"Buy", with TP of HK$71.38. 1H2022 revenue of JOINN was RMB777 million, up 45.3% YoY. Shareholders' profit was RMB371 million, up 141.4% YoY; if excluding one-offs, net profit is estimated to be RMB345 million, up 166.8% YoY. As for 2Q2022, revenue was RMB506 million, up 51.7% YoY.
Shareholders' profit was RMB246 million, up 307.1% YoY; if excluding one-offs, net profit is estimated to be RMB213 million, up 326.1% YoY, indicating continued high growth. EPS is forecasted to be RMB1.54/ RMB1.89/ RMB2.40 in 2022-2024. TP is set at HK$71.38, which represents 33.1x 2023 PER, with investment rating of "Buy".
Abundant orders awarded and on hand. As at June 30, 2022, the Company had orders in hand worth over RMB4.1 billion. Orders awarded to the Company were worth more than RMB2.0 billion in 1H2022, among which, RMB1.8 billion were undertaken by China-based subsidiaries, up over 50% YoY, and RMB200 million were undertaken by Biomere, an overseas subsidiary, up 30% YoY.
JOINN’s China-based members achieved greater breakthroughs in receiving international orders, worth approx. RMB160 million, surging more than 100% YoY, reaching a historic high. We believe that abundant orders awarded and on hand will support sustainable growth.
Production capacity expansion has been advancing and the acquisition of a research model business safeguards the upstream supply chain and improves the capability of non-clinical safety assessment.
Catalysts: Rapid release of new production capacity; better-than-expected new business expansion results; rapid growth of orders on hand.
Risks: Tightened financing environment for innovative drugs; intensified industry competition.