Revenue growth is steady, and the expansion of new customers contributes to increased performance
In 2023, the company achieved revenue of 11.538 billion yuan, up 12.39% year on year; realized net profit of 1,601 billion yuan, up 16.48% year on year; non-IFRS adjusted net profit of 1.903 billion yuan, up 3.77% year on year.
Looking at 2023Q4 alone, the company achieved revenue of 2,978 billion yuan, a year-on-year increase of 3.99%; net profit to mother of 462 million yuan, an increase of 11.74%; and non-IFRS adjusted net profit to mother of 491 million yuan, a year-on-year decrease of 3.13%.
In 2023, revenue from the top 20 global pharmaceutical companies and other original customers was 1,723/9.815 billion yuan respectively; more than 800 new customers were added, contributing about 859 million yuan in revenue, and new customer expansion continued to contribute to performance growth. In view of the slowdown in downstream demand and the fact that the new business is still in the investment period, we lowered our 2024-2025 profit forecast and added a 2026 profit forecast. The company's net profit for 2024-2026 is 17.89/20.19/2,425 billion yuan (originally estimated at 20.69/2,657 billion yuan), EPS is 1.00/1.13/1.36 yuan, and the PE corresponding to the current stock price is 20.4/18.0/15.0 times, maintaining the “buy” rating.
The core business developed steadily, and new production capacity investment+new business expansion opened up room for growth. In 2023, laboratory services and CMC businesses achieved revenue of 66.60/2,711 billion yuan respectively, an increase of 9.38%/12.64% over the previous year. Laboratory services are the company's core business. In 2023, it participated in 764 drug discovery projects, an increase of about 17% over the same period in 2022. Ningbo Third Park is expected to be gradually put into use in 2024, continuously enhancing the company's service capabilities in animal testing such as safety assessment, pharmacology, and toxicology. By the end of 2023, CMC had 885 projects, and about 85% of its revenue came from drug discovery service customers. Front-end and back-end diversion effects were evident, and the production capacity layout of China, the US, and the UK can provide customers with flexible and efficient integrated solutions.
Clinical research services have entered a stage of high-quality development. The macromolecule and CGT business developed rapidly in 2023. Clinical research services achieved revenue of 1,737 billion yuan, an increase of 24.66% over the previous year; gross margin reached 17.05%, an increase of 5.59 pcts over the previous year. By the end of 2023, the company had 1,035 clinical CRO projects and 1,450 SMO projects, and clinical research services have entered a stage of high-quality development. In 2023, the two new businesses, Macromolecule and CGT, achieved total revenue of 425 million yuan, an increase of 21.06% over the previous year. Emerging businesses are developing rapidly. They have provided analysis and testing services for 26 CGT projects and CDMO services for 13 gene therapy projects.
Risk warning: Order delivery falls short of expectations; loss of core technical personnel; environmental and safety production risks.