Gross margin of "digital reading IPO" is as high as 50% CDMO concept "Little Giant" landed on the ChiNext board today

Financial Associated Press, January 20, Chengda Pharmaceutical landed on the GEM today.

Chengda Pharmaceutical is a company that provides KEY pharmaceutical intermediate CDMO services for multinational pharmaceutical companies and pharmaceutical research and development institutions, and is also engaged in the research and development, production and sales of L-Carnitine series products.

According to the prospectus, the domestic market share of Chengda Pharmaceutical's CDMO business is 0.76%, and the CDMO market share of the four listed companies in the same industry, such as WuXi AppTec, GloriaIn, Boteng Andi and Jiuzhou Pharmaceutical, is 21.30%, 12.70%, 8.2% and 5.22% respectively.

Public information shows that from 2018 to 2020, the compound growth rate of the company's revenue was 35.50%, higher than the comparable average, and the compound growth rate of net profit attributable to the mother was 324.95%, significantly higher than the average of comparable companies.

In addition, before 2018, the overall gross profit margin of Chengda Pharmaceutical has been maintained at about 30%, the gross profit margin in 2019 was 45.05%, and it has reached 50.12% in 2020.

Shenwan Hongyuan suggested that the mainland is the largest emerging pharmaceutical market in the global pharmaceutical market, and it is expected that the domestic pharmaceutical market will reach 165-169 billion US dollars by 2024. In the context of the specialized division of labor in the pharmaceutical industry, the CDMO industry market is expanding rapidly, and it is expected that by 2023, the global pharmaceutical CDMO industry market size will reach 51.8 billion US dollars, and the domestic market size will reach 8.5 billion US dollars. The concentration of CDMO industry is low, the current market is mainly concentrated in Europe, the United States and Japan and other countries, the market share of emerging countries represented by the mainland has grown rapidly, and the industry status has gradually improved.

The L-Carnitine market is expanding and is expected to reach $263 million by 2027. Due to the high barriers to entry in the L-carnitine industry, the industry has formed a relatively stable competitive pattern.