SINOLINK SECURITIES·2024-07-30 04:01Investment Rating - The report maintains a "Buy" rating for WuXi AppTec (603259.SH) [1] Core Views - The company reported a revenue of 17.241 billion RMB for the first half of 2024, a year-over-year decrease of 8.64%, and a net profit attributable to shareholders of 4.24 billion RMB, down 20.20% year-over-year. However, the second quarter showed a revenue of 9.26 billion RMB, reflecting a quarter-over-quarter growth of 15.9% and a net profit of 2.29 billion RMB, up 18.3% quarter-over-quarter [1][2] - The company has maintained a robust client base with over 6,000 active clients and added more than 500 new clients during the reporting period. As of June 30, 2024, the company had an order backlog of 43.1 billion RMB, which represents a year-over-year growth of 33.2% when excluding specific commercial production projects [2] - The integrated CRDMO (Contract Research, Development, and Manufacturing Organization) business model has shown collaborative growth across multiple business segments, with notable revenue increases in various divisions, particularly the TIDES business, which saw a 57.2% year-over-year growth [2] Summary by Sections Performance Overview - For the first half of 2024, the company achieved a revenue of 17.241 billion RMB, a decrease of 8.64% year-over-year, and a net profit of 4.24 billion RMB, down 20.20% year-over-year. The basic earnings per share were 1.46 RMB, with a weighted average return on equity (ROE) of 7.62%. In the second quarter, revenue was 9.26 billion RMB, reflecting a quarter-over-quarter increase of 15.9%, and net profit was 2.29 billion RMB, up 18.3% quarter-over-quarter [1] Business Analysis - The company has successfully maintained a client base of over 6,000 active clients while adding more than 500 new clients. The order backlog as of June 30, 2024, stood at 43.1 billion RMB, with a year-over-year growth of 33.2% when excluding specific commercial production projects. The WuXi Chemistry segment generated 12.21 billion RMB in revenue, a 2.1% year-over-year increase when excluding COVID-19 commercial projects. The TIDES business experienced a strong revenue growth of 57.2% year-over-year, with a backlog increase of 147% [2] Profit Forecast and Valuation - The report forecasts the company's net profit attributable to shareholders for 2024, 2025, and 2026 to be 9.7 billion RMB, 10.8 billion RMB, and 12.5 billion RMB, respectively, corresponding to price-to-earnings (PE) ratios of 16, 15, and 13 times [3]