Group 1 - The core viewpoint is that the company is experiencing strong growth driven by high industry demand and the advantages of its CRDMO model, leading to an upward revision of profit forecasts and target price [1][2] - For 2024, the company expects revenue and adjusted net profit to grow by 91% and 185% year-on-year, respectively, with 53 new contracts signed, bringing the total project count to 194 [2] - The company maintains a leading market share, having enabled clients to submit 30 IND applications, ranking first globally, and 60% of ADCBD transactions over $1 billion by Chinese companies utilized its CRDMO services [2] Group 2 - The company is expanding its global dual-factory layout, with North American revenue expected to grow by 180% in 2024, and the contribution from regions outside China increasing from 69% in 2023 to 74% [3] - The company is rapidly advancing its capacity construction in Singapore, expected to be operational by the end of 2025, while domestic capacity continues to expand with new production lines planned for 2025-2027 [3] - Management anticipates capital expenditures exceeding 1.4 billion RMB in 2025, supported by 3.5 billion RMB in cash and positive operating cash flow by the end of 2024 [3]

证券研究报告 公司研究 [Table_ReportType] 公司点评报告 [Table_StockAndRank] 药明合联 (2268.HK) [Table_Author] 唐爱金 医药首席分析师 执业编号：S1500523080002 邮 箱：tangaijin@cindasc.com 贺鑫 医药行业分析师 执业编号：S1500524120003 邮 箱：hexin1@cindasc.com 信达证券股份有限公司 CINDA SECURITIES CO.,LTD 北京市西城区宣武门西大街甲127号金隅大厦B 座 邮编：100031 [Table_Title] 全方位高增长，订单储备充足，产能持续 扩张 [Table_ReportDate] 2025 年 03 月 25 日 [Table_S 事件：2025 ummar年y]3 月 24 日，公司发布 2024 年全年业绩简报。2024 年公司 实现营业收入 40.52 亿元，同比增长 91%；实现毛利润 12.40 亿元，同比 增长 122%，对应毛利率达到 30.6%；实现净利润 10.69 亿元，同比增长 277%，对应净利率达到 26.4%；实现经 ...

证券研究报告 公司研究 [Table_ReportType] 公司点评报告 [Table_StockAndRank] 药明合联 (2268.HK) [Table_Author] 唐爱金 医药首席分析师 执业编号：S1500523080002 邮 箱：tangaijin@cindasc.com 贺鑫 医药行业分析师 执业编号：S1500524120003 邮 箱：hexin1@cindasc.com 信达证券股份有限公司 CINDA SECURITIES CO.,LTD 北京市西城区宣武门西大街甲127号金隅大厦B 座 邮编：100031 [Table_Title] 全方位高增长，订单储备充足，产能持续 扩张 [Table_ReportDate] 2025 年 03 月 25 日 [Table_S 事件：2025 ummar年y]3 月 24 日，公司发布 2024 年全年业绩简报。2024 年公司 实现营业收入 40.52 亿元，同比增长 91%；实现毛利润 12.40 亿元，同比 增长 122%，对应毛利率达到 30.6%；实现净利润 10.69 亿元，同比增长 277%，对应净利率达到 26.4%；实现经 ...

Core Insights - WuXi AppTec (02268.HK) reported a significant increase in net profit for 2024, soaring by 277% to RMB 1.07 billion, with total revenue reaching RMB 4.052 billion, a year-on-year growth of 90.8% [1][2] - The company maintains its revenue growth forecast of 35% for the current year, emphasizing the need to ensure this target is met [1][4] Financial Performance - For 2024, WuXi AppTec achieved a gross profit of RMB 1.24 billion, reflecting a growth rate of 121.6% [1] - The gross margin and adjusted net profit margin improved by 4.3 percentage points and 7.3 percentage points, respectively, attributed to enhanced production efficiency and cost control [3] Market Dynamics - The demand for Antibody-Drug Conjugates (ADC) continues to drive growth, with 60% of the ADC licensing deals exceeding USD 1 billion involving WuXi AppTec's clients [1][3] - The global ADC outsourcing market reached USD 2 billion in 2023 and is projected to grow to USD 11 billion by 2030, indicating a robust demand for ADC development and production services [6] Client Base and Growth - The number of clients increased from 265 in 2022 to 499 in 2024, with 32% of revenue coming from the top 20 global pharmaceutical companies [3] - The inquiry requests for iCMC projects in North America grew by 43%, contributing to a revenue share increase from approximately 40% in 2023 to 50% in 2024 [3] Strategic Focus - The company plans to focus on four key areas: advancing existing projects, launching the DP3 production line, concentrating on iCMC projects, and submitting BLA applications to regulatory authorities [5] - Despite concerns over competition from Japanese and Korean manufacturers, the management highlighted the ongoing tightness in global ADC capacity and the high technical barriers in transitioning from PPQ to commercialization [5]

Financial Performance - The company reported a revenue of RMB 4,052.3 million for the year ending December 31, 2024, representing a 90.8% increase compared to RMB 2,123.8 million in 2023[4]. - Gross profit reached RMB 1,239.8 million, reflecting a 121.6% growth from RMB 559.6 million in the previous year[4]. - The net profit attributable to shareholders increased to RMB 1,069.6 million, a significant rise of 277.2% from RMB 283.5 million in 2023[4]. - The adjusted net profit attributable to shareholders was RMB 1,174.0 million, marking an increase of 184.8% compared to RMB 412.3 million in the prior year[4]. - Basic earnings per share increased to RMB 0.89, a 217.9% rise from RMB 0.28 in the previous year[4]. - The company's revenue increased by 90.8% to RMB 4,052.3 million[12]. - Gross profit for the same period rose by 121.6% to RMB 1,239.8 million[12]. - Net profit surged by 277.2% to RMB 1,069.6 million for the year ending December 31, 2024[12]. - Adjusted net profit increased by 184.8% to RMB 1,174.0 million for the same period[12]. - The company recorded a total comprehensive income of RMB 1,077,246,000 for the year, compared to RMB 285,809,000 in 2023, indicating an increase of about 276%[148]. Business Growth and Development - The company’s CRDMO business showed strong momentum, serving a total of 499 global clients by the end of 2024[9]. - The total number of ongoing integrated projects grew from 143 as of December 31, 2023, to 194 by December 31, 2024[12]. - The number of IND projects in progress rose from 59 to 92 during the same timeframe[12]. - The company signed 53 new integrated projects during the reporting period[12]. - The client base expanded significantly from 345 in 2023 to 499 in 2024, indicating a diversified and growing customer portfolio[52]. - The company has executed a total of 681 discovery projects since its inception, up from 427 as of December 31, 2023[15]. - The group has 160 clinical and Phase I development projects as of December 31, 2024, up from 122 projects as of December 31, 2023, reflecting an increase of 38 projects[26]. - The company has successfully assisted clients in advancing 7 ADC pipelines from preclinical to clinical stages by December 31, 2024[46]. Operational Efficiency and Capacity Expansion - The company is on track with the construction of new facilities in Wuxi and Singapore, aimed at enhancing production capacity[10]. - The new facility in Singapore is expected to commence operations by the end of 2025, featuring four production lines for clinical and commercial production[34]. - The existing facility in Wuxi has achieved a 100% delivery success rate, enhancing coordination in development and manufacturing operations[32]. - The XDP1 facility is designed to produce 3 million doses of bioconjugate drugs annually, while XDP2 and XDP3 are set to produce 5 million and 7 million doses respectively[37]. - The group is expanding its production capacity for antibody intermediates in Wuxi, China, and constructing new facilities in Singapore to meet growing demand for ADCs[29]. - The new facilities will include dual-function production lines capable of handling both monoclonal antibody intermediates and bioconjugate raw materials, enhancing production flexibility[44]. Research and Development - The company is developing innovative hydrophilic linkers and proprietary camptothecin-based payloads to improve stability and efficacy[47]. - The company aims to enhance its research and development capabilities to accelerate the introduction of new products[182]. - The company is focused on the development of effective payloads and linkers for bioconjugate drugs, which is a critical step in the production of these pharmaceuticals[184]. Market Position and Strategy - The company ranked second globally and first in China in the ADC and bioconjugate CRDMO sector based on 2022 revenue[51]. - 13 out of the top 20 global pharmaceutical companies are collaborating with the company on ADC or XDC development, accounting for approximately 32.0% of the company's total revenue in 2024[54]. - The company aims to expand its market presence through strategic partnerships and potential acquisitions in the biopharmaceutical sector[152]. - The company is exploring international sales opportunities to broaden its market reach beyond Hong Kong[182]. Environmental and Corporate Governance - The company aims to reduce Scope 1 and Scope 2 greenhouse gas emissions intensity by 50% by 2030, based on 2021 levels[59]. - The company aims to achieve an "A" rating in Wind ESG rankings by 2024, reflecting its commitment to corporate responsibility and risk management[60]. - The company has established a comprehensive corporate governance framework in line with the listing rules[181]. - The company has complied with corporate governance codes and will continue to review and enhance its practices[133]. Financial Management and Risks - The group plans to establish a series of long-term contracts to manage its currency risk and will adopt hedge accounting for derivatives to mitigate the impact of foreign exchange fluctuations on profit and loss[114]. - The group is actively monitoring and reducing its foreign currency net exposure to control the associated risks[114]. - The company has significant foreign currency monetary assets and liabilities, primarily in USD, which may affect net profit margins due to exchange rate fluctuations[114]. Employee and Talent Management - The workforce expanded to 2,041 employees, reflecting a 73.3% increase year-over-year[10]. - The company aims to enhance employee skills through effective training programs and participation in advanced projects[127]. - The company has implemented a stock option plan to incentivize employees based on their contributions[126]. Shareholder Information - The board does not recommend the payment of any final dividend for the year ending December 31, 2024[5]. - The company plans to hold its annual general meeting on June 25, 2025[131]. - The company issued 178,446,000 shares at HKD 20.60 each, raising a net amount of approximately HKD 3,936.9 million after deducting underwriting fees and other expenses[137].

Investment Rating - The report initiates coverage with a "Buy" rating for WuXi XDC [1][3][4] Core Insights - The global ADC CRDMO market is expanding, with the company benefiting from a growing order pipeline and a dual-factory strategy that enhances capacity and customer retention. The company is also entering the XDC market to create a second growth curve [3][4][5] Summary by Sections Company Overview - WuXi XDC is a leading end-to-end ADC CRDMO provider, benefiting from high industry demand and a growing order book. The projected EPS for 2024-2026 is 0.89, 1.24, and 1.66 CNY respectively, with a target price of 43.4 CNY based on a 35X PE for 2025 [4][16] Market Dynamics - The global ADC drug market is expected to grow to 64.7 billion USD by 2030, with a CAGR of 30% from 2022 to 2030. The outsourcing market for ADC and broader bioconjugates is projected to reach 11 billion USD by 2030, with a CAGR of 28% [4][40] Financial Performance - The company has shown strong revenue growth, with revenues increasing from 311 million CNY in 2021 to an estimated 2.124 billion CNY in 2023, representing a CAGR of 180.7%. The net profit is expected to grow significantly, reaching 1.067 billion CNY in 2024 [8][31] Production Capacity and Strategy - The company is implementing a dual-factory strategy to enhance global production capacity, with new facilities in Singapore expected to be operational by the end of 2025. The company has 18 clinical stage III projects and is advancing its ADC pipeline [5][19][37] Growth Opportunities - The XDC market is emerging, with significant potential in non-oncological indications. The company is strategically positioned to capitalize on this growth by leveraging its existing technology and expanding its project and client base [5][21][22]

Summary of WuXi AppTec Conference Call Company Overview - **Company**: WuXi AppTec - **Industry**: Antibody-Drug Conjugates (ADC) and Contract Development and Manufacturing Organization (CDMO) Key Performance Metrics - Revenue growth from under 100 million RMB in 2020 to over 2 billion RMB in 2023, with a projected revenue of over 3.9 billion RMB in 2024, indicating a compound annual growth rate (CAGR) of 180% [3][4] - Net profit increased from approximately 26 million RMB in 2020 to 284 million RMB in 2023, with an expected net profit exceeding 1.1 billion RMB in 2024 [3][4] Core Competencies - Significant net profit growth demonstrates strong profitability [4] - Strong core competencies include: - Coupling technology and capacity layout that shortens ADC development cycles [4] - High global ADC market growth projected to reach 64.7 billion USD in the next decade, with a CAGR exceeding 30% [4][5] - High demand for ADC outsourcing services, with a global outsourcing rate of 70% in 2022 [4][6] - Leading position in the CDMO industry, ranked second globally and first in China, with a backlog of 840 million USD as of June 30, 2024, representing a 105% year-over-year increase [4][7] Market Trends - Global ADC market growth from approximately 2 billion USD in 2018 to 7.9 billion USD in 2022, with expectations to reach 64.7 billion USD in the next decade [5] - Chinese ADC market projected to reach 66.2 billion RMB by 2030, with a CAGR of 72.8% [5] Growth Drivers - Continuous accumulation of quality clients leading to a robust order pipeline [10] - Global market expansion, including new capacity in Singapore to address client concerns [10] - Transition from ADC to bispecific antibodies (BsAb) through innovative coupling technologies [10] Challenges and Responses - Facing shareholder sell-off, biological safety legislation, and geopolitical uncertainties [11][13] - Effective responses include global layout strategies and collaborations with competitors' clients [11][13] Future Outlook - Projected revenue growth of at least 35% by 2025, with a conservative estimate based on historical performance [12][9] - Anticipated industry growth rate of 31% by 2030, with the company expected to outperform this average [9] Additional Insights - The company has a strong management team with a high retention rate of core talent [8] - Cost advantages achieved through economies of scale and centralized procurement [8]

Investment Rating - The report initiates coverage with a "Buy" rating for WuXi AppTec (02268.HK) [4] Core Viewpoints - The ADC (Antibody-Drug Conjugate) industry is experiencing rapid growth, driven by technological advancements and increased commercialization opportunities [1][27] - The company is positioned as a leading global ADC CRDMO (Contract Research, Development, and Manufacturing Organization) service provider, offering comprehensive end-to-end services that accelerate drug development [2][13] - The company's strategic focus on enhancing its service capabilities and expanding its global footprint is expected to drive sustained revenue growth [3][4] Summary by Sections Company Overview - WuXi AppTec is recognized as a global leader in the ADC CRDMO sector, providing integrated services from drug discovery to production [13] - The company has achieved significant revenue growth, with a CAGR of 180.7% from 2020 to 2023, and is expected to continue this trend [18] ADC Industry Insights - The ADC market has seen substantial growth, with the global market size increasing from $2 billion in 2018 to $10.4 billion in 2023, reflecting a CAGR of 39.1% [27] - The report highlights the increasing number of ADC candidates entering clinical trials, indicating a robust pipeline and future growth potential [31] Business Strategy and Growth - The company employs an "Enable-Follow-Win" strategy to foster innovation and expand client relationships, resulting in a diversified customer base with nearly 70% of revenue coming from North America and Europe [3] - The establishment of new production facilities, including a factory in Singapore expected to be operational by late 2025, will enhance the company's clinical trial and commercialization capabilities [2][4] Financial Projections - The company forecasts significant profit growth, with net profits projected to reach 1.03 billion yuan in 2024, 1.48 billion yuan in 2025, and 1.91 billion yuan in 2026, representing growth rates of 264%, 43%, and 29% respectively [4][5] - Revenue is expected to grow from 2.12 billion yuan in 2023 to 5.57 billion yuan in 2025, indicating a strong upward trajectory [5]

Investment Rating - The report initiates coverage with a "Buy" rating for WuXi AppTec (02268.HK) [4][6] Core Viewpoints - The ADC (Antibody-Drug Conjugate) industry is experiencing rapid growth, driven by technological advancements and increased commercialization opportunities, indicating a robust future market potential [1][27] - The company is positioned as a leading global ADC CRDMO (Contract Research, Development, and Manufacturing Organization) service provider, offering comprehensive end-to-end services that enhance drug development efficiency [2][3] - The company's strategic focus on technology collaboration and customer engagement is expected to drive significant growth in client base and market share [3][4] Summary by Sections Company Overview - WuXi AppTec is recognized as a global leader in the ADC CRDMO sector, providing integrated services from drug discovery to production, with a significant market share increase from 1.8% in 2020 to 9.8% in 2022 [13][14] - The management team is experienced, with a diverse background in the biopharmaceutical industry, contributing to the company's growth and operational success [16][19] Market Dynamics - The ADC market has shown explosive growth, with a projected compound annual growth rate (CAGR) of 39.1% from 2018 to 2023, expected to reach $66.2 billion by 2030 [27][31] - The report highlights the increasing number of ADC candidates entering clinical trials, indicating a vibrant pipeline and strong future demand for ADC products [31][32] Financial Performance - The company has demonstrated strong financial growth, with revenues increasing from 0.96 billion in 2020 to 21.24 billion in 2023, reflecting a CAGR of 180.7% [18][20] - Profitability metrics are improving, with gross margins rising from 8.4% in 2020 to 36.5% in 2021, driven by strong customer demand and enhanced production efficiency [21][22] Future Outlook - The company is expected to benefit from the ongoing demand for bioconjugate drugs, with projections for net profits to reach 1.03 billion in 2024, growing to 1.91 billion by 2026 [4][5] - The strategic expansion of production facilities and service capabilities is anticipated to further enhance the company's competitive position in the global market [2][4]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company is expected to achieve revenue and profit growth exceeding 85% and 260% respectively in 2024, driven by the strong development of the ADC industry and the company's leading position in the global ADC outsourcing market [2][3] - The company has a robust project pipeline with 681 drug discovery projects and 92 overall projects, indicating strong future revenue contributions from commercialized projects [3] - The global ADC market is projected to grow from $13.2 billion in 2024 to $66.2 billion by 2030, with the company expected to maintain a growth rate exceeding the industry average [3] Financial Summary - Total revenue is projected to grow from 2,124 million RMB in 2023 to 7,273 million RMB in 2026, reflecting a compound annual growth rate (CAGR) of 85.1% [3] - Net profit is expected to increase from 284 million RMB in 2023 to 2,054 million RMB in 2026, with a CAGR of 28.2% [3] - The gross margin is anticipated to improve from 26.3% in 2023 to 37.5% in 2026, indicating enhanced operational efficiency [3] Market Position and Strategy - The company has established a comprehensive production layout in Wuxi, enhancing its capacity to meet growing demand in the ADC sector [3] - The company has successfully commercialized one project and has eight ongoing PPQ projects, which are expected to contribute significantly to future revenues [3] - The company aims to enhance its global capacity with new production lines in Singapore expected to be operational by the end of 2025 [3]