WuXi AppTec(SH:603259) KAIYUAN SECURITIES·2024-10-31 08:30Investment Rating - The investment rating for WuXi AppTec (603259.SH) is maintained as "Buy" [1] Core Views - The company has shown steady revenue growth quarter-on-quarter, with rapid development in new business areas such as TIDES [1][4] - The small molecule D&M pipeline continues to expand, with a total of 3,356 molecules in the pipeline as of Q3 2024, and 915 new molecules added in the first three quarters of 2024 [2][4] - TIDES business revenue reached 3.55 billion yuan in Q1-3 2024, representing a year-on-year growth of 71%, with a backlog of orders increasing by 196% year-on-year as of September 2024 [2][4] Financial Performance Summary - For Q1-3 2024, the company reported total revenue of 27.7 billion yuan, a year-on-year decline of 6.2%, but a growth of 4.6% when excluding COVID-19 commercialization projects [4] - The net profit attributable to shareholders for Q1-3 2024 was 6.53 billion yuan, down 19.1% year-on-year, while the adjusted Non-IFRS net profit was 7.35 billion yuan, down 10.1% year-on-year [4] - In Q3 2024 alone, the company achieved revenue of 10.46 billion yuan, a year-on-year decline of 2.0% but a quarter-on-quarter increase of 13.0% [4] - As of September 2024, the company's backlog of orders stood at 43.82 billion yuan, an increase of 35.2% year-on-year [4] Business Segment Performance - The chemical business generated revenue of 7.88 billion yuan in Q3 2024, a year-on-year increase of 1.4%, and a growth of 26.4% when excluding COVID-19 projects [2][4] - The clinical testing business reported revenue of 4.62 billion yuan in Q3 2024, down 4.9% year-on-year, while the drug safety evaluation and SMO business maintained industry leadership [5] - The biological business segment achieved revenue of 1.83 billion yuan in Q1-3 2024, a year-on-year decline of 3.6%, with new molecular revenue accounting for approximately 28.5% of total revenue [5] Future Outlook - The company is expected to maintain its long-term growth trajectory, with net profit forecasts for 2024-2026 at 10.40 billion, 11.30 billion, and 12.86 billion yuan respectively, and EPS estimates of 3.60, 3.91, and 4.45 yuan [4][6] - The current stock price corresponds to P/E ratios of 14.4, 13.3, and 11.7 for the years 2024, 2025, and 2026 respectively, indicating a favorable valuation based on projected earnings growth [4][6]