The Zhitong Finance App learned that BOC International released a research report stating that it maintained the “buy” rating of Kingsley Biotech (01548) and slightly lowered 2024-25E revenue by 0.6%/0.5%, but based on higher operating margin assumptions, the 2024E net loss forecast decreased by 4%, and 2025E net profit increased from 940 million to 1.48 billion yuan; at the same time, the 2026 profit forecast was first introduced: revenue of US$2.16 billion (2023-26 ECAGR 37%), net profit of 174 million yuan. HK$27.75.

The main views of JBC International are as follows:

Revenue resilience is strong, and profit margins exceed expectations:

The company's revenue in 2023 was US$840 million, +34.2% year-on-year, in line with the bank's previous forecast of US$843 million; adjusted net loss of US$298 million (vs. net loss of US$359 million in 2022), which is significantly less than the bank's forecast of 395 million. The overall gross profit margin was 48.8% (+0.2pptYOy), exceeding the bank's expectations of 46.5%, mainly due to the rapid increase in gross margin in the cell therapy sector. The bank believes that in 2023, when the industry fluctuates, the company's non-cellular therapy business still recorded steady growth of nearly 10%, fully reflecting its strong resilience as an industry leader. Standing in the present, the hardest year for the company may be over. As overseas financing gradually picked up in 1Q24, BoboBio completed team optimization, and accelerated overseas market development, the bank expects the CDMO business to improve in 2024, and there is a high possibility that it will surpass the company's guidelines.

Performance and guidelines for various segments of the non-cellular business:

1) Life science services: external revenue of 405 million, +16% year over year, slightly exceeding the forecast, adjusted gross profit margin of 54.4% (-1.4ppts YoY); 2024 guidance: 15-20% revenue growth, and gross margin stabilized at around 55%. 2) Boom: External revenue of $107 million, -11% year-on-year, lower than the forecast, with an adjusted gross profit margin of 18.1% (-16.1ppts YoY, affected by reduced capacity utilization, fluctuations in service prices, depreciation of disposable raw material inventory, etc.); 2024 Guidelines: Revenue remains flat, and investment is preparing for a further acceleration in order growth. 3) Best J: External revenue of 43 million, +12% year over year, slightly exceeding the forecast, adjusted gross profit margin of 38.5% (-4.4 ppts YoY, gross margin of core enzyme preparations about 40%); 2024 guidelines: Revenue increased by 20-30% at a fixed exchange rate (CER), and gross margin/operating margin stabilized at 39%/4-5%, respectively.

Cell Therapy Grows in Flourish: Company Continues Guidance

1) Peak sales of cilta-cel reached at least 5 billion US dollars; 2) Production capacity reached 10,000 doses by the end of 2025. Clinical production has begun at the new Ghent plant, and the cell processing capacity has doubled compared to the beginning of 2023; 3) CARTITUDE-5 enrollment was completed in 1H24. Subsequent pipelines focus on LB1908 (Claudin 18.2) and LB2103 (BCMacAR-γdelta T).