20260401-招银国际-康龙化成-300759.SZ-Landmark_CDMO_deal_to_fuel_future_growth_6页_751kb

Pharmaron Beijing (300759 CH) Summary

Core Business Performance

Pharmaron Beijing reported strong financial results for 2025, with revenue growing by 14.8% YoY to RMB14.10bn, and non-IFRS adjusted net profit increasing by 13.0% YoY to RMB1.82bn. Both metrics showed meaningful acceleration compared to 2024, with revenue and profit coming in slightly above expectations. The company expects 12-18% YoY revenue growth in 2026, though this guidance includes a 3% negative FX impact.

The company's global Top20 pharma clients drove 29.4% YoY revenue growth, significantly outperforming the overall growth. European clients also contributed 27.4% YoY growth, reflecting the effectiveness of go-to-market strategies and progress in CDMO projects. Newly signed orders increased by over 14% YoY, continuing the robust growth trend that saw a >20% YoY increase in 2024.

• Lab services new bookings grew by ~12% YoY.
• Small molecule CDMO new orders increased by ~13% YoY.
• Clinical development segment saw new orders outpacing the company's average, indicating stabilization and early recovery in domestic clinical demand and growing market share.

Key CDMO Breakthroughs

Pharmaron made a pivotal breakthrough in small molecule CDMO with a commercial DP agreement with Eli Lilly for the oral GLP-1 drug Orforglipron, a potential blockbuster. Under this agreement, Eli Lilly will invest USD200mn to support Pharmaron's technical capabilities, which could further expand collaboration. This partnership is a significant endorsement of the company's CDMO platform and is expected to generate incremental revenue in the future.

Pharmaron has also established commercial API capabilities, with its API facilities in Shaoxing and Ningbo passing FDA inspections and the first innovative API project in the US approved in 4Q25. These developments are expected to drive faster growth in small molecule CDMO compared to other business lines over the next three years.

Investment Recommendation

• Maintain BUY rating.
• Target Price raised from RMB38.08 to RMB39.00 (based on DCF model, WACC of 9.32%, terminal growth of 2.0%).
• Current Price: RMB27.98.
• Up/Downside: 39.4%.

Financial Projections (FY26E–FY28E)

Valuation and Sensitivity Analysis

• DCF Valuation (RMB mn): 73,836 (based on 2026E–2028E projections and terminal value of 122,306).
• Sensitivity Analysis shows that the target price is sensitive to changes in WACC and terminal growth rate.

Financial Highlights

• Gross margin increased from 34.8% (2025A) to 37.5% (2028E).
• Operating margin rose from 15.2% (2025A) to 15.2% (2028E).
• Adjusted net profit margin improved from 12.9% (2025A) to 13.5% (2028E).
• ROE increased from 11.6% (2025A) to 14.3% (2028E).

Liquidity and Leverage

• Net debt to equity ratio decreased from 0.3 (2024A) to 0.0 (2028E).
• Current ratio improved from 0.9 (2025A) to 1.2 (2028E).
• Receivable turnover days remained stable at 66.5.
• Inventory turnover days remained stable at 51.4.
• Payable turnover days remained stable at 51.6.

Shareholding and Stock Data

• Market Cap: RMB51,407.2 mn.
• Avg 3 mths t/o: RMB678.9 mn.
• 52w High/Low: RMB35.90 / RMB22.06.
• Total Issued Shares: 1,837.3 mn.
• HK investors: 20.0%.
• De Facto Controllers: 18.2%.

Risk and Disclaimer

• The report contains investment risks and is not tailored for all investors.
• Past performance does not guarantee future results.
• CMBIGM is not liable for any loss or damage arising from reliance on the report.
• The report is for informational purposes only and does not constitute an offer or solicitation to buy or sell any security.

Analyst Certification

• The analyst certifies that the views expressed reflect personal opinions and are not influenced by compensation.
• The analyst confirms no trading in the stock 30 days prior to the report's issue and no trading for 3 business days after.
• No financial interest in the companies discussed.

CMBIG Ratings

• BUY: Stock with potential return of over 15% over the next 12 months.
• HOLD: Stock with potential return of +15% to -10% over the next 12 months.
• SELL: Stock with potential loss of over 10% over the next 12 months.
• NOT RATED: Stock not rated by CMBIGM.
• OUTPERFORM: Industry expected to outperform the market.
• MARKET-PERFORM: Industry expected to perform in line with the market.
• UNDERPERFORM: Industry expected to underperform the market.

CMB International Global Markets Limited

• Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong.
• Tel: (852) 3900 0888.
• Fax: (852) 3900 0800.
• CMBIGM is a wholly owned subsidiary of CMB International Capital Corporation Limited, which is a wholly owned subsidiary of China Merchants Bank.