Changjiang Securities·2024-03-31 16:00Investment Rating - The report maintains a "Buy" rating for WuXi AppTec [6] Core Insights - In 2023, WuXi AppTec achieved revenue of 40.341 billion yuan, a year-on-year increase of 2.51%. The adjusted net profit attributable to the parent company was 10.855 billion yuan, reflecting a growth of 15.5% [5][6] - The company expects revenue for 2024 to be between 38.3 billion and 40.5 billion yuan, with a projected growth rate of 2.7% to 8.6% after excluding COVID-19 commercialization projects [5][6] Summary by Sections Financial Performance - In 2023, the company reported a revenue of 40.341 billion yuan, with a net profit of 9.748 billion yuan, marking a 16.81% increase year-on-year. The adjusted Non-IFRS net profit was 10.855 billion yuan, up 15.5% [5][6] - The revenue breakdown shows that the front-end business, including drug discovery and biology services, experienced slower growth, while the back-end business saw significant growth, particularly in D&M and TIDES segments [5][6] Business Segments - The front-end business, such as drug discovery, synthesized and delivered over 420,000 new compounds in the past twelve months, a 6% increase year-on-year. The biology business generated revenue of 2.55 billion yuan, growing 3.1% [5][6] - The back-end business, excluding specific commercialization projects, saw D&M revenue grow by 55.1%, while TIDES revenue reached 3.41 billion yuan, a strong growth of 64.4% year-on-year. TIDES orders on hand increased by 226% [5][6] Customer Insights - Revenue from U.S. clients, excluding specific commercialization projects, grew by 42%, while European clients saw a 12% increase, and Chinese clients had a modest growth of 1% [5][6] - Revenue from the top 20 global pharmaceutical companies reached 16.11 billion yuan, with a 44% increase when excluding specific commercialization projects. Revenue from other global clients grew by 18%, totaling 24.23 billion yuan [5][6] Future Outlook - For 2024, the company anticipates regular revenue growth despite external uncertainties, projecting revenue between 38.3 billion and 40.5 billion yuan. The adjusted Non-IFRS net profit margin is expected to remain similar to the previous year [5][6] - Forecasted net profits for 2024-2026 are 9.152 billion yuan, 10.183 billion yuan, and 11.521 billion yuan, with corresponding PE ratios of 15, 14, and 12 times [5][6]