The performance in 2023 was impressive, with plenty of uncompleted orders to guarantee high future performance growth. In 2023, the company achieved revenue of 2.69 billion yuan, an increase of 114.3%; net profit to mother was 284 million yuan, an increase of 82.1% year on year; and adjusted net profit of 412 million yuan, up 112.1% year on year. By the end of 2023, the company had served a total of 345 customers, and had cooperated with 6 of the top 10 global pharmaceutical companies on ADC/XDC projects; the total number of uncompleted orders reached US$579 million, an increase of about 81.9% over the previous year, providing a guarantee for the rapid growth of the company's future performance. Considering macroeconomic fluctuations and the successive implementation of new global production capacity, we lowered our 2024-2025 profit forecast and added the 2026 profit forecast. The net profit for 2024-2026 is estimated to be 5.63/8.61 billion yuan (originally estimated 564/934 million yuan), EPS is 0.47/0.58/0.80 yuan, and the PE corresponding to the current stock price is 35.8/28.8/21.0 times. Consider the company as a leading global CRDMO company for antibody-conjugated drugs to maintain the “purchase” evaluation grade.
The “Empower, Follow, and Win Molecules” strategy successfully promoted rapid growth in the number of projects. Under the “Empower, Follow, and Win Molecules” strategy, the number of company pipelines grew rapidly. By the end of 2023, the number of the company's comprehensive projects reached 143, an increase of 52.1% over the previous year; of these, 50 new integrated projects were signed and 47 were transferred externally. There are a total of 122 pre-clinical and phase I projects, and a total of 21 phase II and post-stage projects. 5 of these are PPQ projects. The BLA is expected to be submitted in 2024, laying a solid foundation for future commercial growth. The number of integrated XDC projects for the novel conjugate drug increased to 14, showing a diversified development trend.
Steadily promote global production capacity construction and continue to empower global customers
The company currently has three operating bases in Wuxi, Changzhou and Shanghai, and has formed a regionally concentrated product development and supply chain system. In 2023, the Wuxi base successfully achieved a major milestone of “one-stop” production in the same park, covering the four core ADC production segments, achieving a one-stop production layout in the same park, greatly simplifying the conjugate drug supply chain and drastically shortening the production cycle. The Singapore production site officially started in March 2024 and is expected to be put into operation in 2026. As global production capacity construction continues to advance, the company continues to empower global customers. Revenue from North America/China/Europe/other regions in 2023 was 8.52/6.61/4.98/113 million yuan respectively, up 91%/116%/184%/76%, respectively.
Risk warning: Order delivery falls short of expectations, increased market competition, environmental protection and production safety risks.