XDC 赛道爆发式成长，公司为国际领先的全面能力CRDMO 龙头。①随着第一三共改写乳腺癌诊疗标准的HER2 ADC（人表皮生长因子受体抗体偶联药物）药物面世，2023 年全球ADC 市场首次突破百亿美元。②ADC/XDC 行业高景气引发投融资及并购/BD（商务拓展）火热，过去一年并购交易金额大于10 亿美金的交易事件达到7 起，活跃的资本市场交易则进一步加速ADC/XDC 药企管线开发。相对于传统大分子生物药，结合大小分子的偶联药物开发难度更大，生产相对复杂。高壁垒催生高外包率带动CRDMO 需求提升。③据弗若斯特沙利文数据，公司为全球XDC CRDMO 的第一梯队、国内龙头，享行业高增速红利。1H24 公司的收入、毛利及净利润同比增长67.6%、133.4%及175.5%。Company profile
The company is a consolidated subsidiary of Pharmaceutical Biotech, the leading global biopharmaceutical CRDMO (R&D and manufacturing service outsourcing). Currently, Pharmaceutical Biotech holds 50.91% of the shares, and the consolidated subsidiary Hequan Pharmaceutical, which holds 98.56% of the shares, is owned by Pharmaceutical Kangde.
Investment logic
The XDC circuit has exploded, and the company is an internationally leading full-capability CRDMO leader. ① With the introduction of the HER2 ADC (Human Epidermal Growth Factor Receptor Antibody Conjugate Drug) drug, which rewrote the breast cancer diagnosis and treatment standards, the global ADC market surpassed 10 billion US dollars for the first time in 2023. ② The boom in the ADC/XDC industry has sparked a boom in investment and financing and mergers/acquisitions/BD (business development). In the past year, there have been 7 M&A transactions worth more than 1 billion US dollars. Active capital market transactions have further accelerated ADC/XDC pharmaceutical pipeline development. Compared with traditional macromolecular biopharmaceuticals, conjugated drugs that combine large and small molecules are more difficult to develop, and production is relatively complicated. High barriers spawned high outsourcing rates and increased demand for CRDMO. ③ According to Frost & Sullivan data, the company is the first tier of the global XDC CRDMO and the domestic leader, and enjoys the dividends of the industry's high growth rate. 1H24's revenue, gross profit and net profit increased by 67.6%, 133.4%, and 175.5% year-on-year.
The strength of the full-chain XDC one-stop platform supports the definitive growth of order volume and customer stickiness.
① The company is one of the few XDC outsourced service providers in the world with full R/D/M chain capabilities. The “end-to-end” business model has enabled the customer coverage to expand continuously: the company's cumulative number of customers has grown rapidly from 345 in 2022 to 419 in 2024. ② The “Empower, Follow, and Win Molecules” strategy enhances customer stickiness and ensures the transformation of more early-stage projects to late-stage projects. In the first half of 2024, about 41 projects went from the early stage to the late iCMC. The late-stage projects will last a long time and are expensive, and are expected to bring more benefits to the company.
The three major bases in Wuxi, Changzhou, and Shanghai have empowered the “one-hour” service circle, and momentum can be expected. ① With the gradual commissioning of new production capacity in Wuxi, the company is expected to replace outsourced procurement with in-house antibodies, connectors and payloads to help increase gross margin. ② Production capacity in Singapore will also be put into operation at the end of 2025 to meet the demand for overseas orders in the future.
Profit forecasts, valuations, and ratings
We forecast that in 2024/2025/2026, the company will achieve operating income of 3.34 billion/4.82 billion/6.38 billion yuan, a year-on-year increase of 57.5%/44.0%/32.6%, and net profit to mother of 0.72 billion/1.04 billion yuan, an increase of 152%/45%/37% year-on-year. Based on the DCF model valuation, the target price is HK$31.25/share. First coverage, giving a “buy” rating.
Risk warning
ADC/XDC pharmaceutical industry development falls short of expectations risk; risk of declining outsourcing rate; risk of increased competition; related transactions account for high risk; risk of policy uncertainty.
