Minsheng Securities·2024-03-18 16:00Investment Rating - The report maintains a "Recommended" rating for WuXi AppTec (603259.SH) [2][4] Core Views - WuXi AppTec's revenue for 2023 reached 40.34 billion yuan, a year-on-year increase of 2.5%, with a 25.6% growth rate excluding COVID-19 related projects. The net profit attributable to shareholders was 9.61 billion yuan, up 9.0% year-on-year, and the adjusted net profit was 10.86 billion yuan, reflecting a 15.5% increase [1][2] - The company is expected to achieve revenue between 38.3 billion and 40.5 billion yuan in 2024, with a year-on-year growth of 2.7% to 8.6% excluding COVID-19 projects [1][2] Summary by Sections Financial Performance - WuXi Chemistry reported revenue of 29.17 billion yuan, a 1.1% increase, with a 36.1% growth rate excluding COVID-19 projects. The revenue from R&D was 7.55 billion yuan (+4.7%), while D&M revenue was 21.62 billion yuan (-0.1%), with a 55.1% growth rate excluding COVID-19 [1] - WuXi Testing generated revenue of 6.54 billion yuan (+14.4%), with laboratory analysis and testing revenue at 4.78 billion yuan (+15.3%) [1] - WuXi Biology's revenue was 2.55 billion yuan (+3.1%), with new molecular-related revenue accounting for 27.5% [1] - WuXi ATU's revenue was 1.31 billion yuan (+0.1%), supporting CAR-T therapy approvals [1] - WuXi DDSU's revenue decreased to 730 million yuan (-25.1%), but gross margin improved by 9.5 percentage points [1] Future Outlook - The company has a strong order backlog of 35.24 billion yuan, a 7.4% increase year-on-year, with 23.39 billion yuan expected to be recognized as revenue in 2024 [1] - Capital expenditure for 2024 is projected at 5 billion yuan, with free cash flow expected to reach 4-5 billion yuan [1] Valuation Metrics - The projected net profit for 2024-2026 is estimated at 9.58 billion, 10.96 billion, and 12.85 billion yuan, corresponding to PE ratios of 16, 14, and 12 times respectively [1][2]