Maintain an increase in holdings rating. The 2023 revenue was 7.825 billion yuan (-23.70%), and net profit to mother was 2,269 billion yuan (-31.28%). The results were in line with expectations. Considering the upward pace of production capacity and the new business still in the development stage, the 2024-2025 EPS forecast was lowered to 3.78/4.55 yuan (originally 4.35/5.74 yuan), and the 2026 EPS forecast was added to 5.74 yuan. Referring to comparable company valuations, the 2024 PE 28X was given, and the target price was lowered to 105.84 yuan (originally 130.60 yuan) to maintain the increase rating.
Traditional businesses are growing steadily. Small molecule CDMO's revenue was 6.620 billion yuan, and revenue after excluding large orders was 4.2 billion yuan (+25.60%). Revenue was confirmed for 386 clinical phase projects (+27) and 69 clinical phase III projects (+7). The company expects 28 certification approval phase (PPQ) projects in 2024 (+40%), with sufficient commercial reserves to guarantee long-term stable growth in performance.
Emerging business segments continue to advance. Emerging businesses had revenue of $1,199 billion (+20.42%) and gross profit margin of 26.48% (-7.20%). Among them: the revenue of chemical macromolecule CDMO increased 8.76% year on year, focusing on promoting the oligonucleotide CDMO business. The solid phase synthesis capacity of polypeptides reached 10,250 L at the end of the reporting period, and is expected to reach 14,250 L in 2024H1; the revenue of the clinical sector decreased 7.44% year on year, which is expected to be affected by the domestic investment and financing environment and price competition; pharmaceutical CDMO revenue increased 18.36% year on year, continuing to increase customer development efforts. The number of new orders signed increased 50% year on year. Biomacromolecule CDMO's revenue increased 31.29% year over year, and the first dual-antibody ADC project was delivered. Synthetic biotechnology revenue increased 38.13% year over year, and the first batch of production for the first IND project was successfully delivered. The continuous flow technology export business undertook 19 new projects, with an amount exceeding 250 million yuan. Emerging business segments continue to advance.
Catalysts: Order progress exceeded expectations, and new businesses such as chemical and biomolecules expanded rapidly.
Risk warning: Industry competition increases risk, geopolitical risk, commercial order fluctuation risk.