The non-COVID-19 business is growing steadily, and the overall number of on-hand orders is quite abundant

2024H1 achieved revenue of 8.574 billion yuan, up 0.8% year on year; non-COVID-19 revenue increased about 7.7% year on year; net profit to mother was 1.499 billion yuan, down 33.9% year on year; adjusted net profit to mother was 2.544 billion yuan, down 13.0% year on year. After excluding the COVID-19 project, the company's overall performance grew steadily. By the end of June 2024, the company's total number of uncompleted orders had increased to 20.11 billion US dollars, and the number of uncompleted orders within 3 years was about 3.64 billion US dollars, or a guarantee for the company's future performance growth. Considering the slowdown in the pace of investment and financing of global new drug development and the large fluctuations in downstream demand, we lowered our 2024-2026 profit forecast. The net profit for 2024-2026 is 3.727/4.256/4.995 billion yuan (originally estimated 4.047/5.047/6.257 billion yuan), EPS is 0.88/1.00/1.17 yuan, and the PE corresponding to the current stock price is 10.7/9.4/8.0 times, given that the company is the leading CRDMO in the global biopharmaceutical field The enterprise, which has a certain scarcity, maintains a “buy” rating.

The number of comprehensive projects has been growing steadily. By the end of June 2024, we are actively building new technology platforms to efficiently empower customers. The number of comprehensive projects in the company reached 742, an increase of 61 over the previous year, including 359/224/87/56/16 in the preclinical/phase II/phase II/ phase II/ commercialization phase. With 2024H1, the company added 61 new integrated projects, of which about half of the newly signed projects came from the US; at the same time, through the “winning elements” strategy, the company transferred to a total of 9 external projects. The company is actively building technology platforms such as ultra-efficient continuous bioprocessing and ultra-enhanced batch bioprocessing. Single-use bioreactors have enabled more than 10 large-scale production projects to reduce costs and increase efficiency.

Continuing to increase the global production capacity layout, the overall business growth in the North American region is steady, and the company currently has 3 drug development centers, 8 drug development centers and 9 production bases worldwide; the company expects 40% of its production capacity to be distributed in North America, Europe, Singapore and other regions by 2027 to cope with geopolitical uncertainty. The first PPQ project at the Irish base was successfully completed in the first half of 2024, and production is close to full production in 2025. The company already has the ability to empower multi-polar partners in many places. The revenue of 2024H1 in North America/Europe/China/other regions was 50.10/1.863/1.418/0.284 billion yuan respectively, with year-on-year changes of +27.5%/-27.0%/-20.9%/+28.9%, respectively. The growth rate of business revenue in North America is steady.

Risk warning: Order delivery falls short of expectations, increased market competition, environmental protection and production safety risks.