211 billion yuan, an increase of 501.
87%; earnings per share were 2.
23 yuan
.

During the reporting period, the company's net operating cash flow was 510 million yuan, an increase of 263.
31%
.

It is understood that the strong growth of Proton shares in the first half of this year is mainly due to the strong growth of the CDMO business of the core business segment APIs.
Industry insiders believe that the increase in CDMO orders superimposed on the continuous high growth of endogenous business orders has made the performance of CRO companies certain.
high
.

In the long run, the growth of pharmaceutical R&D investment and the increase in R&D outsourcing rate will drive the expansion of the CRO industry, and the improvement of the domestic innovative drug R&D environment will benefit the development of upstream CRO companies
.

In addition, the domestic industrial chain has a global competitive advantage, benefiting from the growth of downstream demand at home and abroad, which will also keep the industry booming
.

 　　However, it should be noted that from the overall perspective of the revenue of CRO companies, whether it is revenue or the year-on-year growth rate of revenue, the top companies are almost several domestic leading companies, including WuXi PharmaTech and Pharmaron , Tigermed, Kyushu Pharmaceutical, Asymchem,
etc.

In this regard, the industry believes that this also means that with the development of the CRO industry, the market head effect will become more and more obvious, and the industry concentration will be further improved
.

 　　Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to anyone
.