GENSCRIPT BIO(HK:01548) Guotai Junan Securities·2024-03-13 16:00Investment Rating - The report maintains a "Buy" rating for King’s Ray Biotechnology (1548) [3][4]. Core Views - The company’s performance in 2023 met expectations, with revenue reaching $840 million, a 34.2% increase year-over-year. The adjusted net loss was $298 million, a reduction of $61 million compared to the previous year, primarily due to steady profit contributions from non-cell therapy businesses and rapid growth in CAR-T products in Europe and the U.S. [2][7]. - The company has a strong cash reserve of approximately $1.446 billion, which supports its operations and future growth [2]. - Revenue forecasts for 2024 and 2025 have been adjusted downwards to $1.251 billion and $1.792 billion, respectively, due to impacts from financing changes on the CDMO business and CAR-T production capacity. A new revenue estimate for 2026 is set at $2.756 billion [2][7]. - The non-cell therapy business showed steady growth, with external revenue of $555 million, an 8.9% increase. Life sciences services and product revenue reached $413 million, up 14.5%, although adjusted gross margins slightly declined [2][7]. - The CARVYKTI treatment for multiple myeloma (MM) is expected to receive approval in 2024, which could accelerate growth in cell therapy. The sales for CARVYKTI in 2023 were $500 million, with significant quarterly growth [2][7]. Summary by Sections Financial Performance - 2023 revenue was $840 million, a 34.2% increase from 2022. Adjusted net loss was $298 million, down from $359 million in 2022. [7] - The company forecasts revenue of $1.251 billion in 2024, $1.792 billion in 2025, and $2.756 billion in 2026, reflecting growth rates of 49%, 43%, and 54% respectively [7]. Business Segments - Non-cell therapy business revenue was $555 million, with life sciences services and products contributing $413 million. CDMO revenue was $110 million, down 12.4% due to slower financing and capacity ramp-up [2][7]. - The CAR-T therapy segment saw revenue of $285 million, a 143.7% increase, with significant contributions from milestone payments and sales sharing [2][7]. Market Outlook - The report highlights the potential for CAR-T therapies to exceed expectations in terms of market uptake, particularly with upcoming approvals in the U.S. and Europe [2][7].