Haitong Securities·2024-03-26 16:00Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company reported a revenue of 40.34 billion yuan in 2023, representing a year-on-year growth of 2.5%. Excluding COVID-19 commercialization projects, revenue growth was 25.6% [4] - The net profit attributable to the parent company was 9.6 billion yuan, a year-on-year increase of 9.0%, while the adjusted net profit was 10.9 billion yuan, up 15.5% year-on-year [4] - The company has shown strong growth in its TIDES business, with revenue reaching 3.41 billion yuan, a 64.4% increase year-on-year, and a significant increase in orders by 226% [4][5] - The company continues to implement a "long-tail" strategy, increasing its share of large pharmaceutical companies, with revenue from the top 20 global pharmaceutical companies growing by 44% [6] Summary by Sections Financial Performance - In 2023, the company achieved a total revenue of 40.34 billion yuan, with a net profit of 9.6 billion yuan, and an adjusted net profit of 10.9 billion yuan [4][5] - The revenue from the chemical business was 29.17 billion yuan, growing by 1.1%, while excluding specific commercialization projects, it grew by 36.1% [4] - The testing business generated 6.54 billion yuan in revenue, a 14.4% increase, with drug safety evaluation services growing by 27.3% [5] Business Segments - The chemical business showed strong growth in CDMO services, with D&M business revenue reaching 21.62 billion yuan, a 55.1% increase year-on-year [4] - The biological business generated 2.55 billion yuan, with new molecular types contributing 26% to its revenue [5] - The high-end CTDMO business reported revenue of 1.31 billion yuan, a slight increase of 0.1% [5] Future Outlook - The company is expected to continue benefiting from the rising demand in the CRO and CDMO sectors, with projected EPS for 2024-2026 being 3.26, 3.67, and 4.17 yuan respectively [6] - The reasonable valuation range for the company is estimated to be between 65.28 and 81.60 yuan based on a PE ratio of 20-25 times for 2024 [6]