Financial Performance - In 2024, the company's revenue reached RMB 39,241.4 million, a decrease of 2.7% compared to RMB 40,340.8 million in 2023[12] - The net profit attributable to the parent company was RMB 9,352.6 million, down 12.5% from RMB 10,690.2 million in the previous year[12] - The company achieved operating revenue of RMB 39,241.4 million, a decrease of 2.7% year-on-year, with net profit attributable to shareholders at RMB 9,352.6 million, down 12.5%[14] - The adjusted net profit attributable to the parent company for the year ended December 31, 2024, was RMB 10,582.5 million, slightly down from RMB 10,854.6 million in 2023, with an adjusted gross profit of RMB 16,326.3 million, down from RMB 16,937.8 million, resulting in an adjusted gross margin of 41.6%[39] - The gross profit for 2023 was RMB 16,372,472 thousand, with a gross margin of 40.6%, up from 36.9% in 2022[97] Assets and Liabilities - The total assets increased to RMB 80,325.8 million, up from RMB 73,669.3 million in 2023, reflecting a growth of 9.0%[13] - The total liabilities increased to RMB 21,240.2 million, up from RMB 18,151.9 million in 2023[13] - Total liabilities rose to RMB 21,240.2 million as of December 31, 2024, from RMB 18,151.9 million in 2023, with a debt-to-asset ratio of 26.4%[33] - The company reported a decrease in goodwill to RMB 972.4 million as of December 31, 2024, down 46.6% from RMB 1,820.9 million in 2023, primarily due to reclassification to assets held for sale[40] Cash Flow and Financial Position - The company reported a cash and cash equivalents balance of RMB 13,434.3 million, significantly higher than RMB 10,001.0 million in the previous year[13] - Cash generated from operating activities was RMB 11,986.8 million, a decrease of 5.2% year-on-year, but excluding COVID-19 commercialization projects, it increased by RMB 2,100 million, or 22.1%[31] - The company reported a free cash flow of RMB 7,983.3 million for the year ended December 31, 2024, compared to RMB 7,124.7 million in 2023[31] - The company experienced a significant increase in tax receivables, which rose to RMB 87.2 million as of December 31, 2024, compared to RMB 17.5 million in 2023, marking a 397.4% increase[40] Business Growth and Market Position - The company achieved a record high of RMB 49.31 billion in backlog orders, representing a 47.0% year-on-year increase[9] - The company expects a revenue growth of 10-15% for its continuing operations in 2025[9] - The company anticipates a return to double-digit growth in continuing operations revenue in 2025, projecting a year-on-year increase of 10% to 15%[19] - Revenue from the top 20 global pharmaceutical companies reached RMB 16.64 billion, with a year-on-year growth of 24.1% excluding COVID-19 commercialization projects[14] - The chemical business generated revenue of RMB 29,052.4 million, with a year-on-year growth of 11.2% when excluding COVID-19 projects[16] Operational Efficiency and Strategic Initiatives - The company aims to enhance operational efficiency and expand globally to meet increasing customer innovation demands[9] - The company plans to enhance its production capacity, with the total volume of small molecule API reactors expected to exceed 4,000 kL by the end of 2025[58] - The company has doubled its oral formulation capacity at its Swiss facility during 2024[58] - The company is expanding its capabilities in various innovative technologies, including continuous flow purification and new drug formulation techniques[54] - The company aims to strengthen its global capabilities and scale to better empower pharmaceutical innovation[54] Governance and Management - The board consists of 12 members, including 5 executive directors, 2 non-executive directors, and 5 independent non-executive directors[101] - The company has a strong governance structure with a diverse board of directors and experienced management team, ensuring effective oversight and strategic direction[132] - The company has established a comprehensive internal control system to ensure compliance with laws and regulations, although risks remain due to the number of subsidiaries[88] - The company is committed to ensuring that the compensation for non-independent directors and senior management aligns with contractual terms and is fair and reasonable[181] - The company has received annual written confirmations of independence from all independent non-executive directors, affirming their status as independent individuals[150] Risks and Challenges - The company faces risks from potential declines in demand for pharmaceutical R&D services due to market trends or budget adjustments by clients[85] - Regulatory changes in the pharmaceutical R&D services industry may pose risks if the company cannot adapt its strategies accordingly[86] - The company faces intensified competition in the pharmaceutical R&D services market, particularly from large international pharmaceutical companies and new market entrants[87] Shareholder Returns and Incentives - A cash dividend of RMB 9.8974 per 10 shares was approved for distribution to shareholders listed on the register as of June 25, 2024[65] - The company decided to terminate the 2023 H-share incentive trust plan and plans to repurchase and cancel 15,467,500 H-shares[67] - The 2024 H-share incentive trust plan was approved, with a total of HKD 1 billion used to purchase 27,478,428 H-shares, accounting for approximately 0.94% of the total issued share capital[68]

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 90 and RMB 93, indicating a potential upside of +38% and +45% respectively [3][5][9]. Core Insights - The acceleration in new order signings, along with an additional special dividend and A-share buyback, are the major positive surprises that have driven the company's stock price up [3][8]. - For 2024, the company achieved a revenue of RMB 39.24 billion, a decrease of 2.7% YoY, but a growth of 5.2% YoY when excluding COVID-19 commercialization projects [8][10]. - The company reported a Non-IFRS adjusted net profit of RMB 10.58 billion for 2024, down 2.5% YoY, with a net profit margin of 27% [8][10]. Revenue and Growth Drivers - The small molecule D&M revenue and TIDES business remain the main drivers of revenue growth, with TIDES revenue growing by 67.9% YoY and small molecule D&M revenue increasing by 16.1% YoY [3][8]. - The company expects TIDES business to maintain over 60% YoY revenue growth in 2025, with total revenue projected to reach RMB 41.5-43 billion, representing a 10%-15% YoY increase [8][9]. Financial Performance - In Q4 2024, the company achieved a revenue of RMB 11.54 billion, a 6.9% increase YoY, and a Non-IFRS adjusted net profit of RMB 3.24 billion, up 20.4% YoY [10][12]. - The company ended 2024 with a backlog of orders amounting to RMB 49.31 billion, a 47% increase YoY, indicating strong execution and international competitiveness [8][10]. Shareholder Returns - The company plans to distribute an additional special dividend of RMB 1 billion and conduct a RMB 1 billion A-share buyback in 2025, which is expected to positively impact stock performance [8][9]. - The management also announced a H-share incentive trust plan for 2025, with an allocation of HKD 1.5-2.5 billion, depending on revenue targets [8][9].

Financial Performance - For the fiscal year ending December 31, 2024, the company reported a revenue of RMB 39,241.4 million, a decrease of 2.7% compared to RMB 40,340.8 million in 2023[2]. - The net profit attributable to the parent company was RMB 9,352.6 million, down 12.5% from RMB 10,690.2 million in the previous year[2]. - Gross profit for the reporting period was RMB 16,016.1 million, a decrease of 2.2% year-on-year, with a gross margin of 40.8%[17]. - The adjusted net profit attributable to the parent company for the year ended December 31, 2024, was RMB 9,352.6 million, a decrease of 12.5% from RMB 10,690.2 million in 2023[41]. - The adjusted gross profit for the year ended December 31, 2024, was RMB 16,326.3 million, down 3.6% from RMB 16,937.8 million in 2023, with a gross margin of 41.6% compared to 42.0% in the previous year[41]. - The company reported a total comprehensive income of RMB 9,654,674 thousand for the year, down from RMB 10,884,792 thousand in the previous year[139]. - Basic earnings per share for the year was RMB 3.88, compared to RMB 3.83 for the previous year, indicating a marginal increase[137]. Customer and Market Insights - The company had approximately 6,000 active customers by the end of 2024, with 5,500 in continuing operations and 1,000 new customers added during the year[7]. - Revenue from the top 20 global pharmaceutical companies amounted to RMB 16.64 billion, with a year-on-year growth of 24.1% excluding COVID-19 commercialization projects[7]. - Revenue from U.S. customers was RMB 25.02 billion, a 7.7% increase excluding COVID-19 commercialization projects, while revenue from European customers grew by 14.4% to RMB 5.23 billion[7]. - The company has approximately 6,000 active clients as of the end of 2024, covering all of the top 20 global pharmaceutical companies[67]. Business Segments Performance - The company’s revenue from its chemistry business was RMB 29,052.4 million, a slight decrease of 0.4% from RMB 29,171.5 million in 2023[10]. - The testing business achieved revenue of RMB 56.7 billion, with TIDES business revenue reaching RMB 58.0 billion, a year-on-year increase of 70.1%[13]. - Clinical CRO and SMO business revenue was RMB 18.1 billion, a year-on-year increase of 2.8%, with SMO business growing by 15.4%[13]. - WuXi Biology generated revenue of RMB 25.4 billion, remaining stable year-on-year, with expectations for a 10%-15% growth in 2025[14]. Cash Flow and Investments - For the fiscal year ending December 31, 2024, the net cash generated from operating activities was RMB 11,986.8 million, a decrease of 5.2% compared to RMB 12,641.2 million for the fiscal year ending December 31, 2023[29]. - The net cash used in investing activities for the fiscal year ending December 31, 2024, was RMB (5,098.0) million, a decrease of 25.2% from RMB (6,817.0) million in the previous year, primarily due to timing differences in capital expenditures[29]. - The company made additional investments of RMB 12.2 million in joint ventures and associates during the reporting period to enhance synergies and expand its customer base[48]. - New investments outside of joint ventures and associates totaled RMB 372.1 million, with significant changes in the fair value of investments reported[50]. Dividends and Shareholder Returns - The company plans to distribute a final dividend of RMB 9.8169 per 10 shares, totaling RMB 2,835,113,437.82[3]. - A special dividend of RMB 3.5000 per 10 shares is proposed for 2025, amounting to RMB 1,010,797,403.70[4]. - The proposed cash dividend for 2024 is RMB 9.8169 per 10 shares, compared to RMB 9.8974 per 10 shares in 2023, indicating a slight decrease in the dividend payout[173]. Financial Position and Liabilities - As of December 31, 2024, total liabilities amounted to RMB 21,240.2 million, an increase from RMB 18,151.9 million as of December 31, 2023, with a debt-to-asset ratio of 26.4% compared to 24.6% in the previous year[32]. - The company reported a significant reduction in current bank borrowings, which decreased by 65.6% to RMB 1,278.6 million in 2024 from RMB 3,721.6 million in 2023[45]. - The total amount of liabilities related to derivative financial instruments decreased by 59.7% to RMB 202.0 million in 2024 from RMB 501.9 million in 2023[45]. Strategic Initiatives and Future Outlook - The company aims to enhance its capabilities and scale globally to empower pharmaceutical innovation[63]. - The company is focused on attracting and retaining top talent by reforming its reward and incentive systems, providing real promotion opportunities, and offering competitive compensation packages[97]. - The company will continue to invest heavily in new drug development technologies, focusing on various new molecular types such as peptides, oligonucleotides, PROTACs, and conjugated drugs[95]. - The overall revenue forecast for 2025 is projected to be between RMB 415 billion and RMB 430 billion[14]. Risks and Challenges - The company faces risks from a potential decline in demand for pharmaceutical R&D services, which could negatively impact its business if industry growth slows or outsourcing ratios decrease[101]. - The company is exposed to regulatory risks due to the highly regulated nature of the pharmaceutical R&D services industry, requiring timely adjustments to its business strategies[102]. - The company acknowledges the increasing competition in the global pharmaceutical R&D services market, which may weaken its competitive advantages if not addressed[104].

Investment Rating - The report maintains a "Neutral" rating for WuXi AppTec (2359 HK) with a target price raised to HKD 48.00 [3][11]. Core Insights - WuXi AppTec's revenue for the first three quarters of 2024 decreased by 6.2% year-on-year to RMB 27.70 billion, but excluding COVID-19 project revenue, it increased by 4.6% [1]. - The company's net profit attributable to shareholders fell by 19.1% year-on-year to RMB 6.53 billion, with Non-IFRS adjusted net profit down 10.1% to RMB 6.68 billion, although the decline was less severe than in the first half of the year [1]. - The chemical business showed signs of recovery in the third quarter, leading to slightly better-than-expected performance [1]. - The TIDES business revenue surged by 71.0% year-on-year in the first three quarters, driven by increased demand for weight-loss drug development [1]. Financial Summary - Total revenue for 2022 was RMB 39.36 billion, with a projected revenue of RMB 40.13 billion for 2024, and expected growth to RMB 49.35 billion by 2026 [2][8]. - Shareholder net profit for 2022 was RMB 8.81 billion, with a forecast of RMB 9.98 billion for 2024 and RMB 11.94 billion for 2026 [2][8]. - The company’s earnings per share (EPS) is projected to be RMB 3.43 in 2024, increasing to RMB 4.11 by 2026 [2][8]. Revenue Forecasts - The revenue forecast for the chemical business in 2024 has been raised to RMB 29.17 billion, with expectations of double-digit growth in 2025-2026 [1]. - TIDES business revenue is expected to grow by 60% year-on-year to RMB 5.21 billion in 2024, with further increases projected for 2025 and 2026 [1]. Market and Legislative Environment - The U.S. Biologics Bill is unlikely to be legislated within the year, but uncertainties remain as both the House and Senate versions have passed [1].

Financial Performance - The company reported a revenue of RMB 17,240.9 million for the first half of 2024, a decrease of 8.6% compared to RMB 18,871.3 million in the same period of 2023[10]. - Gross profit for the period was RMB 6,700.9 million, down 11.3% from RMB 7,555.7 million year-on-year, resulting in a gross margin of 38.9%[10]. - Net profit attributable to the parent company was RMB 4,239.8 million, reflecting a 20.2% decline from RMB 5,313.1 million in the previous year[10]. - Total revenue for the first half of 2024 was RMB 17,240.9 million, a decrease of 8.6% compared to RMB 18,871.3 million in the same period of 2023[12]. - WuXi Chemistry reported revenue of RMB 12,209.9 million, down 9.3% year-over-year, with a 2.1% increase excluding COVID-19 commercialization projects[13]. - WuXi Testing generated revenue of RMB 3,018.4 million, a decline of 2.4% year-over-year, with laboratory analysis and testing services down 5.4%[15]. - WuXi Biology achieved revenue of RMB 1,168.9 million, a decrease of 5.2% year-over-year, but new molecular-related business grew by 8.1%[16]. - WuXi ATU's revenue was RMB 575 million, down 19.4% year-over-year, primarily due to early-stage commercialization projects and order delays[17]. - Net profit decreased from RMB 5,356.9 million for the six months ended June 30, 2023, to RMB 4,280.8 million for the six months ended June 30, 2024, a year-on-year decrease of 20.1%[22]. - The company reported a total comprehensive income of RMB 4,295,580 thousand, compared to RMB 4,843,228 thousand for the same period last year, indicating a decrease of 11.34%[170]. Customer Base and Market Position - The company maintained a customer base of over 6,000 and added more than 500 new clients during the reporting period[11]. - Revenue from the top 20 global pharmaceutical companies reached RMB 6.59 billion, with an 11.9% increase when excluding COVID-19 projects[11]. - Revenue from U.S. clients was RMB 10.71 billion, a decrease of 1.2% year-on-year when excluding COVID-19 projects[11]. - Revenue from European clients increased by 5.3% to RMB 2.22 billion, while revenue from Chinese clients grew by 2.8% to RMB 3.40 billion[11]. - The company has a global leading "integrated, end-to-end" new drug development service platform, benefiting from the rapid growth of the global drug development outsourcing market[45]. - The company has a large and loyal customer base, covering all of the top 20 global pharmaceutical companies, contributing to a steady increase in both new and existing customers[49]. Financial Position and Assets - Total assets as of June 30, 2024, were RMB 74,397.3 million, a 1.0% increase from RMB 73,669.3 million at the end of 2023[10]. - The company's debt-to-asset ratio increased to 25.9% from 24.6% in the previous period[10]. - Total liabilities as of June 30, 2024, were RMB 19,302.6 million, up from RMB 18,151.9 million as of December 31, 2023, with a debt-to-asset ratio of 25.9%[26]. - The company had total bank borrowings of RMB 5,811.6 million, with RMB 2,919.3 million due within one year[27]. - The company's total assets as of June 30, 2024, included RMB 4,971.0 million in fixed deposits, representing a 32.2% increase from RMB 3,761.4 million at the end of 2023[35]. - The total assets as of June 30, 2024, were RMB 55,094,761 thousand, showing a strong asset base for future growth[176]. Cash Flow and Investments - Net cash generated from operating activities was RMB 4,738.8 million, a decrease of 11.3% compared to the same period in 2023, primarily due to increased payments for production preparations[23]. - Net cash used in investing activities increased by 33.5% to RMB 1,745.9 million, mainly due to increased investments in short-term deposits[24]. - Net cash used in financing activities increased by 32.5% to RMB 3,463.1 million, primarily due to increased payments for A-share repurchases[25]. - The company reported a significant increase in cash received from the sale of financial assets, totaling RMB 2,143,349 thousand, compared to RMB 556,086 thousand in the previous year, representing a growth of 285.5%[177]. - The net cash used in financing activities for the six months ended June 30, 2024, was RMB (2,526,288) thousand, compared to RMB (2,649,084) thousand for the same period in 2023[178]. Research and Development - Research and development expenses for the period were RMB 636,309 thousand, slightly reduced from RMB 667,045 thousand in the previous year[170]. - The company continues to enhance its capabilities in drug formulation, expanding from oral formulations to sterile injectable formulations[46]. - The company is developing multiple new drug candidates and innovative technologies in the fields of peptide drugs, oligonucleotides, and precision medicine[46]. - The company has established a comprehensive high-potency drug research and production capability, providing end-to-end services from active pharmaceutical ingredients to formulations[46]. Shareholder and Incentive Plans - The company approved a cash dividend of RMB 9.8974 per 10 shares for shareholders listed on June 25, 2024[53]. - The company plans to terminate the 2023 H-share incentive trust plan and intends to repurchase and cancel 15,467,500 H-shares[55]. - The company has adopted the 2024 H-share incentive trust plan, approved at the 2023 annual general meeting on June 12, 2024[56]. - The company has implemented various employee incentive plans since 2015 to attract and retain skilled personnel for future development and expansion[110]. - The company’s stock option plans are designed to align employee interests with company performance and shareholder value[109]. Regulatory and Compliance - The company maintained compliance with relevant laws and regulations during the reporting period[164]. - The pharmaceutical R&D services industry is highly regulated, and changes in regulations could adversely affect the company's operations if it fails to adapt its business strategy accordingly[68]. - The company emphasizes compliance and has established internal control systems; however, insufficient oversight of subsidiaries could lead to operational challenges[70]. Market Outlook and Strategy - The company expects 2024 revenue to reach RMB 38.3 billion to RMB 40.5 billion, with a projected growth rate of 2.7% to 8.6% excluding COVID-19 projects[18]. - The global pharmaceutical R&D production service industry is expected to maintain rapid growth, driven by increasing outsourcing by large pharmaceutical companies and rising demand from small and medium-sized pharmaceutical companies[57]. - The company plans to continue expanding its market presence and investing in new product development, focusing on innovative drug research and development[176].

Financial Performance - The company reported a revenue of RMB 17,240.9 million for the six months ended June 30, 2024, representing a decrease of 8.6% compared to RMB 18,871.3 million in the same period of 2023[2]. - Gross profit for the same period was RMB 6,700.9 million, down 11.3% from RMB 7,555.7 million, resulting in a gross margin of 38.9%[2]. - Net profit attributable to shareholders was RMB 4,239.8 million, a decline of 20.2% from RMB 5,313.1 million, with a net profit margin of 24.6%[2]. - Operating profit decreased to RMB 5,066,848 thousand, a decline of 22.83% from RMB 6,565,058 thousand in the previous year[87]. - The net profit for the period was RMB 4,280,846 thousand, down 20.06% from RMB 5,356,896 thousand in 2023[87]. - Adjusted EBITDA for the six months ended June 30, 2024, was RMB 6,734.9 million, a decrease from RMB 7,458.1 million for the same period in 2023, reflecting a margin of 39.1% compared to 39.5%[25]. - The company reported a pre-tax profit of RMB 5,049.6 million for the six months ended June 30, 2024, down from RMB 6,395.2 million in the same period of 2023[25]. - The total comprehensive income for the period was RMB 4,295,580 thousand, a decrease from RMB 4,843,228 thousand in 2023[88]. Revenue Breakdown - Revenue from the top 20 global pharmaceutical companies amounted to RMB 6,590 million, with an 11.9% increase when excluding COVID-19 commercialization projects[5]. - The WuXi Chemistry segment generated revenue of RMB 12,209.9 million, a decrease of 9.3% from RMB 13,467.2 million[6]. - The WuXi Testing segment reported revenue of RMB 3,018.4 million, down 2.4% from RMB 3,091.0 million[6]. - The WuXi Biology segment generated revenue of RMB 1,168.9 million, a decrease of 5.2% from RMB 1,232.6 million[6]. - Revenue from the high-end CTDMO business was RMB 570 million, which fell short of expectations due to early-stage commercialization, project delays, and insufficient new orders[10]. - Revenue from WuXi Testing was RMB 3,018,356 thousand, slightly down from RMB 3,091,000 thousand, a decrease of 2.36%[101]. - Revenue from WuXi Biology was RMB 1,168,910 thousand, down from RMB 1,232,635 thousand, reflecting a decline of 5.19%[101]. - Revenue from the United States was RMB 10,711,857 thousand, down from RMB 12,355,501 thousand, indicating a decline of 13.29%[98]. Customer Base and Market Position - The company maintained a customer base of over 6,000 and added more than 500 new clients, with total orders on hand reaching RMB 43.1 billion, a year-on-year increase of 33.2% excluding COVID-19 commercialization projects[5]. - The company has a large, loyal, and expanding customer base, covering all of the top 20 global pharmaceutical companies, with a steady increase in both new and existing customers[44]. - The company is actively involved in the development of new technologies, including PROTAC (targeted protein degradation technology)[125]. Financial Health and Liabilities - Total liabilities as of June 30, 2024, were RMB 19,302.6 million, an increase from RMB 18,151.9 million as of December 31, 2023[19]. - The company’s asset-liability ratio increased to 25.9% as of June 30, 2024, compared to 24.6% as of December 31, 2023, due to increased bank borrowings[22]. - The company reported a significant increase in inventory, rising to RMB 3,291,610 thousand from RMB 2,886,094 thousand, which is an increase of about 14.06%[89]. - The company's equity attributable to shareholders decreased to RMB 54,713,937 thousand from RMB 55,122,454 thousand, a decline of approximately 0.74%[90]. - The company’s total liabilities related to derivative financial instruments amounted to RMB 659,741 thousand as of June 30, 2024, compared to RMB 501,871 thousand as of December 31, 2023, indicating an increase of approximately 31.39%[117]. Investments and Acquisitions - The fair value of the company's investment in Genesis Medtech Group Limited is RMB 1,642.5 million, accounting for 2.2% of total assets[33]. - The total investment in joint ventures and associates during the reporting period amounted to RMB 12.2 million, aimed at enhancing synergies and expanding the customer base[30]. - The company has established a joint venture to promote the development of the healthcare ecosystem, focusing on strategic long-term investments and cutting-edge technologies[30]. - The company is expanding its market presence through strategic partnerships and acquisitions in the pharmaceutical sector[126]. Operational Developments - The company is preparing for BLA submissions for a commercial CAR-T product, expected to be filed with the FDA in the second half of 2024[10]. - The company has enhanced its service capabilities in areas such as flow chemistry, enzyme catalysis, and crystallization, expanding its formulation platform from oral to sterile injectable formulations[40]. - The total volume of peptide solid-phase synthesis reactors will increase to 32,000L by January 2024, with a new R&D and production base in Singapore commencing construction in May 2024[42]. - The company aims to strengthen its ability to provide integrated, end-to-end drug development and production services in response to the increasing demand for high-quality capabilities in the pharmaceutical and life sciences sectors[43]. Risk Factors - The company faces risks from a potential decline in demand for pharmaceutical research services, which could negatively impact business if industry trends slow down or outsourcing ratios decrease[63]. - Regulatory changes in the pharmaceutical research services industry pose a risk, as the company must adapt its strategies to comply with evolving policies and regulations[64]. - Increased competition in the global pharmaceutical research services market is a concern, with the company needing to strengthen its research and commercial advantages to maintain its competitive edge[66]. - The company faces risks related to the loss of core technical personnel, which is crucial for maintaining its competitive edge and operational stability[70]. Corporate Governance and Compliance - The board confirmed compliance with corporate governance codes, although there was a deviation regarding the separation of the roles of Chairman and CEO[81]. - The company emphasizes compliance and has established a robust internal control system, but faces risks if oversight of its subsidiaries is insufficient, potentially affecting necessary qualifications and approvals[67]. - The company is actively communicating with U.S. legislative parties to clarify facts and advocate for amendments to the proposed "Biological Safety Act" which has undergone revisions[69]. Employee and Talent Management - As of June 30, 2024, the group employed 38,134 employees, with compensation including base salary, allowances, bonuses, stock options, and other benefits[75]. - The company plans to attract, train, and retain top talent through a results-oriented performance evaluation system, providing competitive compensation and clear promotion opportunities[60]. Shareholder Returns and Dividends - The company did not declare any interim dividend for the six months ended June 30, 2024[2]. - The 2023 profit distribution plan was approved, with a cash dividend of RMB 9.8974 per 10 shares to shareholders listed on June 25, 2024[49]. - The total dividend declared for 2023 was RMB 2,882,050,829.90, an increase from RMB 2,649,083,545.14 in 2022, reflecting a growth of 8.8%[109].

Financial Performance - The company's operating revenue for Q1 2024 was approximately RMB 7.98 billion, representing a decrease of 10.95% compared to the same period last year[6]. - Net profit attributable to shareholders for Q1 2024 was approximately RMB 1.94 billion, a decrease of 10.42% year-on-year, while the net profit after deducting non-recurring items was approximately RMB 2.03 billion, an increase of 7.30%[6]. - The net cash flow from operating activities for Q1 2024 was approximately RMB 2.26 billion, down 25.44% year-on-year, with basic earnings per share at RMB 0.67, a decrease of 9.46%[6]. - Total revenue for Q1 2024 was approximately ¥7.98 billion, a decrease of 11.0% compared to ¥8.96 billion in Q1 2023[23]. - Operating profit for Q1 2024 was approximately ¥2.31 billion, down from ¥2.62 billion in Q1 2023, reflecting a decline of 11.7%[23]. - Total comprehensive income for Q1 2024 was RMB 1,745,132 thousand, a decrease from RMB 2,167,889 thousand in Q1 2023, representing a decline of approximately 19.4%[30]. - The adjusted profit attributable to the parent company for Q1 2024 is RMB 1,942,211 thousand, a decrease from RMB 2,168,129 thousand in Q1 2023, representing a decline of approximately 10.4%[35]. - The non-IFRS profit attributable to the parent company for Q1 2024 is RMB 2,057,967 thousand, down from RMB 2,472,807 thousand in Q1 2023, indicating a decrease of about 16.8%[35]. Assets and Liabilities - Total assets as of March 31, 2024, were approximately RMB 74.94 billion, an increase of 1.72% from the end of the previous year[6]. - Total liabilities as of March 31, 2024, amounted to approximately ¥18.89 billion, an increase of 4.1% from ¥18.15 billion as of December 31, 2023[22]. - Non-current liabilities increased significantly to approximately ¥5.50 billion in Q1 2024, compared to ¥3.40 billion in Q4 2023, marking a rise of 62.0%[22]. - The total current liabilities decreased to approximately ¥13.39 billion as of March 31, 2024, down 9.3% from ¥14.76 billion at the end of 2023[22]. - The total equity attributable to shareholders was approximately ¥55.64 billion as of March 31, 2024, up from ¥55.12 billion at the end of 2023, representing an increase of 0.9%[22]. - The total equity attributable to shareholders of the parent company increased to RMB 55,639,488 thousand from RMB 55,122,454 thousand, an increase of approximately 0.9%[32]. Revenue Breakdown - The chemical business generated revenue of RMB 5.56 billion, a year-on-year decline of 0.6% after excluding COVID-19 commercialization projects[11]. - Revenue from the top 20 global pharmaceutical companies reached RMB 2.70 billion, showing a year-on-year growth of 4.2% after excluding COVID-19 commercialization projects[10]. - The TIDES business (mainly oligonucleotides and peptides) achieved revenue of RMB 780 million, reflecting a strong year-on-year growth of 43.1%[11]. - The company’s revenue from U.S. clients was RMB 4.90 billion, with a year-on-year increase of 0.4% after excluding COVID-19 commercialization projects[10]. - The company’s revenue from the biological business was RMB 560 million, with a year-on-year growth of 12.2% in new molecular-related income[12]. - The high-end therapeutic CTDMO business generated revenue of RMB 280 million, with ongoing projects including CAR-T product preparations for FDA submission in the second half of 2024[13]. - The company’s revenue from clinical CRO and SMO services was RMB 440 million, with SMO business growing by 26.4% year-on-year[12]. Research and Development - The company continues to enhance its CRDMO and CTDMO business models to improve R&D efficiency and provide integrated services from drug discovery to production[5]. - Research and development expenses for Q1 2024 were approximately ¥306.40 million, down 14.2% from ¥357.30 million in Q1 2023[23]. - The company is currently working on 17 new molecular projects, with six projects having entered the clinical stage[15]. - The domestic new drug development service department achieved revenue of RMB 80 million, with three new drugs approved for clients, including two for COVID-19 and one for cancer treatment[14]. - As of the end of Q1 2024, the company has completed IND applications for 196 projects and obtained 175 clinical trial approvals, including three projects that have been approved for market launch[14]. - The company has ongoing projects in various disease areas, with a focus on expanding its portfolio of new drugs[14]. - The company has two additional drugs in the market application stage, indicating a robust pipeline for future revenue[14]. Cash Flow and Liquidity - The company’s cash and cash equivalents increased to RMB 15.73 billion from RMB 13.76 billion, reflecting improved liquidity[21]. - The company reported a net cash outflow from operating activities of RMB (734,554) thousand in Q1 2024, compared to RMB (1,144,916) thousand in Q1 2023, showing an improvement in cash flow management[33]. - The net cash flow from financing activities for Q1 2024 was approximately -¥43.29 million, a significant decline compared to a positive cash flow of ¥148.9 million in Q1 2023[28]. - The company raised new bank loans amounting to RMB 2,920,641 thousand in Q1 2024, compared to RMB 2,503,563 thousand in Q1 2023, reflecting an increase of approximately 16.7%[34]. - The company’s cash and cash equivalents at the end of Q1 2024 amounted to approximately ¥11.52 billion, an increase from ¥9.87 billion at the end of Q1 2023[28]. - The company’s total cash inflow from financing activities in Q1 2024 was approximately ¥2.93 billion, compared to ¥2.51 billion in Q1 2023, showing an increase of 16.9%[28]. Market Position and Strategy - The company operates globally with bases in Asia, Europe, and North America, ensuring compliance with the highest international quality regulatory standards[5]. - The company emphasizes the importance of optimizing cross-sector business synergies to better serve global clients[5]. - The company is committed to maintaining a strong reputation in the global pharmaceutical R&D industry through excellent service records and robust intellectual property protection[5]. - The company is actively pursuing market expansion and new product development strategies to enhance its competitive position[14].

Financial Performance - The company's revenue for the year reached RMB 40,340.8 million, an increase from RMB 39,354.8 million in the previous year, representing a growth of 2.5%[12] - Adjusted net profit attributable to the parent company was RMB 10,854.6 million, up from RMB 9,399.3 million, reflecting a growth of 15.5%[12] - Gross profit margin improved to 40.6%, compared to 36.9% in the previous year, indicating enhanced profitability[12] - The total assets of the company increased to RMB 73,669.3 million from RMB 64,690.3 million, marking a growth of 13.7%[12] - The company achieved a net profit margin of 26.5%, up from 22.4% in the previous year, showcasing improved operational efficiency[12] - Basic earnings per share rose to RMB 3.64 from RMB 3.01, reflecting a growth of 21%[12] - The company achieved a revenue of RMB 40,340.8 million, representing a year-on-year growth of 2.5%, and a net profit attributable to shareholders of RMB 10,690.2 million, up 21.3% year-on-year[14] - Gross profit for 2023 was RMB 16.37 billion, an increase of 12.9% compared to 2022, with a gross margin of 40.6%[27] - Operating profit increased to RMB 13,190,743 thousand in 2023, with an operating margin of 32.7%, compared to 27.5% in 2022[114] - Net profit attributable to shareholders for 2023 was RMB 10,690,153 thousand, reflecting a net profit margin of 26.5%, up from 22.4% in 2022[114] Customer Engagement and Market Expansion - The company added over 1,200 new customers in 2023, with active customers exceeding 6,000, and the order backlog, excluding COVID-19 commercialization projects, grew by 18% year-on-year[15] - Revenue from U.S. customers reached RMB 26.13 billion, a 42% increase year-on-year when excluding COVID-19 projects; revenue from European customers was RMB 4.70 billion, up 12%[15] - The company’s revenue from the top 20 global pharmaceutical companies reached RMB 16.11 billion, a 44% increase year-on-year when excluding COVID-19 projects[15] - The company’s revenue from existing customers accounted for 98% of total revenue, amounting to RMB 39.63 billion, with a 30% increase year-on-year when excluding COVID-19 projects[15] - The company is focused on developing new drug types such as peptides, oligonucleotides, and PROTACs to capture emerging business opportunities[66] Operational Efficiency and Capacity Expansion - The company completed capacity expansion projects in Changzhou and Taixing, with new capacity operational in January 2024, increasing the volume of peptide solid-phase synthesis reactors to 32,000L[18] - The company is expanding its capacity with new facilities totaling 55,000 square meters in Suzhou and Qidong, enhancing operational efficiency[68] - The new raw material drug production base in Taixing officially commenced partial operations in January 2024, supporting ongoing business growth[68] Financial Management and Investments - The debt-to-asset ratio decreased to 24.6% from 27.5%, indicating a stronger financial position[12] - The net cash used in investing activities for 2023 was RMB 6,817.0 million, a decrease of 26.8% compared to 2022, primarily due to timing differences in project settlements leading to reduced capital expenditures[38] - The net cash used in financing activities for 2023 was RMB 3,939.2 million, an increase of 210.0% compared to 2022, mainly due to increased cash dividend payments and repayment of bank loans during the reporting period[38] - The company has strategically focused on investments that support its existing value chain and promote advancements in the pharmaceutical and healthcare sectors[55] Governance and Leadership - The board consists of 12 members, including 5 executive directors, 2 non-executive directors, and 5 independent non-executive directors[116] - The company has a strong leadership team with diverse backgrounds in pharmaceutical and financial sectors[116] - The management team possesses extensive experience in the pharmaceutical industry, enabling the company to quickly adapt to market trends and customer needs[71] - The company emphasizes its commitment to innovation and strategic growth in the pharmaceutical industry[116] Risk Management - The company faces risks from potential declines in demand for pharmaceutical research services, which could negatively impact business if industry trends slow down or outsourcing ratios decrease[99] - The company is exposed to risks from changes in regulatory policies in the pharmaceutical research services industry, which could adversely affect operations if it fails to adjust its strategies accordingly[100] - The company has established a relatively complete internal control system to ensure compliance with laws and regulations, but faces risks if oversight of subsidiaries is insufficient[103] Future Outlook - The company expects 2024 revenue to reach RMB 38.3 billion to RMB 40.5 billion, with a growth rate of 2.7% to 8.6% excluding COVID-19 commercialization projects[24] - The company aims to build an integrated enabling platform to support innovation in the pharmaceutical industry, allowing any individual or company to realize their innovation dreams[90] - Future outlook indicates a projected revenue growth of 25% for the next fiscal year, driven by new product launches and market expansion strategies[128] Corporate Social Responsibility - The company is committed to enhancing customer stickiness and increasing customer conversion rates while continuously expanding its customer base[89] - The company aims to improve customer satisfaction through high-quality services and strict intellectual property protection, while expanding its global customer base, particularly targeting long-tail customers[93] - The company has not encountered any non-compliance cases related to bribery and corruption as of December 31, 2023, following anti-corruption training and initiatives[188]

Investment Rating - The report maintains a "Neutral" rating for WuXi AppTec (2359 HK) with a target price adjusted to HKD 37.00 [3][11]. Core Insights - WuXi AppTec's 2023 revenue increased by 2.5% year-on-year to RMB 40.34 billion, with various business segments showing different growth rates. However, the decline in COVID-related revenue and a challenging financing environment for pharmaceutical companies have led to a slowdown in revenue growth [2][8]. - The company has improved its operating efficiency, resulting in an increase in gross margin from 36.9% to 40.6% year-on-year. Shareholder net profit rose by 21.3% to RMB 10.69 billion, reflecting a 15.5% increase in adjusted Non-IFRS net profit [2][8]. - The outlook for 2024-25 revenue has been downgraded by 17.4% and 24.3% respectively due to extended order delivery times, reduced R&D spending by downstream pharmaceutical companies, and a still-recovering financing environment [2][3]. Summary by Sections Financial Performance - 2023 total revenue: RMB 40.34 billion, up 2.5% year-on-year [2][8]. - Shareholder net profit: RMB 10.69 billion, up 21.3% year-on-year [2][8]. - Adjusted Non-IFRS net profit: RMB 10.85 billion, up 15.5% year-on-year [2][8]. Revenue Forecasts - 2024E revenue forecast: RMB 39.69 billion, down 17.4% from previous estimates [7]. - 2025E revenue forecast: RMB 45.36 billion, down 24.3% from previous estimates [7]. Business Segment Performance - Chemical segment revenue growth: 1.1% [2]. - Testing segment revenue growth: 14.4% [2]. - Biological segment revenue growth: 3.1% [2]. - Cell and gene therapy CTDMO revenue growth: 0.1% [2]. Market Conditions - The financing environment for small and medium-sized pharmaceutical companies remains challenging, impacting demand for R&D outsourcing services [2][3]. - The potential impact of the U.S. Biologics Act on the company's U.S. business, which accounted for 64.8% of revenue in 2023, is being closely monitored [2][3].

Financial Performance - The company achieved a revenue of RMB 40,340.8 million for the year ended December 31, 2023, representing a 2.5% increase from RMB 39,354.8 million in 2022[2]. - Gross profit was RMB 16,372.5 million with a gross margin of 40.6%, compared to RMB 14,506.5 million and a gross margin of 36.9% in the previous year, marking a 12.9% increase[2]. - Net profit attributable to shareholders was RMB 10,690.2 million, reflecting a 21.3% increase from RMB 8,813.7 million in 2022, with a net profit margin of 26.5%[2]. - The adjusted net profit attributable to shareholders under non-IFRS was RMB 10,854.6 million, up 15.5% from RMB 9,399.3 million[2]. - The overall gross profit for the reporting period was RMB 16.37 billion, an increase of 12.9% compared to the previous year, with a gross margin of 40.6%[17]. - The company expects 2024 revenue to reach RMB 38.3 billion to RMB 40.5 billion, with a projected growth rate of 2.7% to 8.6% excluding COVID-19 commercialization projects[15]. - Adjusted EBITDA for the year ended December 31, 2023, was RMB 15,818.8 million, up from RMB 13,299.8 million in 2022, representing a growth of 11.4%[30]. - The adjusted EBITDA margin increased to 39.2% in 2023 from 33.8% in 2022, indicating improved operational efficiency[30]. - The net profit attributable to the parent company for the year ended December 31, 2023, was RMB 10,690.2 million, compared to RMB 8,813.7 million in 2022, reflecting a year-on-year increase of 20.1%[31]. - The adjusted net profit attributable to the parent company reached RMB 10,854.6 million in 2023, up from RMB 9,399.3 million in 2022, marking an increase of 15.5%[31]. Client and Revenue Growth - The company added over 1,200 new clients in 2023, with active clients exceeding 6,000, indicating strong demand for services[5]. - Revenue from U.S. clients reached RMB 26,130 million, a 42% increase when excluding COVID-19 commercialization projects[5]. - Revenue from the top 20 global pharmaceutical companies grew to RMB 16,110 million, a 44% increase when excluding COVID-19 commercialization projects[5]. - The chemical business generated RMB 29,171.5 million in revenue, a 1.1% increase, while excluding COVID-19 projects, it saw a robust growth of 36.1%[7]. Dividends and Shareholder Returns - The company plans to distribute a cash dividend of RMB 9.8336 per 10 shares, subject to shareholder approval[3]. - The proposed cash dividend for 2023 is RMB 9.8336 per 10 shares, an increase from RMB 8.9266 in 2022, with a total distribution amounting to RMB 2,882,031,329.68[121]. - The 2022 profit distribution plan was approved, with a cash dividend of RMB 8.9266 per 10 shares to shareholders listed on June 13, 2023[59]. Research and Development - The company’s pipeline includes 3,201 molecules, with 61 commercialization projects and 66 Phase III clinical projects as of the end of 2023[8]. - The company aims to enhance its capabilities in new drug development services, focusing on emerging technologies and innovative drug types[46]. - The company is investing 10% of its revenue into R&D, focusing on high-throughput screening (HTS) technologies[147]. - Future strategies include leveraging global resources for precision medicine product development and expanding clinical services to meet increasing global demand[106]. Operational Efficiency and Capacity Expansion - The company has continuously improved its asset utilization efficiency through strategic capacity expansions and mergers, enhancing service capabilities[47]. - The company has expanded its facilities globally, with new facilities in Suzhou and Qidong totaling 55,000 square meters, and an additional 20,000 square meters of GLP-certified facilities added in 2023[47]. - The new production capacity at the Taixing API production base officially commenced operations in January 2024, enhancing business growth capabilities[47]. - The company has achieved a significant increase in the volume of peptide solid-phase synthesis reactors to 32,000L as part of its capacity expansion efforts[47]. Financial Position and Liabilities - Total liabilities as of December 31, 2023, amounted to RMB 18,151.9 million, up from RMB 17,763.7 million in 2022, with 40.4% attributed to accounts payable and other payables[25]. - The debt-to-asset ratio decreased to 24.6% as of December 31, 2023, from 27.5% in 2022, primarily due to stable growth in free cash flow and retained earnings[27]. - Total assets as of December 31, 2023, included investments in associates amounting to RMB 2,180.4 million, a significant increase of 92.0% from RMB 1,135.7 million in 2022[32]. Market and Industry Trends - The global pharmaceutical R&D investment is projected to grow from USD 241.5 billion in 2022 to USD 335.7 billion by 2027, with a CAGR of approximately 6.8%[65]. - The global pharmaceutical R&D outsourcing ratio is expected to increase from 47.1% in 2022 to 57.0% by 2027, with the market size for outsourced services projected to grow from USD 133 billion to USD 252 billion, reflecting a CAGR of approximately 13.6%[64]. Risks and Challenges - The company faces risks from potential declines in demand for pharmaceutical R&D services due to industry slowdowns or budget adjustments by clients[74]. - The company is exposed to regulatory risks as the pharmaceutical R&D services industry is highly regulated, requiring timely adjustments to business strategies[75]. - The company has a significant global revenue proportion, making it vulnerable to international policy changes and geopolitical tensions that could impact its operations[79]. Employee and Management - The company has a total of 41,116 employees as of December 31, 2023, with compensation packages including base salary, allowances, bonuses, stock options, and other benefits[87]. - The management team possesses extensive experience in the pharmaceutical industry, enabling the company to quickly adapt to market trends and customer needs, driving rapid business growth[49]. Strategic Initiatives - The company aims to improve customer satisfaction through high-quality services and strict intellectual property protection, while expanding its global customer base, particularly targeting long-tail customers[69]. - The company is advancing the design and construction of facilities in locations such as Taixing, the United States, and Singapore to better meet global partner needs[68]. - The company has established a partnership with a leading academic institution to advance its drug discovery efforts[147].