Southwest Securities·2024-03-21 16:00Investment Rating - The investment rating for WuXi AppTec (603259) is "Buy" with a target price of 73.04 CNY for the next six months [1][10]. Core Insights - WuXi AppTec reported a stable revenue growth in 2023, achieving a total revenue of 40.34 billion CNY, a year-on-year increase of 2.5%. The net profit attributable to shareholders reached 9.61 billion CNY, up 9% year-on-year, with adjusted Non-IFRS net profit surpassing 10.86 billion CNY, reflecting a 15.5% increase [2][7]. - Excluding COVID-19 related projects, the company's revenue grew by 25.6% year-on-year, driven by over 1,200 new clients and more than 6,000 active clients, leading to a 226% increase in TIDES business orders [2][7]. - The company continues to strengthen its integrated CRDMO and CTDMO business models, leveraging its global presence and full industry chain coverage to sustain high growth [2][7]. Summary by Sections Financial Performance - In 2023, WuXi AppTec's revenue reached 40.34 billion CNY, with a net profit of 9.61 billion CNY. The adjusted Non-IFRS net profit was 10.86 billion CNY, marking significant milestones for the company [2][9]. - The revenue breakdown includes 29.17 billion CNY from chemistry services, 6.54 billion CNY from testing services, and 2.55 billion CNY from biology services [9][13]. Business Segments - WuXi Chemistry: Revenue of 29.17 billion CNY, a 1.1% increase year-on-year, with a 36.1% increase when excluding COVID-19 projects [2][8]. - WuXi Testing: Revenue of 6.54 billion CNY, up 14.4% year-on-year, with laboratory analysis and testing services leading the growth [2][8]. - WuXi Biology: Revenue of 2.55 billion CNY, a 3.1% increase year-on-year, with new molecular-related revenue growing by 26% [2][8]. Future Projections - The forecast for net profit growth from 2024 to 2026 is 1.2%, 16.7%, and 18.3%, respectively, with EPS projected at 3.32 CNY, 3.87 CNY, and 4.57 CNY [2][9]. - The company is expected to maintain a PE ratio of 15, 13, and 11 for the years 2024, 2025, and 2026, respectively [2][9].