Minsheng Securities·2024-10-29 07:31Investment Rating - The report maintains a "Recommended" rating for WuXi AppTec (603259.SH) [1][3]. Core Views - WuXi AppTec's revenue for the first three quarters of 2024 was 27.7 billion yuan, a year-on-year decrease of 6.2%, but a 4.6% growth rate when excluding COVID-19 related projects. The net profit attributable to shareholders was 6.53 billion yuan, down 19.1% year-on-year, while adjusted net profit was 7.35 billion yuan, down 10.1% year-on-year. In Q3 alone, revenue reached 10.46 billion yuan, a quarter-on-quarter increase of 13.0% and a non-COVID year-on-year growth of 14.6% [1]. - The company continues to see strong growth in its order backlog, with a total of 43.82 billion yuan in hand orders, representing a year-on-year increase of 35.2%. The demand from innovative projects and new contracts remains robust, particularly in the U.S. and Europe [1]. - WuXi AppTec aims for a revenue target of 38.3 to 40.5 billion yuan for 2024, with a year-on-year growth of 2.7% to 8.6% when excluding COVID-19 projects [1]. Summary by Sections Financial Performance - For Q3 2024, WuXi AppTec reported a revenue of 10.46 billion yuan, with a quarter-on-quarter growth of 13.0% and a year-on-year growth of 14.6% excluding COVID-19 projects. The adjusted net profit for Q3 was 2.97 billion yuan, reflecting a quarter-on-quarter increase of 20.9% [1]. - The company’s revenue for the first three quarters was 27.7 billion yuan, with a net profit of 6.53 billion yuan, down 19.1% year-on-year [1]. Business Segments - The CDMO commercialization projects are performing strongly, with WuXi Chemistry achieving a revenue of 20.09 billion yuan in the first three quarters, a non-COVID growth of 10.4%. The TIDES business saw a revenue increase of 71.0% year-on-year, with a backlog growth of 196% [1]. - WuXi Testing reported a revenue of 4.62 billion yuan, down 4.9% year-on-year, while WuXi Biology's revenue was 1.83 billion yuan, down 3.6% year-on-year [1]. Investment Outlook - The report projects net profits for WuXi AppTec to be 9.316 billion yuan in 2024, 10.508 billion yuan in 2025, and 12.134 billion yuan in 2026, corresponding to PE ratios of 17, 15, and 13 respectively [1][4].