Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 66.40 HKD [8][9]. Core Insights - The company reported strong financial performance for the fiscal year 2024, with revenue, net profit, and adjusted net profit reaching 40.5 billion, 10.7 billion, and 11.7 billion RMB respectively, representing year-over-year growth of 91%, 277%, and 185% [1]. - The company is positioned for rapid growth, benefiting from the expansion of the ADC industry, with an expected revenue CAGR of 27% from 2025 to 2027 [1]. - The company has a significant increase in project numbers and backlog orders, with a total of 194 comprehensive projects and a backlog of 9.91 billion USD, reflecting a 71% increase from the end of 2023 [2][3]. Financial Performance - The company achieved a gross margin of 30.6% in 2024, an increase of 4.2 percentage points from 2023, driven by capacity ramp-up and cost reduction [4]. - The company’s capital expenditures (CAPEX) for 2024 were 15.4 billion RMB, primarily for capacity construction in Singapore and Wuxi, with an expected CAPEX of 14 billion RMB in 2025 [4]. Earnings Forecast and Valuation - The adjusted net profit estimates for 2025 and 2026 have been raised by 8% and 18% to 16.2 billion and 21.7 billion RMB respectively, with a projected net profit of 25.8 billion RMB for 2027 [5][13]. - The company is expected to achieve a 36% CAGR from 2024 to 2026, with a target price adjustment to 66.40 HKD based on a PEG ratio of 1.28x [5][15]. Operational Metrics - As of the end of 2024, the company served 499 clients, a 45% increase year-over-year, and has introduced 69 new pipelines, reflecting a strong demand in the ADC sector [3]. - The company’s revenue contributions from pre-IND and post-IND services are projected to be approximately 16.76 billion and 23.77 billion RMB in 2024, with significant growth rates of 80.8% and 98.6% year-over-year [2].
药明合联：乘势而上，海外产能落成在即-20250326