PHARMARON BEIJING(3759.HK):SIGNS OF RECOVERY EMERGING IN 2Q24
PHARMARON BEIJING(3759.HK):SIGNS OF RECOVERY EMERGING IN 2Q24
Recovery in new orders. The company experienced a recovery in new orders in 1H24, driven by an increase in request for proposals and customer visits. New purchase orders rose 15%+ YoY in 1H24, compared to a 20% YoY increase in 1Q24. Notably, new orders for CMC grew 25%+ YoY in 1H24. Mgmt. expects revenue in 2H24 to increase HoH, maintaining the FY24 growth guidance of 10%+ YoY for revenue, with adj.NPM expected to be 13%+.Pharmaron reported 1H24 revenue of RMB5.6bn, a slight decline of 0.6% YoY, aligning with the upper limit of its profit alert. In 2Q24, with improved global biotech funding, revenue rose 10% QoQ. Adj.NP also saw a recovery, increasing 4% QoQ. Each business segment demonstrated improvement in 2Q, with Lab Services/CMC/Clinical CRO/Biologics & CGT rising by 10%/2%/15%/31% QoQ, respectively. The company experienced a recovery in new orders during 1H24, which grew 15%+ YoY, compared to a 20% YoY increase in 1Q24. Notably, new orders for CMC grew 25%+ YoY in 1H24. Mgmt. expects revenue in 2H24 to increase on a HoH basis, maintaining the FY24 growth guidance of 10%+ YoY for revenue, with adj.NPM expected at 13%+. We believe that signs of recovery observed in 2Q24 will lead to further improved performance in 2H24, primarily driven by the conversion of new orders into revenue. Reiterate BUY.
康龍化成報告了2024年上半年56億元人民幣的營業收入，同比微降0.6％，與其利潤預警的上限相符。在2024年第二季度，隨着全球生物科技資金的改善，營業收入環比增長了10％。調整後淨利潤也有所恢復，環比增長了4％。每個業務領域在第二季度均表現出改善，實驗室服務/CMC/臨床CRO/生物製品、CGt環比分別增長了10％/2％/15％/31％。公司在2024年上半年經歷了新訂單的復甦，同比增長了15％以上，而2024年第一季度同比增長了20％。值得注意的是，CMC的新訂單同比增長了25％以上。管理層預計2024年下半年的營業收入將環比回升，維持2024年營業收入同比增長10％以上的增長預期，調整後淨利潤預計爲13％以上。我們相信，2024年第二季度觀察到的復甦跡象將導致2024年下半年的進一步改善業績，主要受到新訂單轉化爲營業收入的推動。再次建議買入。
Key Factors for Rating
評級的關鍵因素
2Q24 shows sequential improvements. Pharmaron reported 1H24 revenue of RMB5.6bn, a slight decline of 0.6% YoY, aligning with the upper limit of its profit alert. In 2Q24, with improved global biotech funding, revenue rose by 10% QoQ to RMB2.9bn. The decline in adj.NP by 26% YoY in 1H24 was influenced by factors such as slightly reduced revenue, increased hiring in 2H23, additional syndicated loans at YE23, and the commencement of new production capacities. However, adj.NP saw a recovery in 2Q24, rising 4% QoQ.
2024年第二季度顯示出順序改善。康龍化成報告了2024年上半年56億元人民幣的營業收入，同比微降0.6％，與其利潤預警的上限相符。在2024年第二季度，隨着全球生物科技資金的改善，營業收入環比增長了10％，達到了29億元人民幣。2024年上半年調整後淨利潤同比下降了26％，受到輕微減少的營業收入、2023年下半年增加的招聘、2023年年末額外的貸款和新生產能力的啓動等因素的影響。然而，2024年第二季度調整後淨利潤環比增長了4％。
Recovery in new orders. The company experienced a recovery in new orders in 1H24, driven by an increase in request for proposals and customer visits. New purchase orders rose 15%+ YoY in 1H24, compared to a 20% YoY increase in 1Q24. Notably, new orders for CMC grew 25%+ YoY in 1H24. Mgmt. expects revenue in 2H24 to increase HoH, maintaining the FY24 growth guidance of 10%+ YoY for revenue, with adj.NPM expected to be 13%+.
新訂單的復甦。公司在2024年上半年經歷了新訂單的復甦，這是由於提案請求和客戶訪問的增加所驅動的。2024年上半年新的採購訂單同比增長了15％以上，而2024年第一季度同比增長了20％。值得注意的是，CMC的新訂單同比增長了25％以上。管理層預計2024年下半年的營業收入將環比回升，維持2024年營業收入同比增長10％以上的增長預期，調整後淨利潤預計爲13％以上。
Stable US revenue, growth in Europe. 1H24 North American revenue remained stable, down just 0.2% YoY, representing 65% of total revenue. European revenue increased by 10% YoY, accounting for 17% of total revenue, while revenue from China declined by 13% YoY, making up 15% of total revenue.
美國營收穩定，歐洲增長。2024年上半年北美營收保持穩定，同比微降了0.2％，佔總營收的65％。歐洲營收同比增長了10％，佔總營收的17％，而中國營收同比下降了13％，佔總營收的15％。
Each business segment demonstrated improvement. 1) Lab Services: Revenue reached a record high of RMB3.4bn in 1H24, a slight decrease of 0.3% YoY, but up 10% QoQ in 2Q24, driven by new purchase order growth. 2) CMC: Revenue was RMB1.2bn, down 6% YoY in 1H24, but up 2% QoQ in 2Q24. The segment is expected to grow significantly in 2H24 with more project deliveries. 3) Clinical CRO: Revenue reached RMB843m in 1H24, a 5% YoY increase, with 2Q24 revenue rising 15% QoQ, driven by improved customer recognition. 4) Biologics and CGT: 1H24 revenue was RMB211m, up 6% YoY, and 2Q24 revenue grew 31% QoQ, supported by enhanced production capacity.
每個業務板塊都有所改善。1）實驗室服務：1H24營業收入創下了創紀錄的34億元人民幣，同比略微下降0.3%，但2Q24環比增長10%，受到新採購訂單增長的推動。2）CMC：1H24營業收入爲12億元人民幣，同比下降6%，但環比增長2%。預計該板塊在2H24將有明顯增長，提供更多項目交付。3）臨床CRO：1H24營業收入達到84300萬人民幣，同比增長5%，2Q24營業收入環比增長15%，受到客戶認可度的提高推動。4）生物製品與CGT：1H24營業收入爲21100萬人民幣，同比增長6%，2Q24營業收入環比增長31%，得到增強的生產能力的支持。
Key Risks for Rating
評級的主要風險
1) Tightening biotech funding; 2) geopolitical risks; 3) slower-than-expected ramp-up for overseas operations and new businesses.
1）生物科技融資趨緊；2）地緣政治風險；3）海外業務和新業務的推動速度低於預期。
Valuation
估值
Maintain BUY and DCF-TP of HK$13 (WACC: 12.0%, terminal growth: 3.5%).
保持買入評級，目標價HK$13 (WACC: 12.0%，終端增長率: 3.5%)。
譯文內容由第三人軟體翻譯。
