药明生物(02269) - 2024 - 中期业绩

2024 Interim Results Announcement Financial Highlights In H1 2024, the company's revenue slightly increased by 1.0% to RMB 8.57 billion, but gross profit, net profit, and EPS significantly declined, with gross margin falling from 41.9% to 39.1% and net profit attributable to owners decreasing by 33.9%; no interim dividend was declared | Metric | H1 2024 (RMB million) | H1 2023 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 8,574.2 | 8,492.0 | 1.0% | | Gross Profit | 3,350.0 | 3,560.6 | (5.9%) | | Gross Margin | 39.1% | 41.9% | -2.8pp | | Net Profit | 1,780.3 | 2,337.9 | (23.9%) | | Net Profit Attributable to Owners | 1,499.1 | 2,266.7 | (33.9%) | | Adjusted Net Profit Attributable to Owners | 2,250.3 | 2,838.3 | (20.7%) | | Basic Earnings Per Share (RMB) | 0.37 | 0.55 | (32.7%) | - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2024[2] Management Discussion and Analysis Despite industry challenges, the company maintained robust business growth through its unique CRDMO platform and "follow-the-molecule and win-the-molecule" strategy, with increasing project numbers, strong non-COVID business, and planned global capacity expansion, while profitability faced pressure from product mix shifts and new facility ramp-up, remaining confident in future growth and monitoring the Biosecure Act Business Review Overall Performance - Despite challenges, the Group's business developed steadily, with the total number of integrated projects increasing to 742, including 359 preclinical and 311 early-stage clinical projects[3] | Development Stage | Number of Projects | | :--- | :--- | | Preclinical Development | 359 | | Early-Stage (Phase I & II) Clinical Development | 311 | | Late-Stage (Phase III) Clinical Development | 56 | | Commercial Manufacturing | 16 | | Total | 742 | - Non-COVID revenue increased by 7.7% year-on-year, and non-COVID late-stage clinical and commercial manufacturing project revenue increased by 11.7% year-on-year[5] | Order Type | Amount (USD) | | :--- | :--- | | Unfulfilled Service Orders | 13.00 billion | | Unfulfilled Potential Milestone Payment Orders | 7.105 billion | | Total Unfulfilled Orders | 20.105 billion | | Unfulfilled Orders within Three Years | 3.642 billion | CRDMO Platform — Research (R) - The Group provides comprehensive solutions in drug research and discovery (R), possessing multiple industry-leading technology platforms, including the bispecific antibody platform WuXiBody™ (with approximately 50 collaborations achieved), multispecific antibody platform SDArBodY™, and T-cell engager (TCE) platform[6] - Strategic collaborations with global leading pharmaceutical companies like GSK, BioNTech, and Medigene accelerate new biologics technology development, strengthening client trust and driving pipeline growth[7] CRDMO Platform — Development (D) - In the development (D) segment, the Group has enabled over 550 IND filings and continuously iterates its technology platforms to accelerate development and manufacturing[8] - Core technology platforms include WuXia™ cell line development, WuXiUP™ continuous manufacturing, WuXiUI™ ultra-high intensification fed-batch culture, and WuXiHigh™ high-concentration formulation development, which significantly improve production efficiency, product quality, and reduce costs[8][9] CRDMO Platform — Manufacturing (M) - In the manufacturing (M) segment, late-stage clinical and non-COVID commercial projects steadily grew to 72, with 4 new "win-the-molecule" projects added[10] - During the reporting period, global manufacturing success rate was approximately 98%, and drug substance and drug product PPQ (Process Performance Qualification) project success rates exceeded 97%, laying a solid foundation for commercial manufacturing growth[10] New Business Drivers - New business platforms such as the Microbial Platform, WuXi XDC (ADC and Bioconjugate CRDMO), and WuXi Vaccines (Vaccine CRDMO) are flourishing, becoming significant drivers of the Group's growth[11] - WuXi XDC has secured 167 ADC and other bioconjugate projects, with 29 in Phase II/III[11] Quality - Since 2017, the Group has successfully completed 37 regulatory inspections by various authorities, including the US FDA and EU EMA, without major findings, and over 1,400 global client GMP audits[12] ESG - The Group demonstrates outstanding ESG performance, earning multiple international recognitions including inclusion in the Dow Jones Sustainability World Index, MSCI ESG rating of AAA, EcoVadis Platinum rating, and CDP Water Security A and Climate Change A- ratings[13] Regional Operations - The Hangzhou, China site added three 5,000-liter single-use bioreactors, increasing total capacity to 23,000 liters[14] - Phase I of the MFG6 facility at the Ireland, Europe site completed its first PPQ project, Phase II is progressing as planned with nearly all 2025 capacity reserved, and the Germany site will construct a second pre-filled syringe filling line[14] - The Boston, US research service center has opened, and the New Jersey manufacturing facility is nearing GMP-ready status[15] - The Singapore site has officially commenced construction, with engineering progress on schedule[15] WBS (WuXi Biologics Lean Operation Management System) - By implementing approximately 60 WBS improvement projects, the Group achieved significant cost savings, inventory reduction, labor hour savings, and quality enhancements during the reporting period[16] Future Outlook - Despite macroeconomic uncertainties, the Group remains confident in business growth, leveraging its CRDMO business model and "follow-the-molecule and win-the-molecule" strategy[17] - Regarding the proposed US Biosecure Act, the company reiterates that its business does not involve human genomics or collect human genomic data, firmly believing it poses no national security risk to any country, and will closely monitor the legislative process to ensure compliant operations[17] Financial Review Revenue Analysis - Total revenue for H1 2024 was RMB 8.574 billion, a slight year-on-year increase of 1.0%, primarily driven by non-COVID business, especially rapidly developing technology platforms like ADC and bispecific antibodies[18] | Region | H1 2024 Revenue (RMB million) | Share | H1 2023 Revenue (RMB million) | Share | | :--- | :--- | :--- | :--- | :--- | | North America | 5,009.7 | 58.4% | 3,927.9 | 46.3% | | Europe | 1,863.0 | 21.7% | 2,551.6 | 30.0% | | China | 1,417.9 | 16.6% | 1,792.5 | 21.1% | | Others | 283.6 | 3.3% | 220.0 | 2.6% | | Stage | H1 2024 Revenue (RMB million) | Share | | :--- | :--- | :--- | | Pre-IND Services | 3,068.0 | 35.8% | | Early-Stage (Phase I/II) Clinical Development | 1,893.0 | 22.1% | | Late-Stage (Phase III) & Commercialization | 3,434.4 | 40.0% | | Others | 178.8 | 2.1% | | Business Segment | H1 2024 Revenue (RMB million) | Share | | :--- | :--- | :--- | | Biologics | 6,961.6 | 81.2% | | XDC | 1,612.6 | 18.8% | Cost and Profit Analysis - Cost of sales increased by 5.9% year-on-year to RMB 5.224 billion[24] - Gross profit decreased by 5.9% year-on-year to RMB 3.350 billion, with gross margin falling from 41.9% to 39.1%[25] - The decline in gross margin was primarily due to (i) the absence of high-margin significant discovery service transactions present in the prior period, (ii) slightly lower utilization rates at China facilities due to COVID-19 project cancellations, and (iii) the ramp-up impact of new facilities in Ireland, Germany, and the US[25][26] - Net profit decreased by 23.9% year-on-year to RMB 1.780 billion, with net profit margin falling from 27.5% to 20.8%, mainly due to reduced gross profit, increased selling, marketing, and administrative expenses, and net foreign exchange losses[35] Expense Analysis - Selling and marketing expenses increased by 111.7% year-on-year to RMB 223 million, primarily for expanding regional presence and market promotion[30] - Administrative expenses increased by 13.7% year-on-year to RMB 773 million, supporting business expansion and the establishment of independent functions post-WuXi XDC's listing[31] - Research and development expenses were RMB 344 million, consistent with the prior period, reflecting continued investment in innovative technology platforms[32] Balance Sheet Analysis - Property, plant, and equipment balance increased by 3.2% to RMB 28.259 billion, reflecting continuous investment in global facility construction[37] - Inventories increased by 11.1% to RMB 1.963 billion, primarily due to stock preparation for European entity ramp-up and WuXi XDC business expansion[43] - Trade and other payables decreased by 20.9% to RMB 2.180 billion, mainly due to the payment of 2023 annual bonuses and reduced payables for facility construction[47] Liquidity and Capital Resources - As of June 30, 2024, total bank balances, cash, and time deposits were RMB 9.494 billion, a 5.2% decrease from the beginning of the year[50] - As of June 30, 2024, total borrowings were approximately RMB 2.157 billion, largely consistent with the beginning of the year[52] - The gearing ratio (interest-bearing borrowings/total equity) was 4.8%, consistent with 4.9% at the end of 2023, maintaining a healthy level[56] Non-IFRS Measures | Metric (RMB million) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Profit | 1,780.3 | 2,337.9 | | Adjusted Net Profit | 2,544.8 | 2,925.6 | | Adjusted Net Profit Attributable to Owners | 2,250.3 | 2,838.3 | | Adjusted Net Profit Margin | 29.7% | 34.5% | | Metric (RMB million) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | 2,805.9 | 3,230.6 | | Adjusted EBITDA | 3,570.4 | 3,818.3 | | Adjusted EBITDA Margin | 41.6% | 45.0% | Other Information Employees and Remuneration Policy - As of the end of the reporting period, the Group had a total of 12,435 employees, including approximately 4,200 research personnel, with an overall talent retention rate of approximately 94%[60] Interim Dividend - The Board resolved not to declare any interim dividend for the six months ended June 30, 2024[61] Corporate Governance and Compliance - During the reporting period, the company complied with all code provisions of the Corporate Governance Code, except for a deviation from code provision F.2.2 where some directors were unable to attend the annual general meeting due to other commitments[62] - All directors confirmed compliance with the Model Code for Securities Transactions by Directors and the company's written guidelines during the reporting period[63] Use of Proceeds from Placing - Regarding the net proceeds of approximately RMB 10.9 billion from the February 2021 placing, as of June 30, 2024, approximately RMB 9.16 billion has been utilized, with approximately RMB 1.74 billion remaining unutilized, primarily for acquiring additional manufacturing capacity and investing in mRNA-related technologies[64][65] Purchase, Sale or Redemption of the Company's Listed Securities - During the reporting period, the company repurchased a total of 76,909,000 shares on the Stock Exchange for a total purchase price of approximately HKD 1.355 billion[66][67] Condensed Consolidated Financial Statements The financial statements detail the Group's H1 2024 financial performance and period-end financial position, with the income statement reflecting stable revenue but declining profit due to lower gross margin and increased expenses, while the balance sheet shows steady total asset growth driven by fixed asset investments and a stable liability structure, indicating a robust overall financial position Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (RMB thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 8,574,214 | 8,492,046 | | Gross Profit | 3,349,951 | 3,560,634 | | Profit Before Tax | 2,008,377 | 2,528,976 | | Profit for the Period | 1,780,310 | 2,337,860 | | Profit Attributable to Owners of the Company | 1,499,080 | 2,266,675 | Condensed Consolidated Statement of Financial Position | Item (RMB thousand) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 36,288,978 | 35,377,477 | | Property, Plant and Equipment | 28,258,954 | 27,377,643 | | Current Assets | 19,816,741 | 21,198,249 | | Bank Balances and Cash | 9,153,528 | 9,669,839 | | Total Assets | 56,105,719 | 56,575,726 | | Current Liabilities | 6,808,244 | 7,636,020 | | Non-current Liabilities | 4,656,660 | 4,921,824 | | Total Liabilities | 11,464,904 | 12,557,844 | | Total Equity | 44,640,815 | 44,017,882 | Notes to the Condensed Consolidated Financial Statements - The financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting," with accounting policies consistent with the 2023 annual report[76][77] - Operating segments are primarily divided into Biologics and XDC, with external sales revenue for H1 2024 being RMB 6.962 billion for the Biologics segment and RMB 1.613 billion for the XDC segment[84] - As of June 30, 2024, trade receivables aging shows RMB 3.418 billion as not overdue, accounting for approximately 59.7% of the total[102]