Best effort to ensure business continuity

Investment Rating - Maintain BUY rating for WuXi AppTec with a target price of RMB67.53, down from the previous target price of RMB116.01, indicating a potential upside of 32.9% from the current price of RMB50.81 [2][3]. Core Insights - WuXi AppTec reported a revenue of RMB40.3 billion in 2023, reflecting a year-on-year growth of 2.5%. The attributable recurring net income was RMB9.7 billion, up 16.8% YoY, and the attributable adjusted non-IFRS net income reached RMB10.9 billion, up 15.5% YoY. Excluding COVID-19 related revenue, the company achieved a remarkable revenue growth of 25.6% YoY [2][3]. - For 2024, management expects reported revenue to range between RMB38.3 billion and RMB40.5 billion, representing a decline of 5.1% YoY to growth of 0.4% YoY. Excluding COVID-19 related revenue, growth is anticipated to be between 2.7% and 8.6% YoY [2][3]. - The company has shown solid business development in 2023, particularly in TIDES revenue, which grew by 64.4% YoY, and drug safety assessment and SMO business, which grew by 27.3% and 26.1% YoY, respectively [2][3]. - WuXi AppTec is actively working on commercial projects and has started receiving royalty income in 2023, with several customers discussing long-term contracts for advanced-stage projects [2][3]. Financial Summary - Revenue for FY23 was RMB40,341 million, with a YoY growth of 2.5%. For FY24E, revenue is projected at RMB39,126 million, reflecting a decline of 3.0% YoY, followed by growth of 10.2% in FY25E and 11.1% in FY26E [3][8]. - Adjusted net profit for FY23 was RMB10,854 million, up 15.5% YoY, with projections of RMB10,260 million for FY24E (down 5.5% YoY), RMB11,364 million for FY25E (up 10.8% YoY), and RMB12,828 million for FY26E (up 12.9% YoY) [3][8]. - The company’s P/E ratio for FY23 was 13.7, with projections of 14.5 for FY24E, 13.1 for FY25E, and 11.6 for FY26E [3][8]. Shareholder Actions - WuXi AppTec has demonstrated confidence in its business by canceling RMB1.2 billion H-shares under its 2023 H-share Award Scheme and is in the process of repurchasing another RMB1 billion A-shares [2][3].