PHARMARON(SZ:300759) Southwest Securities·2024-04-07 16:00Investment Rating - The report assigns a "Buy" rating to the company with a target price of 25.22 CNY over the next six months, based on a current price of 21.01 CNY [1]. Core Insights - The company reported a revenue of 11.54 billion CNY for 2023, reflecting a year-on-year growth of 12.4%. The net profit attributable to shareholders was 1.6 billion CNY, up 16.5% year-on-year. The adjusted Non-IFRS net profit was approximately 1.9 billion CNY, a growth of 3.8% [2][12]. - The revenue growth is primarily driven by stable performance in mature business segments, while new sectors show promising potential for future growth [2][17]. Summary by Sections 1. Business Performance - The company operates four main business segments: laboratory services, CMC (small molecule CDMO) services, clinical research services, and large molecule and cell & gene therapy services. 1. Laboratory Services: Generated 6.66 billion CNY in revenue, accounting for 57.7% of total revenue, with a gross margin of 44.3% [2][17]. 2. CMC Services: Achieved 2.71 billion CNY in revenue, representing 23.5% of total revenue, with a gross margin of 33.7% [2][17]. 3. Clinical Research Services: Revenue reached 1.74 billion CNY, up 24.7% year-on-year, with a gross margin of 17.1% [2][18]. 4. Large Molecule and Cell & Gene Therapy Services: Generated 0.43 billion CNY in revenue, a year-on-year increase of 21.1%, but with a negative gross margin of -8.3% [2][18]. 2. Financial Forecast and Valuation - The company is expected to achieve net profits of 1.73 billion CNY, 2.01 billion CNY, and 2.35 billion CNY for the years 2024, 2025, and 2026, respectively. The projected PE ratio for 2024 is 26 times [2][27]. - Revenue growth rates for 2024-2026 are forecasted at 10.6%, 14.0%, and 16.2%, respectively, with an overall gross margin improvement expected [2][26]. 3. Market Position and Competitive Advantage - The company is recognized as a leading player in the CRO industry, with a strong project experience, team size, and service range, which enhances its competitive edge [2][27]. - The company has a clear shareholding structure, with major shareholders holding 19.3% of the equity, and its subsidiaries cover the entire pharmaceutical outsourcing service chain [2][20].