研究报告全文：MN4Sep2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateJoinnLaboratories6127HKNewordersslightlyrecoveredin2Q23TargetPriceHK24511H23bottom-linemissJoinnreported1H23revenueofRMB1012mnup30PreviousTPHK3255YoYandattributablenetincomeofRMB91mndown76YoYIn1H23revenueUpDownside561accountedfor34ofourfull-yearestimatein-linewiththehistoricalaverageCurrentPriceHK1570whileattributablenetincomerepresented22ofourfull-yearestimatelowerthanthehistoricalaveragewhichwasprimarilyduetotheRMB199mnfairvaluesChinaHealthcarelossfrombiologicalassetsHowevertheCompanyslaboratoryservicescoreJillWUCFAbusinessrecordedanetprofitofRMB195mnin1H23up31YoYindicatinga85239000842healthybusinessmomentumamidthechallengingmacroenvironmentinbothjillwucmbicomhkdomesticandinternationalmarketsIn1H23Joinnsneworderssigneddeclinedby35YoYtoRMB13bnreflectingthetemporarilyweakpreclinicalRDBenchenHUANGCFAhuangbenchencmbicomhkdemandinChinaNeverthelessnewordersgrew31QoQin2Q23andreachedRMB750mnindicatingpotentiallymarginaldemandpickupinChinaAsofJuneStockData2023JoinnstotalbacklogsreachedRMB39bndownfromRMB44bnasofend-MktCapHKmn1177332022DespitethetemporaryweakdemandmanagementaimstoincreaseAvg3mthstoHKmn136Joinnsmarketshareintheharshcompetitionenvironment52wHighLowHK47201570TotalIssuedSharesmn7499GlobalizationtobeabusinessfocusforJoinnWhiletheRDdemandinSourceFactSetChinahasbeenmoderateJoinnsUSsubsidiaryBiomerecontinuouslyShareholdingStructuredeliveredsolidbusinessperformancewithnewordersupby16YoYinYuxiaFengZhiwenZhou3231H23indicatingcurrentlymoreresilientRDdemandintheUSJoinnhasHKinvestors180putmoreresourcesonmarketingitsoff-shoredrugsafetyservicesintheUSSourceHKExmarketAsitsChina-basedfacilitiespassedtheFDAGLPinspectionin2009SharePerformanceweexpectJoinnisabletoprovidehighqualityservicestoforeigncustomersAbsoluteRelativeaswellastoChinesedrugcompaniesseekinggoingoverseasManagement1-mth-201-130alsoindicatedthattheCompanywillconsiderMAopportunitiesintheUSor3-mth-458-463EuropeWebelievethatJoinnbytappingglobalmarketwillfurtherdiversify6-mth-556-503SourceFactSetitsrevenuesourcesandachievedsustainableearningsgrowthinlongterm12-mthPricePerformanceFairvaluechangesinbiologicalassetsarenon-operationalJoinnacquiredtwoChina-basedleadingsuppliersofhigh-qualitynon-humanprimatesNHPsin2022addingatotallivestockofmorethan20000DuetothepricedeteriorationofNHPsin1H23JoinnincurredRMB199mnfairvalueslossofbiologicalassetswhichweviewasnon-operationalWewouldliketohighlightthecontinuoushealthygrowthofJoinnslabservicenetincomedrivenbyasecuredsupplyofhigh-qualityNHPsSourceFactSetGrossprofitmarginGPMtobeunderpressureGPMin1H23droppedby46pptsYoYto440whichismainlyattributabletorelativelymoreNHP-relatedrevenuerecognizedduringtheperiodlowerpricingofclinicalCROservicesaswellasthelowutilizationrateofJoinnsUSfacilitieswhichcommencedoperationrecentlyManagementhasaconservativeviewonitsGPMtrendasJoinnwillmainlyfocusonmarketsharegainMaintainBUYWerevisedourTPtoHK2451fromHK3255basedona10-yearDCFvaluationwithWACCof107andterminalgrowthof30reflectingthelowerearningsprojectionWeforecastJoinnsrevenuetogrow224210276YoYandattributablenetincometogrow-616930358YoYin2023E24E25ErespectivelyEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn15172268277533594285YoYgrowth410495224210276NetprofitRMBmn55710744127961080YoYgrowth781927616930358EPSReportedRMB151201055106144ConsensusEPSRMBnana107136164PEx937025713398SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk4Sep2023Figure1EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue277533594285294537354665-577-1007-814GrossProfit118714171840134417212169-1168-1764-1518OperatingProfit654811108878310341358-1652-2153-1985Attributablenetprofit41279610804188991175-138-1147-804EPSRMB055106144052113147488-585-220GrossMargin427842204294456446074650-286ppt-388ppt-356pptOperatingMargin235524152539265927672910-303ppt-353ppt-371pptNetMargin148623702521142024072518066ppt-037ppt003pptSourceCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue277533594285292335374247-507-504091GrossProfit118714171840136616431967-1312-1372-646OperatingProfit654811108891111211341-2827-2766-1886Attributablenetprofit412796108079710111080-4825-2128004EPSRMB055106144107136164-4874-2185-1215GrossMargin427842204294467546444632-397ppt-424ppt-338pptOperatingMargin235524152539311731693158-762ppt-755ppt-619pptNetMargin148623702521272728582543-124ppt-489ppt-022pptSourceBloombergCMBIGMestimatesFigure3DCFvaluationforJoinnDCFValuationinRMBmn2023E2024E2025E2026E2027E2028E2029E2030E2031E2032EEBIT3833834876137679511169142717262071Taxrate161130130130130130130130130130EBIT1-taxrate3213334235346678271017124115021802DA155167200238281329381438500565-Changeinworkingcapital35115138164193226262302344388-Capx250250250250250250250250250250FCFF262135236358505680886112814081728Terminalvalue23043Terminalgrowthrate30WACC107CostofEquity135CostofDebt50EquityBeta10RiskFreeRate30MarketRiskPremium105TargetDebttoAssetratio300EffectiveCorporateTaxRate150PVofterminalvalueRMBmn8319TotalPVRMBmn11870NetdebtRMBmn4674MinorityinterestRMBmn4EquityvalueRMBmn16540ofsharesmn750PricepershareinRMB2206PricepershareinHK2451SourceCMBIGMestimatesHKRMB09PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE24Sep2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue107615172268277533594285Costofgoodssold5257811187158819412445Grossprofit5517361081118714171840Operatingexpenses275328396533606752Sellingexpense131618293039Adminexpense211264300406458564RDexpense51487897118150Operatingprofit2764086866548111088GainlossonfinancialassetsatFVTPL55125333299060ShareoflossesprofitsofassociatesJV003200NetInterestincomeexpense444333Otherincomeexpense3211322813910594Pre-taxprofit35964212404889131239Incometax478616779119161Aftertaxprofit31255610734107941078Minorityinterest111322Netprofit31355710744127961080Adjustednetprofit284415577611721960Grossdividends9513721482159216BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets118358145928593364417279Cashequivalents30941542917328335203879Accountreceivables91116212228276352Inventories91106350305373470FinancialassetsatFVTPL3068411480118111811241Othercurrentassets38659797093510911337Non-currentassets99027234436473050145287PPE6468151235134114371522Intangibles635750382614Goodwill125122134134134134FinancialassetsatFVTPL84180946946946946Othernon-currentassets7215492071227124712671Totalassets2173853710364106631145512566Currentliabilities77412141844181619732222Short-termborrowings354444Accountpayables6054127121148186Othercurrentliabilities69611341689166717972008Leaseliabilities152224242424Non-currentliabilities177178329329329329Long-termborrowings2153333Obligationsunderfinanceleases536457575757Deferredincome676181818181Othernon-currentliabilities3548188188188188Totalliabilities95113932173214523022551Sharecapital227381536536536536Capitalsurplus99567557648797886159479Totalshareholdersequity1223713681848514915010015Minorityinterest187431Totalequityandliabilities2173853710364106631145512566PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE34Sep2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation35964212404889131239Depreciationamortization83101130155167177Taxpaid334212479119161Changeinworkingcapital529814235115170Others23115443302357Netcashfromoperations4386859459028491027InvestingCapitalexpenditure141220269250250250Acquisitionofsubsidiariesinvestments0261689200200200Others1101823177000Netcashfrominvesting25120692134450450450FinancingDividendpaid559513782159216Netborrowings4459000Proceedsfromshareissues3354212000Others323299333Netcashfromfinancing5052909986162219NetchangeincashCashatthebeginningoftheyear1773054150291732833520Exchangedifference96137000Cashattheendoftheyear30541502899328335203879GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue683410495224210276Grossprofit67533647098194298Operatingprofit58347968247241342Netprofit666781927616930358PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin512485477428422429Operatingmargin256269302236241254ReturnonequityROE3021331404990113GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx020805050505Currentratiox154832333333Receivableturnoverdays320249263300300300Inventoryturnoverdays488461702702702702Payableturnoverdays328266278278278278VALUATION2020A2021A2022A2023E2024E2025EYE31DecPEna937025713398PBna0709121211SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE44Sep2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportSourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE5