证券研究报告·海外公司点评·药品及生物科技(HS) 金斯瑞生物科技（01548.HK） 2023 年年报点评：业务多点开花，业绩快速 2024年 03月 14日 增长 证券分析师 朱国广 买入（维持） 执业证书：S0600520070004 zhugg@dwzq.com.cn [Table_EPS] 盈利预测与估值 2022A 2023A 2024E 2025E 2026E 股价走势 营业总收入（百万元） 628.52 841.55 1,168.83 1,711.65 2,581.05 同比 22.78% 33.89% 38.89% 46.44% 50.79% 金斯瑞生物科技 恒生指数 26% 归母净利润（百万元） -226.85 -95.48 -62.05 32.91 162.93 20% 14% 同比 34.79% 57.91% 35.01% 153.05% 395.01% 8% 2% -4% EPS-最新摊薄（元/股） -0.11 -0.04 -0.03 0.02 0.08 -10% -16% -22% P/E（现价&最新摊薄） - - - 1,114.69 225.19 -- 32 48 %% [关T ...

Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Insights - The life sciences business showed robust growth with revenues of approximately $413 million in 2023, a year-over-year increase of 14.5%, and an adjusted gross margin of 54.4% [2]. - The CDMO business experienced a slight decline in revenue, achieving $109 million in 2023, down 12% year-over-year, primarily due to capacity utilization and pricing pressures [2]. - Sales of the cell therapy product Cilta-cel surged to $500 million in 2023, reflecting a 273% increase year-over-year, indicating a strong growth trajectory [2]. - The company reported total revenues of $840 million for 2023, a 34.2% increase year-over-year, with an adjusted net loss of approximately $298 million, showing a reduction in losses compared to the previous year [2]. Financial Performance Summary - Revenue projections for 2024-2026 indicate significant growth, with expected revenues of $1.188 billion in 2024 and $3.099 billion in 2026, reflecting growth rates of 41.1% and 56.3% respectively [4]. - The adjusted net profit forecast for 2024 is -$106 million, improving to $114 million in 2025 and reaching $381 million in 2026 [4]. - The earnings per share (EPS) is projected to improve from -$0.05 in 2024 to $0.18 in 2026 [4].

Investment Rating - The report assigns a "Buy" rating for the company, Kingsray Biotech (1548 HK), with a target price of HKD 27.75, indicating a potential upside of 78.8% from the current closing price of HKD 15.52 [1][10]. Core Insights - The company demonstrated resilience in its performance during 2023, with revenues reaching USD 840 million, a year-on-year increase of 34.2%, aligning closely with previous expectations [1]. - Adjusted net loss for 2023 was USD 298 million, significantly better than the anticipated loss of USD 395 million, showcasing improved operational efficiency [1]. - The overall gross margin stood at 48.8%, exceeding the forecast of 46.5%, primarily driven by the rapid improvement in the gross margin of the cell therapy segment [1]. - The report anticipates a recovery in the company's CDMO business in 2024, supported by a gradual improvement in overseas financing and accelerated market expansion [1]. Revenue Performance and Guidance - Non-cell therapy business segments showed robust growth, with life sciences services generating external revenue of USD 405 million, up 16% year-on-year, slightly exceeding expectations [2]. - The report provides guidance for 2024, projecting a revenue growth of 15-20% for life sciences services, with gross margins stabilizing around 55% [2]. - The cell therapy segment is expected to achieve peak sales of at least USD 5 billion for cilta-cel, with production capacity anticipated to double by the end of 2025 [2]. Financial Projections - The report slightly adjusts revenue forecasts for 2024 and 2025 down by 0.6% and 0.5%, respectively, but reduces the net loss forecast for 2024 by 4% and increases the net profit forecast for 2025 from USD 940 million to USD 1.48 billion [2]. - The introduction of 2026 profit forecasts estimates revenue at USD 2.16 billion, with a compound annual growth rate (CAGR) of 37% from 2023 to 2026 [2]. Valuation and Target Price - The report employs a sum-of-the-parts (SOTP) valuation method, leading to a target price of HKD 27.75, maintaining the "Buy" rating [2][8]. - The valuation breakdown indicates that the cell therapy segment contributes significantly to the overall target valuation, accounting for 69% of the total [8].

Financial Performance - For the fiscal year ending December 31, 2023, the group's revenue was approximately $839.5 million, an increase of 34.2% from approximately $625.7 million for the fiscal year ending December 31, 2022[2]. - The group's gross profit for the fiscal year ending December 31, 2023, was approximately $409.6 million, up 34.7% from approximately $304.1 million for the fiscal year ending December 31, 2022[2]. - The adjusted net loss for the fiscal year ending December 31, 2023, narrowed to approximately $298.2 million from approximately $359.4 million in the previous year[3]. - The group reported a loss attributable to equity holders of approximately $95.5 million, a decrease from approximately $226.9 million in the previous year[3]. - Total revenue for the year ended December 31, 2023, was $839,529 thousand, compared to $625,698 thousand in 2022, representing a year-over-year increase of approximately 34.2%[19]. - The company reported a net fair value gain of $2,425 thousand on financial assets measured at fair value through profit or loss for the year[20]. - The net loss for the group was approximately $355.1 million in 2023, compared to a net loss of about $428.0 million in 2022, with an adjusted net loss of approximately $298.2 million[73]. Revenue Breakdown - The external revenue from non-cell therapy business was approximately $554.5 million, a growth of 8.9% compared to approximately $509.0 million in the previous year[2]. - The external revenue from cell therapy business surged to approximately $285.0 million, marking a significant increase of 144.2% from approximately $116.7 million in the previous year[2]. - Revenue from the Life Sciences Services and Products segment was approximately $412.9 million, a 14.5% increase from $360.5 million for the year ended December 31, 2022[52]. - Revenue from biopharmaceutical development services was approximately $109.5 million, a decrease of 12.4% compared to $125.0 million for the year ended December 31, 2022[54]. - Revenue from industrial synthetic biological products increased by 11.4% to approximately $43.1 million, while adjusted gross profit remained stable at approximately $16.6 million[57]. - Cell therapy revenue surged by 143.7% to approximately $285.1 million, with adjusted gross profit increasing by 171.5% to approximately $143.9 million, primarily due to collaboration and licensing agreements with Janssen[59]. Expenses and Costs - The group's total operating expenses, including R&D, were approximately $432.8 million, compared to $390.1 million in the previous year[7]. - The cost of services and products for 2023 was $213,555 thousand, up from $139,052 thousand in 2022, reflecting an increase of about 53.6%[21]. - Employee benefits expenses, including salaries and wages, totaled $510,429 thousand, up from $439,971 thousand in 2022, reflecting an increase of approximately 16.0%[21]. - Administrative expenses increased by 16.9% to approximately $213.4 million, primarily due to investments in talent and infrastructure[67]. - Selling and distribution expenses rose by 3.6% to approximately $174.3 million, while adjusted selling and distribution expenses increased by 4.9%[66]. Assets and Liabilities - Total non-current assets increased to $1,034,191 thousand in 2023 from $781,433 thousand in 2022, representing a growth of 32.4%[10]. - Current assets rose to $2,353,111 thousand in 2023, up from $1,764,950 thousand in 2022, marking an increase of 33.3%[10]. - The total liabilities decreased from $1,183,715 thousand in 2022 to $1,342,948 thousand in 2023, a reduction of 8.5%[11]. - The company’s equity increased to $2,044,354 thousand in 2023 from $1,362,668 thousand in 2022, an increase of 50%[12]. - The total equity as of December 31, 2023, was $1,931,934,000, an increase from $1,463,216,000 in 2022, representing a growth of approximately 31.9%[47]. - The company's total liabilities decreased to $1,893,724,000 in 2023 from $1,279,713,000 in 2022, indicating a reduction of approximately 48%[38]. Cash Flow and Financing - Cash and cash equivalents increased significantly to $1,446,403 thousand in 2023 from $1,023,999 thousand in 2022, reflecting a growth of 41.3%[13]. - The net cash flow from operating activities was negative at $(286,911) thousand in 2023, compared to $(120,292) thousand in 2022, indicating a decline in operational cash flow[13]. - The investment activities resulted in a net cash outflow of $(357,728) thousand in 2023, compared to $(443,296) thousand in 2022, showing a decrease in investment spending[13]. - Financing activities generated cash inflow of approximately $1.1 billion, with net proceeds from common stock and warrants amounting to about $783.4 million[80]. - The total interest-bearing loans and borrowings as of December 31, 2023, were $287,207,000, compared to $261,006,000 in 2022, reflecting an increase of about 10%[41]. Research and Development - The company continues to invest in research and development to enhance its product offerings and market position[6]. - Research and development expenses increased by 10.9% to approximately $432.8 million in 2023, up from about $390.1 million in 2022, primarily due to increased investment in talent and ongoing clinical trial activities[68]. - The company plans to invest in R&D to enhance technology and production capabilities for cell and gene therapies and other advanced therapies[53]. - The company will continue to invest in synthetic biology R&D to expand market opportunities and optimize production efficiency[110]. Strategic Initiatives - The company aims to improve global production capacity and provide localized supply chain solutions in the U.S., Singapore, and China to support long-term growth[53]. - The company plans to expand production capacity globally to meet strong customer demand, including investments in molecular biology and protein business capacity[98]. - The company has established a direct sales network covering over 100 countries, with significant revenue contributions from the U.S. ($506.0 million) and China ($162.5 million)[49]. - The company aims to enhance operational efficiency through digital transformation and lean management systems[110]. Shareholder and Governance - The company has decided not to declare any dividends for the year ended December 31, 2023, consistent with the previous year[24]. - The board of directors did not recommend a final dividend for the year ending December 31, 2023, to retain resources for business development[114]. - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and risk management[119]. - The annual general meeting is scheduled for May 17, 2024, with a suspension of share transfer registration from May 13 to May 17, 2024, to determine voting eligibility[121].

Company Operations and Growth - The company operates four main platforms: Life Sciences Services and Products, CDMO, Industrial Synthesis Products, and Global Cell Therapy, all of which achieved growth in R&D and commercialization by June 30, 2023[5]. - The professional team consists of approximately 6,414 members, supporting operations in over 100 countries, including China, the USA, and several European nations[5]. - The CDMO platform focused on expanding global capacity and commercialization networks during the reporting period[5]. - The company emphasizes optimizing operational processes to ensure high-quality end-to-end delivery, enhancing customer competitiveness[5]. - Legend Biotech, a subsidiary, is developing a CAR-T cell therapy for multiple myeloma in collaboration with Janssen Biotech, with cilta-cel as the lead candidate[5]. - The Life Sciences Services and Products division provides essential services such as gene synthesis and antibody development, contributing significantly to global life sciences research[5]. - The company aims to establish a healthy biotechnology ecosystem through strategic collaborations with business partners[5]. - The report period ended on June 30, 2023, indicating a focus on continuous improvement and innovation in biotechnology[5]. - The company is committed to making people and nature healthier through its proprietary gene synthesis technology[5]. Financial Performance - The group's revenue for the six months ended June 30, 2023, was approximately $391.3 million, an increase of 26.4% compared to approximately $309.6 million for the same period in 2022[11]. - The gross profit for the same period was approximately $175.0 million, up 3.9% from approximately $168.5 million in 2022[11]. - The adjusted net loss for the six months ended June 30, 2023, was approximately $162.0 million, compared to an adjusted net loss of approximately $134.8 million for the same period in 2022[11]. - The external revenue from the non-cell therapy business was approximately $281.8 million, a 13.8% increase from approximately $247.7 million in 2022, while the cell therapy business generated external revenue of approximately $109.5 million, a significant increase of 76.9% from approximately $61.9 million[11]. - The adjusted operating profit for the life sciences services and products segment was approximately $39.2 million, an increase of 16.7% from approximately $33.6 million in 2022[17]. - The revenue from the biopharmaceutical development services segment was approximately $65.1 million, a slight increase of 3.8% from approximately $62.7 million in 2022[18]. - The adjusted gross profit for the biopharmaceutical development services segment decreased by 18.4% to approximately $19.5 million, down from approximately $23.9 million in 2022[18]. - The cell therapy business reported an adjusted operating loss of approximately $205.9 million for the period[16]. - The life sciences services and products accounted for approximately 50.8% of the total revenue, while cell therapy accounted for approximately 28.0%[15]. - The loss attributable to the company's owners was approximately $93.6 million, compared to approximately $135.5 million for the same period in 2022[11]. Investments and Financial Position - As of June 30, 2023, the group's cash and bank balances were approximately $1.4 billion, an increase from about $941.9 million as of December 31, 2022[34]. - The group held significant investments valued at approximately $259.4 million as of June 30, 2023, compared to $222.5 million as of December 31, 2022[38]. - The group invested in wealth management products with expected yields ranging from 1.4% to 5.2%, with maturities from 1 day to about 1 year, all of which were non-defaulting as of June 30, 2023[39]. - The fair value of the equity portion of Probio B preferred shares was assessed at approximately $1.6 million, while the debt portion was valued at about $37.9 million, including interest of approximately $1.1 million[32]. - The group had approximately $335.3 million in available but undrawn bank credit as of June 30, 2023, compared to about $146.9 million as of December 31, 2022[34]. - The company reported a foreign exchange loss of $15,777 thousand for the period, a decrease from a loss of $24,581 thousand in the previous year, indicating an improvement of about 35.7%[127]. - The company’s total liabilities decreased to $1,298,277 thousand from $1,091,715 thousand, indicating a reduction of about 18.9%[130]. - The company's equity increased to $2,086,044 thousand as of June 30, 2023, compared to $1,362,668 thousand at the end of 2022, reflecting a growth of approximately 53.0%[130]. Research and Development - Research and development expenses increased by 16.7% to approximately $207.3 million from $177.6 million in the same period of 2022[27]. - The company aims to enhance R&D efficiency and cost-effectiveness through investments in CGT-related services and products[65]. - The company plans to continue advancing its pipeline projects in cell therapy and evaluate external collaboration opportunities[68]. - The company is focusing on optimizing pipelines and improving R&D success rates in response to the slowdown in biotech investment[65]. Employee and Management Compensation - The total employee compensation expense for the group was approximately $260.9 million, accounting for about 66.7% of total revenue[69]. - The company invests in continuous education and training programs for employees to enhance their skills and knowledge[71]. - The compensation policy for directors and senior management is based on the company's performance and market data[71]. - The adjusted annual remuneration for Dr. Zhang Fangliang is $572,000, based on individual and overall group performance[115]. - The adjusted annual remuneration for Mr. Meng Jiange is $465,139, reflecting personal and group performance adjustments[116]. - The adjusted annual remuneration for Ms. Wang Ye is $668,109, based on performance metrics[116]. Corporate Governance and Compliance - The company has a strong commitment to environmental, social, and governance (ESG) practices, as indicated by its risk management and governance committees[8]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[111]. - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2023, ensuring compliance with relevant accounting standards and regulations[113]. - The company has adopted a self-developed code for securities trading, ensuring compliance with the standards set forth in the listing rules[110]. Market Strategy and Future Outlook - The company plans to actively establish production capacity globally to meet strong future customer demand[56]. - Investment will continue in molecular biology and protein business capacity in both China and overseas markets, including expanding GMP production capacity for key reagents[56]. - The company aims to enhance CARVKI production capacity in North America and Europe to expand the treatable patient population following anticipated approval of a supplemental biologics license application[56]. - The company plans to continue expanding its market presence and investing in new technologies and product development[1]. - Future guidance indicates a focus on enhancing operational efficiency and exploring potential mergers and acquisitions to drive growth[1].

Financial Performance - For the six months ended June 30, 2023, the group's revenue was approximately $391.3 million, an increase of 26.4% compared to approximately $309.6 million in the same period of 2022[2]. - The gross profit for the same period was approximately $175.0 million, up 3.9% from approximately $168.5 million in the prior year[2]. - The group reported a loss of approximately $245.8 million, compared to a loss of approximately $233.6 million in the same period of 2022[2]. - The adjusted net loss for the six months was approximately $162.0 million, compared to an adjusted net loss of approximately $134.8 million in the same period of 2022[2]. - The loss attributable to owners of the company was approximately $93.6 million, compared to a loss of approximately $135.5 million in the same period of 2022[2]. - The comprehensive loss for the period totaled $258.170 million, with the loss attributable to the parent company amounting to $161.901 million[25]. - The company reported a pre-tax loss of $93,581 for the six months ended June 30, 2023, compared to a loss of $135,507 in the same period of 2022, indicating an improvement[42]. - The net loss for the group during the reporting period was approximately $245.8 million, compared to a net loss of $233.6 million in the same period last year[84]. Revenue Breakdown - The external revenue from non-cell therapy business was approximately $281.8 million, a 13.8% increase from approximately $247.7 million in the same period of 2022[2]. - The external revenue from cell therapy business was approximately $109.5 million, a significant increase of 76.9% from approximately $61.9 million in the same period of 2022[2]. - Revenue from the Life Sciences Services and Products segment was approximately $203.0 million, a 15.3% increase from approximately $176.0 million in the previous year[67]. - Revenue from biopharmaceutical development services was approximately $65.1 million, a slight increase of 3.8% compared to approximately $62.7 million in the same period of 2022[68]. - Revenue from industrial synthetic biological products was approximately $18.2 million, an increase of 8.3% compared to approximately $16.8 million in the same period of 2022[70]. - Revenue from cell therapy was approximately $109.7 million, a significant increase of 76.9% compared to approximately $62.0 million in the same period of 2022, primarily due to collaboration revenue from CARVYKTI sales[71]. Assets and Liabilities - As of June 30, 2023, total non-current assets increased to $915,969 thousand from $781,433 thousand as of December 31, 2022, representing a growth of approximately 17.2%[11]. - Current assets rose significantly to $2,468,352 thousand from $1,764,950 thousand, marking an increase of about 40%[12]. - The total liabilities decreased from $1,183,715 thousand as of December 31, 2022, to $1,298,277 thousand as of June 30, 2023, indicating a reduction of approximately 7.5%[13]. - The company reported a net asset value of $2,086,044 thousand as of June 30, 2023, compared to $1,362,668 thousand at the end of 2022, representing a growth of approximately 53%[13]. - The company’s total liabilities as of June 30, 2023, were not explicitly stated but can be inferred to have increased due to the rise in lease liabilities and other financial obligations[59]. Cash Flow and Investments - The company's cash and bank balances surged to $1,397,334 thousand, up from $941,937 thousand, reflecting a growth of approximately 48.4%[12]. - The company reported cash and bank balances of $1,397,334,000, an increase from $941,937,000 as of December 31, 2022, representing a growth of approximately 48.4%[53]. - The group held significant investments valued at approximately $259.4 million as of June 30, 2023, compared to $222.5 million as of December 31, 2022[87]. - The company invested $40 million in credit-linked notes issued by JPMorgan, rated A- by S&P, with a fixed annual interest rate of 5.2%[90]. - The company holds $60 million in JPMorgan's U.S. Government Money Market Fund, rated AAAm by S&P, and $62 million in JPMorgan's 100% U.S. Treasury Money Market Fund, also rated AAAm by S&P[90]. Operational Highlights - The company is engaged in the development and commercialization of CARVYKTI, sharing profits with partners, which may impact future revenue streams[20]. - The company plans to expand production capacity globally to meet strong customer demand, particularly in life sciences services and products[101]. - In China, the company aims to enhance its capabilities in antibody discovery, process development, and GMP production, along with building plasmid and virus GMP production facilities in both China and the US[101]. - The company continues to focus on the CGT industry, leveraging partnerships to enhance R&D efficiency and cost-effectiveness[109]. - The life sciences business has served over 200,000 customers across more than 100 countries since its establishment in 2002[110]. Employee and Compensation - As of June 30, 2023, the company had approximately 6,414 employees[64]. - The total number of employees is 6,414, with production accounting for 49.6% (3,183 employees) of the workforce[113]. - The total employee compensation expenses were about $260.9 million, accounting for approximately 66.7% of total revenue[111]. Compliance and Governance - The Audit Committee has reviewed the unaudited interim results for the six months ending June 30, 2023, ensuring compliance with relevant accounting standards and regulations[121]. - The company has adopted a self-developed code for securities trading, which is stricter than the standards set by the listing rules[119]. - The company has established a Sanctions Risk Control Committee to monitor activities potentially subject to economic sanctions, ensuring effective oversight[122].

Financial Performance - Total revenue for the year ended December 31, 2022, was approximately $625.7 million, representing a 27.7% increase from about $490.1 million for the year ended December 31, 2021[14]. - The adjusted net loss for the year ended December 31, 2022, was approximately $359.4 million, compared to an adjusted net loss of about $327.8 million for the year ended December 31, 2021, reflecting an increase in adjusted net loss of 9.8%[13]. - The gross profit for the year ended December 31, 2022, was approximately $304.1 million, up 7.6% from about $282.5 million for the year ended December 31, 2021[14]. - The external revenue from the non-cell therapy business was approximately $509.0 million, a 19.8% increase from about $424.7 million for the year ended December 31, 2021[14]. - The external revenue from the cell therapy business was approximately $116.7 million, which is an increase of 78.4% compared to about $65.4 million for the year ended December 31, 2021[14]. - The company reported a five-year revenue growth from $578.4 million in 2018 to $625.7 million in 2022, indicating a consistent upward trend in revenue[16]. - The company reported a net loss attributable to the owners of the company for the year ended December 31, 2022, was approximately $226.9 million, a decrease from a net loss of about $358.7 million for the year ended December 31, 2021[13]. - The total loss for the year ended December 31, 2022, was approximately $428.0 million, down from a loss of about $518.3 million for the year ended December 31, 2021[14]. Revenue Breakdown - The four main business segments generated external revenues of approximately $349.8 million (55.9%), $120.2 million (19.2%), $38.2 million (6.1%), and $116.7 million (18.7%) respectively[6]. - Sales to the United States, Mainland China, Europe, Asia-Pacific (excluding Mainland China), and other regions were approximately $332.1 million (53.1%), $166.7 million (26.7%), $53.3 million (8.5%), $59.0 million (9.4%), and $14.6 million (2.3%) respectively[8]. - The life sciences services and products segment generated revenue of approximately $360.5 million, a growth of 14.2% from approximately $315.8 million for the year ended December 31, 2021[35]. - Revenue from biopharmaceutical development services reached approximately $125.0 million, a 53.6% increase from $81.4 million in the previous year[38]. - Cell therapy revenue was approximately $117.0 million, a 70.0% increase from $68.8 million in the previous year, primarily driven by collaboration revenue from CARVYKTI commercialization[45]. Operational Developments - The CDMO platform is expanding its global GMP capacity and commercialization network to meet customer demands for phased delivery and mid-to-large scale production[7]. - The company expanded its overseas production capabilities in New Jersey and Singapore to enhance service levels and customer experience, addressing global supply chain vulnerabilities[20]. - Kingsray plans to improve the efficiency of its overseas production to match domestic costs, focusing on logistics cost reduction and talent retention[21]. - The company aims to enhance global production capacity and optimize logistics through local supply chain solutions to support long-term business growth[36]. - The company plans to expand services to biopharmaceuticals and GCT late-stage development and commercialization through new facility investments[39]. Research and Development - The company is focused on creating positive social impact through its innovative healthcare solutions, exemplified by the launch of CARVYKTI[17]. - The biopharmaceutical development services segment provided comprehensive services for antibody drug discovery and development, aiding biopharmaceutical companies from early drug discovery to clinical development[37]. - The company is developing a comprehensive early-stage autologous CAR-T candidate product portfolio targeting various cancers, including non-Hodgkin lymphoma and pancreatic cancer[47]. - The company plans to invest further in platform upgrades and quality improvements to support business growth[39]. - Research and development expenses increased by 8.8% to approximately $390.1 million in 2022, driven by continued investment in competitive talent and stock compensation[54]. Financial Position and Investments - Cash and cash equivalents were approximately $1 billion as of December 31, 2022, down from $1.2 billion in 2021, while restricted cash increased to approximately $27.2 million from about $1.4 million[68]. - Significant investments held as of December 31, 2022, totaled approximately $222.5 million, a substantial increase from $42.6 million in 2021, with a notable rise in current financial assets at fair value[71]. - The company has established its financing platforms for its growing business segments, allowing for strategic investments when market conditions improve[22]. - The company has successfully raised additional funding for its burgeoning biopharmaceutical CDMO business, aiming to establish it as a mature independent entity in the coming years[22]. - The company reported an operating loss of approximately $458.1 million, compared to a loss of $394.0 million in the previous year, with R&D expenses of about $335.6 million[46]. Market and Competitive Landscape - The company continues to face a challenging macroeconomic environment, with high inflation and geopolitical tensions impacting investor sentiment in the biotechnology sector[18]. - Kingsray emphasizes the importance of high-quality, differentiated products and services to help clients advance their projects and create commercial value[19]. - The company aims to enhance its commercial capabilities to increase market share, focusing on large clients and overseas markets in the synthetic biology sector[42]. - The company is focused on expanding its market presence and enhancing product offerings through ongoing research and development initiatives[106]. - The company aims to enhance its business development activities and expand its market presence through strategic initiatives[171]. Governance and Management - The board of directors currently consists of 11 members, including 4 executive directors, 3 non-executive directors, and 4 independent non-executive directors[140]. - The company has expanded its board with experienced professionals from various sectors, enhancing its strategic capabilities[144]. - The company emphasizes the importance of risk management and strategic planning, with the executive director responsible for overall strategic development and investment mergers and acquisitions[142]. - The company has a strong emphasis on research and development, with significant investments in innovative biotechnological solutions[149]. - The company is committed to maintaining high standards in its operational and financial management practices to drive growth and sustainability[144]. Employee and Talent Management - The total employee count of the group is approximately 6,213, with labor costs amounting to approximately $440.0 million, representing about 70.3% of total revenue[133]. - The significant increase in labor costs is primarily driven by performance-based long-term incentives, which the company views as a necessary long-term investment in its talent pool[133]. - Continuous education and training programs are provided to employees to enhance their skills and knowledge, covering various aspects including technical knowledge and compliance training[136]. - The company is committed to providing statutory and supplementary insurance and benefits for its employees as per relevant regulations[137]. - The compensation policy for directors and senior management is based on the company's operational performance, individual performance, and comparable market data, reviewed regularly by the compensation committee[135]. Strategic Initiatives - The company aims to focus on the GCT field, developing innovative cell therapy products and related research and production technologies, viewing the GCT market as highly promising[128]. - The company plans to enhance operational efficiency through digital transformation and lean management systems, while expanding global production capacity to reduce supply chain risks[131]. - In the CDMO sector, the company will focus on optimizing biopharmaceutical production technology platforms and expanding expertise in commercial-stage production[131]. - The company is committed to investing in expanding GMP plasmid, viral vector, and mRNA production capacity to strengthen its position in both China and overseas markets[131]. - The company aims to enhance its competitiveness in synthetic biology by leveraging its bioinformatics platform, gene editing technology, and large-scale industrial fermentation[132].

Company Overview - As of June 30, 2022, the company has established four main platforms, including a leading life sciences services and products platform, a CDMO platform, an industrial synthetic products platform, and a comprehensive global cell therapy platform[6]. - The company operates in over 100 countries, with a strategic focus on building a healthy biotechnology ecosystem through partnerships[6]. - The company aims to contribute to the development of the biotechnology and biopharmaceutical industry, fostering a win-win situation among all industry participants[6]. Workforce and Talent Acquisition - The company’s workforce has increased to approximately 5,573 employees as of June 30, 2022, reflecting a commitment to talent acquisition and research and development[6]. - Total employee compensation expenses amounted to approximately $205.1 million, representing 67.3% of total revenue[47]. - The workforce consisted of 5,573 employees, with 44.1% in production, 10.0% in sales and marketing, 18.6% in administration, 13.1% in R&D, and 14.2% in management[49]. Financial Performance - The company's revenue for the six months ended June 30, 2022, was approximately $304.7 million, an increase of 32.7% compared to approximately $229.6 million for the same period in 2021[11]. - The gross profit for the same period was approximately $175.5 million, up 26.6% from approximately $138.6 million in the prior year[11]. - The adjusted net loss for the six months was approximately $130.1 million, compared to an adjusted net loss of approximately $135.8 million in the same period of 2021[11]. - The revenue from non-cell therapy business was approximately $247.7 million, a 26.6% increase from approximately $195.7 million in the previous year[11]. - The revenue from cell therapy business was approximately $57.0 million, representing a significant increase of 68.1% compared to approximately $33.9 million in the prior year[11]. - The revenue from life sciences services and products was approximately $176.0 million, an increase of 15.8% year-over-year[16]. - The revenue from biopharmaceutical development services reached approximately $62.7 million, a remarkable increase of 99.0% compared to the previous year[17]. - The backlog for biopharmaceutical development services stood at $228.0 million as of June 30, 2022[17]. Research and Development - Significant investments in talent recruitment and R&D are aimed at enhancing technological competitiveness and driving future growth[7]. - Research and development expenses for the six months were approximately $177.4 million, slightly up from approximately $175.1 million in the same period of 2021[11]. - The company plans to focus R&D and capital investment in the GCT field, developing innovative cell therapy products like CARVYKTI™[52]. Regulatory Approvals and Product Development - The company’s subsidiary, Legend Biotech, received FDA approval for its CAR-T therapy cilta-cel for treating relapsed or refractory multiple myeloma in adult patients[7]. - In May 2022, the European Commission granted conditional marketing authorization for cilta-cel for adult patients with relapsed and refractory multiple myeloma[7]. - The FDA approved CARVYKTI™ for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior therapies[50]. - The European Commission granted conditional marketing authorization for CARVYKTI™ for adult patients with relapsed or refractory multiple myeloma who have received at least three prior therapies[51]. Operational Efficiency - The company emphasizes optimizing operational processes to achieve the highest quality end-to-end delivery, enhancing customer competitiveness[6]. - The group plans to invest in upgrading supply chain and IT infrastructure to improve operational efficiency and adapt to anticipated rapid business growth[40]. - The company has taken measures to ensure business continuity amid the COVID-19 pandemic, with limited adverse financial impacts observed as of the report date[40]. Financial Position and Cash Flow - As of June 30, 2022, the group had cash and cash equivalents of approximately $782.2 million, down from approximately $1.2 billion at the end of 2021[30]. - The current ratio as of June 30, 2022, was approximately 2.9, down from 3.5 as of December 31, 2021, while the debt-to-asset ratio was approximately 58.6%, up from 51.0%[39]. - The company reported a net cash outflow from operating activities of $61,997 thousand for the six months ended June 30, 2022, compared to an outflow of $35,854 thousand for the same period in 2021[115]. - The company incurred a net cash outflow from investing activities of $336,872 thousand for the six months ended June 30, 2022, compared to $168,918 thousand in the same period of 2021[116]. Shareholder Structure and Equity - As of June 30, 2022, the company had 2,111,828,632 shares issued, with key executives holding significant stakes, including Wang Ye with approximately 40.17%[56]. - The company’s board members and executives collectively hold a total of 848,329,253 shares, representing 40.17% of the total shares[56]. - The total number of shares held by major shareholders indicates a concentrated ownership structure, which may impact corporate governance and decision-making[63]. - The company has a diverse range of shareholders, including family trusts and institutional investors, which may influence its strategic direction and market expansion efforts[65]. Stock Options and Restricted Shares - The company has adopted pre-IPO and post-IPO share option plans to reward selected participants for their contributions[67]. - As of June 30, 2022, there were 1,843,320 unexercised options under the pre-IPO share option plan[69]. - The post-IPO share option plan was approved on December 7, 2015, and has 20,892,400 unexercised options as of the latest report[70]. - A total of 81,513 restricted shares were granted to employees under the 2019 Restricted Share Award Scheme on March 22, 2022[86]. - The total number of restricted shares granted under the 2019 Restricted Share Award Scheme is capped at 10% of the issued share capital as of the adoption date[86]. Compliance and Governance - The company maintained compliance with corporate governance codes throughout the reporting period, ensuring accountability and shareholder protection[103]. - The Audit Committee reviewed the financial reporting processes and internal controls, affirming adherence to relevant accounting standards[104]. - There were no reported violations of the securities trading code by directors or relevant employees during the reporting period[102]. Financial Liabilities and Fair Value - The fair value loss on preferred shares and warrants amounted to approximately $45.8 million during the reporting period[28]. - The fair value of financial liabilities measured at fair value through profit or loss increased to $419,513,000 as of June 30, 2022, compared to $371,128,000 as of December 31, 2021[184]. - The company assessed that the fair value changes due to its own credit risk for interest-bearing bank loans and other borrowings were not significant as of June 30, 2022[186].

Financial Performance - The group's revenue for the year ended December 31, 2021, was approximately $511.1 million, an increase of 30.8% compared to approximately $390.8 million for the year ended December 31, 2020[13]. - The adjusted net loss for the group was approximately $307.3 million, compared to an adjusted net loss of approximately $170.8 million for the year ended December 31, 2020[13]. - The net loss attributable to owners of the company was approximately $347.9 million, compared to approximately $204.9 million in the previous year[15]. - The group incurred a total loss of approximately $501.0 million for the year, compared to a loss of approximately $281.4 million in the previous year[14]. - The company reported a net loss attributable to shareholders of $347.865 million in 2021, worsening from a loss of $204.945 million in 2020[17]. - The company achieved a revenue of $511.062 million, representing a 31% increase from the previous year[17]. - The gross profit for 2021 was $303.484 million, which is an 18.5% increase compared to 2020[17]. - External revenue from non-cell therapy business was approximately $424.7 million, up 34.8% from approximately $315.1 million in the previous year[13]. Revenue Breakdown - The four main business segments generated external revenues of approximately $305.9 million (59.8%), $80.3 million (15.7%), $38.2 million (7.5%), and $86.4 million (16.9%) respectively[7]. - Revenue from the Life Sciences Services and Products segment was approximately $315.8 million, a 26.4% increase from about $249.8 million in the previous year[33]. - The cell therapy business reported an external revenue of approximately $86.4 million, an increase of 14.1% from approximately $75.7 million in the previous year[13]. - Revenue from biopharmaceutical development services reached approximately $81.4 million, a 101.5% increase from $40.4 million in the previous year[38]. - Revenue from industrial synthetic biological products was approximately $38.6 million, a 33.6% increase from $28.9 million[42]. - Revenue from the cell therapy division was approximately $89.8 million, an 18.6% increase from $75.7 million[45]. Research and Development - Research and development expenses for the year were approximately $358.4 million, a 36.1% increase from approximately $263.4 million in the previous year[15]. - The company plans to invest aggressively in R&D and business development to capitalize on new growth opportunities[20]. - The company aims to enhance operational efficiency through digital transformation and lean management systems[80]. - The company is committed to increasing R&D investment to improve product competitiveness and meet customer needs[80]. Operational Expansion - The company expanded its direct sales network to over 100 countries, generating approximately $267.2 million (52.3%) from the US, $144.4 million (28.2%) from mainland China, and $43.4 million (8.5%) from Europe[10]. - The company employed approximately 5,260 staff members as of December 31, 2021, reflecting its growth and operational expansion[7]. - The company plans to expand its capabilities in gene and cell therapy through new GMP facilities and enhance its quality systems to meet global standards[39]. - The company aims to leverage advanced technologies to improve service platforms and expand its global market presence through internal capabilities and external collaborations[39]. Strategic Initiatives - The company aims to enhance customer competitiveness through high-quality, timely, and cost-effective services and products[7]. - The company is developing a CAR-T therapy, cilta-cel, in collaboration with Janssen Biotech, with regulatory submissions made to both the EMA and FDA[10]. - The company aims to become a leading CDMO in gene and cell therapy, focusing on innovative tools and technologies to support this goal[19]. - The company is targeting the BCMA market, which is less crowded and presents greater opportunities compared to the CD-19 market[22]. Financial Position - Cash and cash equivalents increased to $1.180971 billion in 2021, up from $629.058 million in 2020[17]. - The net assets of the company reached $1.092955 billion in 2021, reflecting a significant increase from $815.591 million in 2020[17]. - The company had approximately $145.5 million in unused bank credit facilities as of December 31, 2021, down from about $178.3 million in 2020[62]. - The company’s property, plant, and equipment increased by 27.4% to approximately $439.9 million, up from about $345.2 million in 2020, due to ongoing facility construction and equipment procurement[59]. Corporate Governance - The board of directors consists of ten members, including three executive directors and four independent non-executive directors[87]. - The company emphasizes the importance of corporate governance with independent directors overseeing key committees[99]. - The leadership team includes professionals with advanced degrees, such as MBAs and PhDs, contributing to informed decision-making[100]. - The company has established a robust framework for compliance and risk management through its audit committee[99]. Market Outlook - The company provided guidance for 2022, projecting a revenue growth of 20% to 25%[28]. - Future outlook remains positive, with expectations of continued growth driven by innovation and market expansion[28]. - The company is expanding its market presence in Europe, targeting a 15% market share by 2023[28]. - The company is exploring potential acquisitions to strengthen its portfolio, with a focus on companies that align with its strategic goals[108].

Company Overview - The company has established four major platforms: life sciences services and products, CDMO, industrial synthetic products, and a global cell therapy platform, all showing strong growth from R&D to commercial delivery [4]. - As of June 30, 2021, the company operates in over 100 countries with approximately 4,558 employees [4]. - The life sciences services and products segment remains a solid revenue foundation, maintaining its position as one of the largest molecular biology contract research companies globally [4]. - The company aims to enhance quality of life, address environmental issues, and leverage synthetic biology for cost-effective solutions across various industries [7]. - The company is committed to continuous improvement in technology and management reforms to build a better future [7]. Financial Performance - The company's revenue for the six months ended June 30, 2021, was approximately $229.6 million, an increase of 38.0% compared to $166.4 million in the same period of 2020 [12]. - Gross profit for the same period was approximately $138.6 million, up 28.1% from $108.2 million in 2020 [12]. - The adjusted net loss was approximately $134.3 million, compared to an adjusted net loss of $68.7 million in the same period of 2020 [12]. - Research and development expenses for the six months ended June 30, 2021, were approximately $175.1 million, a 51.6% increase from $115.5 million in 2020 [12]. - The company incurred a loss attributable to shareholders of approximately $91.1 million, compared to a loss of $113.1 million in the same period of 2020 [13]. - The company's net loss for the reporting period was approximately $156.1 million, compared to a net loss of about $160.5 million in the same period of 2020 [33]. Business Segments and Growth - The CDMO platform focuses on end-to-end gene and cell therapy development, with GMP facilities under construction to meet client demands for phased delivery [5]. - The company’s subsidiary, Legend Biotech, is developing cilta-cel, a CAR-T therapy for multiple myeloma, which has shown promising clinical results and received breakthrough therapy designation from the Chinese regulatory authority [7]. - All non-cell therapy business segments achieved external sales growth during the reporting period, reflecting significant investment in talent and R&D [7]. - Revenue from life sciences services and products was approximately $152.0 million, a 32.2% increase from $115.0 million in the same period of 2020 [17]. - The cell therapy business reported a revenue of approximately $33.9 million, a 46.8% increase from $23.1 million in the same period of 2020 [12]. Operational Efficiency and Investments - The company emphasizes optimizing operational processes to ensure high-quality end-to-end delivery and strategic collaboration with business partners [4]. - The company plans to invest in upgrading supply chain and IT infrastructure to improve operational efficiency and accommodate expected rapid business growth [38]. - The company continues to invest in sales and distribution to build a strong future project pipeline [20]. - The company plans to actively establish global production capacity to meet strong customer demand, including expanding automation capabilities in China and the U.S. [38]. Shareholder and Stock Options - As of June 30, 2021, Wang Luquan held approximately 22.76% of the issued share capital of GS Corp [7]. - The total number of shares held by GS Corp is 2,086,073,018, with major shareholders owning significant percentages: GS Corp (38.81%), Zhang Fangliang (41.60%), and Huang Lili (41.60%) [9]. - The company has adopted pre-IPO and post-IPO share option plans to reward selected participants for their contributions [10]. - The total number of stock options exercised during the reporting period was 20,000 [80]. - The company plans to continue expanding its stock option program to incentivize employees and align their interests with shareholders [83]. Regulatory and Compliance - The company is subject to evolving regulatory risks under the new Biosecurity Law in China, which may impact its operations and compliance requirements [40]. - The company has not made any provisions for contingent liabilities related to an ongoing investigation by Chinese customs authorities, as it cannot reliably estimate the potential liability [35]. - The company confirmed that business operations remained normal despite ongoing investigations [184]. Cash Flow and Liquidity - As of June 30, 2021, the group's cash and cash equivalents amounted to approximately $957.6 million, an increase from $629.1 million as of December 31, 2020 [48]. - The company’s cash and cash equivalents decreased by $2.825 million during the six months ended June 30, 2021, indicating a reduction in liquidity [122]. - The company reported a significant increase in property, plant, and equipment to $395,252 thousand, up from $345,215 thousand, which is an increase of approximately 14.5% [114]. Employee Compensation and Management - Total employee compensation expenses for the group were approximately $149.6 million, representing 65.2% of total revenue [50]. - The total compensation paid to key management personnel increased to $2,879,000, compared to $1,378,000 in the previous year, indicating a rise of approximately 109% [193]. - The company’s management includes key personnel such as Liu Zhenyu and Wei Shiniu, who were granted options on specific dates [80]. Future Outlook - The company is focusing on research and development investments, GMP capacity, and partnerships with third parties to strengthen its business in high-value products [58]. - The necessity for localized supply of critical reagents and equipment in the life sciences industry has been highlighted due to geopolitical and economic factors [58]. - The company has identified alternative trade routes and suppliers to mitigate risks associated with transportation into and out of China [58].