WUXI BIOLOGICS(2269.HK):1H24 MARGINS DECLINED;US REVENUE PROPORTION EXPANDED TO 58%
WUXI BIOLOGICS(2269.HK):1H24 MARGINS DECLINED;US REVENUE PROPORTION EXPANDED TO 58%
Margins experienced declines. The company's GPM in 1H24 fell by 2.9ppts YoY to 39.1%, and attri.NPM dropped by 9.2ppts YoY to 17.5%. The decline in GPM was primarily due to 1) the high base in 1H23 contributed by the RMB300m upfront from licensing deals, 2) lower utilisation rate in China facilities following the cancellation of COVID projects, and 3) the ramp-up impact of overseas capacity, which dragged GPM by 5ppts. These pressures were somewhat mitigated by GPM improvements from WBS. The drop in GPM, along with increased SG&A expenses from the company's global expansion and XDC listing, as well as FX losses, led to a more significant decline in NPM.The company's 1H24 revenue was largely flattish YoY. Revenue from XDC external customers surged by 88% YoY, while non-XDC revenue dropped by 9% YoY. Notably, North America revenue saw a significant increase of 28% YoY, now accounting for 58% of total revenue (vs 47% in FY2023). In 1H24, the company added 61 new projects, with half originating from the US. Margin wise, GPM in 1H24 fell by 2.9ppts YoY, primarily due to the high base in 1H23, lower utilisation rate in China facilities, and the ramp-up impact of overseas capacity which resulted in a 5ppts GPM drag, partly offset by the improvement from WBS. However, with the increase in SG&A expenses and loss in FX, attri.NPM recorded a larger decline than GPM. Mgmt. maintains its FY24 guidance, expecting improvements in both revenue and margins in 2H24. Maintain HOLD.
公司的1H24營業收入基本持平，XDC外部客戶的營業收入同比激增88%，而非XDC的營業收入同比下降9%。值得注意的是，北美的營業收入同比顯著增長28%，現佔總營業收入的58%（較FY2023的47%）。在1H24，公司新增了61個項目，其中一半來自美國。在利潤方面，1H24的GPm同比下降了2.9個百分點，主要是由於1H23的高基數，中國設施利用率下降，以及境外產能的啓動影響導致GPm下降了5個百分點，部分被WBS的改善所抵消。然而，隨着銷售和管理費用的增加以及外匯損失，綜合 NPm的下降幅度大於GPm。管理層維持對FY24的指引，預計在2H24營業收入和利潤率均有改善。繼續持有。
Key Factors for Rating
評級的關鍵因素
Revenue largely flattish with decrease in non-XDC. In 1H24, the company achieved revenue of RMB8.57bn, basically flattish YoY. Of the revenue, XDC from external customers soared 88% YoY to RMB1.6bn, accounting for 19% of total, offset by the 9% YoY decrease of non-XDC. Notably, North America revenue increased 28% YoY, now accounting for 58% of total revenue (vs 47% in FY2023), while revenues in the EU and China dropped 27% YoY and 21% YoY, respectively.
營業收入基本持平，非XDC營業收入下降。在1H24，公司實現了85.7億元人民幣的營業收入，同比基本持平。其中，來自外部客戶的XDC同比激增了88%，達到16億元人民幣，佔總收入的19%，而非XDC的營業收入同比下降了9%。值得注意的是，北美的營業收入同比增長了28%，現佔總營業收入的58%（較FY2023的47%），而歐盟和中國的營業收入分別同比下降了27%和21%。
Margins experienced declines. The company's GPM in 1H24 fell by 2.9ppts YoY to 39.1%, and attri.NPM dropped by 9.2ppts YoY to 17.5%. The decline in GPM was primarily due to 1) the high base in 1H23 contributed by the RMB300m upfront from licensing deals, 2) lower utilisation rate in China facilities following the cancellation of COVID projects, and 3) the ramp-up impact of overseas capacity, which dragged GPM by 5ppts. These pressures were somewhat mitigated by GPM improvements from WBS. The drop in GPM, along with increased SG&A expenses from the company's global expansion and XDC listing, as well as FX losses, led to a more significant decline in NPM.
利潤率出現了下滑。公司的1H24 GPm同比下降了2.9個百分點，至39.1%，而綜合 NPm同比下降了9.2個百分點，至17.5%。GPm的下降主要是由於1）1H23的高基數來自許可交易的30000萬人民幣預付款，2）中國設施的利用率下降，隨着COVID項目的取消，以及3）境外產能的啓動影響，使得GPm下降了5個百分點。這些壓力在一定程度上得到了來自WBS的GPm改善的緩解。GPm的下降，加上公司全球擴張和XDC上市導致的銷售和管理費用增加，以及外匯損失，導致了NPm的更大幅度的下降。
Half of newly added projects came from the US. WuXi Bio added 61 new projects in 1H24 (vs 46 in 1H23 and 132 in FY23), with half of these projects coming from the US. The 61 projects include 9 won from competitors, with 8 in clinical stage and 1 in commercial stage. As of 30 June, the company held 56 clinical PhIII projects and 16 non-COVID commercial projects. In July, the company signed 4 additional late clinical stage and commercial projects.
新增項目中有一半來自美國。藥明生物在1H24新增了61個項目（較1H23的46個和FY23的132個），其中一半來自美國。這61個項目中包括9個來自競爭對手，其中8個處於臨床階段，1個處於商業階段。截至6月30日，公司持有56個臨床三期項目和16個非COVID商業項目。7月，公司簽署了4個額外的後期臨床階段和商業項目。
FY24 guidance remains unchanged. Mgmt. maintains its FY24 guidance unchanged, forecasting revenue growth of 5%-10% YoY. Due to the low base in 2H23, and the RMB500m milestone payment from licensing deals expected in 2H24, mgmt. expects both revenue and margins to improve in 2H24.
FY24指導保持不變。管理層將FY24指導保持不變，預計年度營收增長率爲5%-10%。由於2H23的低基數，以及預計2H24將有50000萬人民幣里程碑款項的許可協議，管理層預計2H24的營收和利潤率都將改善。
Key Risks for Rating
評級的主要風險
1) Geopolitical tension; 2) biotech financing pressure; 3) intensified competition; 4) higher-than-expected backlog cancellation rate.
1）地緣政治緊張局勢；2）生物科技融資壓力；3）競爭加劇；4）高於預期的積壓訂單取消率。
Valuation
估值
We adopt DCF model to value WuXi Bio and raised WACC from 11.5% to 12.8% to reflect the increased market risk premium. With terminal growth rate of 3.0% unchanged, we cut TP from HK$14 to HK$12. Maintain HOLD.
我們採用DCF模型對藥明生物進行估值，並將WACC從11.5%上調至12.8%，以反映市場風險溢價的增加。終端增長率保持不變爲3.0%，我們將目標價從港幣14降至港幣12。維持持有評級。
譯文內容由第三人軟體翻譯。
