EBSCN·2024-08-01 06:31Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of WuXi AppTec, with current prices at 40.69 CNY and 29.85 HKD respectively [3][4]. Core Views - The company reported a revenue of 17.24 billion CNY for the first half of 2024, a year-over-year decline of 8.6%, and a net profit attributable to shareholders of 4.24 billion CNY, down 20.2% year-over-year [1]. - The decline in net profit is attributed to a decrease in revenue and a significant drop in investment income and fair value changes compared to the same period last year [1]. - Despite the year-over-year decline, the company showed a quarter-over-quarter improvement in Q2 2024, with revenue increasing by 16.0% and net profit attributable to shareholders rising by 17.0% [1]. - The gross margin improved from 38.13% in Q1 2024 to 40.43% in Q2 2024, indicating enhanced operational efficiency [1]. Summary by Sections Revenue and Profitability - For H1 2024, the company achieved a revenue of 172.4 billion CNY, with a net profit of 42.4 billion CNY and a non-recurring net profit of 44.1 billion CNY [1]. - Q2 2024 revenue was 92.6 billion CNY, with a net profit of 22.98 billion CNY and a non-recurring net profit of 23.80 billion CNY [1]. Order Backlog and New Business - The order backlog reached 43.1 billion CNY as of H1 2024, with a strong year-over-year growth of 33.2% when excluding COVID-19 commercialization projects [1]. - New molecular business orders grew by 147% year-over-year, reflecting strong demand in this area [1]. Business Segment Performance - The chemical business generated 12.21 billion CNY in revenue, down 9.3% year-over-year, but showed a 2.1% increase when excluding COVID-19 projects [2]. - The testing business reported revenue of 3.02 billion CNY, with laboratory analysis and testing down 5.4% to 2.12 billion CNY, while clinical CRO and SMO business grew by 5.8% to 0.89 billion CNY [2]. - The biological business saw a revenue decline of 5.2% to 1.17 billion CNY, and WuXi ATU's revenue fell by 19.4% to 0.57 billion CNY [2]. Financial Forecasts - The net profit forecasts for 2024-2026 have been revised down to 9.23 billion CNY, 10.28 billion CNY, and 11.15 billion CNY, reflecting decreases of 15.7%, 19.5%, and 22.6% respectively [2]. - The corresponding P/E ratios for A-shares are projected at 13, 12, and 11 times, while for H-shares they are 9, 8, and 7 times [2].