20250327-招银国际-药明生物-02269.HK-Strong_demand_to_drive_growth_acceleration_in_2025_6页_1mb

WuXi Biologics (2269 HK) Summary

Core Content

WuXi Biologics reported strong financial results for 2024, with revenue growing by 9.6% YoY and adj. net profit rising by 9.0% YoY. The company's performance exceeded the previously provided guidance, indicating a robust recovery and strong demand for its services. The non-COVID revenue segment saw a significant increase of 13.1% YoY, highlighting sustained underlying demand. Management expects revenue growth of 12–15% YoY for 2025, with revenue from continuing operations (excluding the Ireland vaccine business) to increase by 17–20% YoY.

Key Financial Highlights

• Revenue:

  • FY23A: RMB17,034 million
  • FY24A: RMB18,675 million
  • FY25E: RMB21,371 million (14.4% YoY growth)
  • FY26E: RMB24,852 million (16.3% YoY growth)
  • FY27E: RMB29,193 million (17.5% YoY growth)

• Adjusted Net Profit:

  • FY23A: RMB4,784 million
  • FY24A: RMB4,699 million
  • FY25E: RMB5,565 million (16.3% YoY growth)
  • FY26E: RMB6,470 million (16.3% YoY growth)
  • FY27E: RMB7,588 million (17.3% YoY growth)

• Earnings Per Share (EPS):

  • FY23A: RMB1.17
  • FY24A: RMB1.13
  • FY25E: RMB1.36
  • FY26E: RMB1.58
  • FY27E: RMB1.85

• Adjusted EPS:

  • FY25E: RMB1.36 (30.42% higher than previous estimate)
  • FY26E: RMB1.58 (32.26% higher than previous estimate)
  • FY27E: RMB1.85 (25.95% higher than previous estimate)

• Gross Margin:

  • FY23A: 41.97%
  • FY24A: 42.77%
  • FY25E: 43.57%
  • FY26E: 43.57%
  • FY27E: 43.57%

• Operating Margin:

  • FY23A: 28.92%
  • FY24A: 29.83%
  • FY25E: 30.72%

• Adjusted Net Margin:

  • FY23A: 26.03%
  • FY24A: 26.04%
  • FY25E: 25.99%

• Return on Equity (ROE):

  • FY23A: 9.2%
  • FY24A: 10.0%
  • FY25E: 10.7%

Main Points

• Revenue Growth: WuXi Bio's revenue growth accelerated in the second half of 2024, reaching 18.3% YoY, compared to 7.7% in the first half. The company's management forecasts continued growth in 2025 with a 12–15% YoY increase.

• Project Pipeline: The company secured 151 new projects in 2024, representing a 14.4% YoY increase. Total project pipeline expanded to 817 projects, including 21 commercial projects and 66 Ph3 projects. Management believes this pipeline reflects a strong competitive position, with new and total projects representing 50% and 40% of the global market.

• Profitability: WuXi Bio's adj. net profit margin is expected to expand by 60/26/23 basis points in 2025E/26E/27E, respectively. The company's GPM improved by 4.3 percentage points YoY and 3.5 percentage points HoH in 2H24.

• Capital Expenditure: To support international expansion, the company plans to increase Capex by 53.8% in 2025, reaching RMB6.0 billion.

• Earnings Recovery: The company reported a strong earnings recovery in 2H24, with non-COVID revenue growth of 13.1% YoY and significant improvements in operating profit and net profit.

Valuation and Investment Outlook

• Target Price: HK$30.94 (up from previous TP of HK$24.24)
• 12-Month Price Target: 18.1% upside from current price of HK$26.20
• DCF Valuation: The total present value (PV) of the company is estimated at RMB115,117 million, with equity value at RMB118,175 million. Terminal value is estimated at RMB202,212 million, with a terminal growth rate of 2%.

Financial Performance (Growth)

• Revenue Growth:

  • 2022A: 48.4%
  • 2023A: 11.6%
  • 2024A: 9.6%
  • 2025E: 14.4%
  • 2026E: 16.3%
  • 2027E: 17.5%

• Gross Profit Growth:

  • 2022A: 39.2%
  • 2023A: 1.5%
  • 2024A: 12.1%
  • 2025E: 17.2%
  • 2026E: 18.5%
  • 2027E: 19.7%

• Operating Profit Growth:

  • 2022A: 39.5%
  • 2023A: (5.0%)
  • 2024A: 14.0%
  • 2025E: 16.1%
  • 2026E: 19.9%
  • 2027E: 21.0%

• Net Profit Growth:

  • 2022A: 30.5%
  • 2023A: (23.1%)
  • 2024A: (1.3%)
  • 2025E: 20.0%
  • 2026E: 20.8%
  • 2027E: 21.5%

Key Financial Ratios

• P/E (Adjusted):

  • FY23A: 21.6
  • FY24A: 20.8
  • FY25E: 18.0
  • FY26E: 15.5
  • FY27E: 13.2

• P/B:

  • FY23A: 2.8
  • FY24A: 2.3
  • FY25E: 2.0
  • FY26E: 1.8
  • FY27E: 1.5

• P/CFPS:

  • FY25E: 16.0
  • FY26E: 13.5
  • FY27E: 11.6

Analyst Recommendations

• Analyst Rating: BUY (Maintain)
• Reason: The company's strong demand trend, solid earnings recovery, and robust project pipeline support the recommendation. The target price has been raised to HK$30.94, reflecting improved growth and profitability expectations.

Key Figures and Performance

• 1-Month Share Performance: 10.3% (Absolute) / 11.7% (Relative)
• 3-Month Share Performance: 50.1% (Absolute) / 28.4% (Relative)
• 6-Month Share Performance: 89.0% (Absolute) / 60.4% (Relative)
• Market Cap: HK$106,950.9 million
• Average 3-Month Turnover: HK$1,198.0 million
• 52-Week High/Low: HK$28.50 / HK$10.26

Conclusion

WuXi Biologics is experiencing strong growth and profitability improvements, driven by sustained customer demand and strategic investments. The company's management is optimistic about continued expansion and profitability, with a raised target price and positive analyst recommendations. Financial metrics such as revenue growth, gross margin, and operating margin are expected to improve in the coming years, supporting its strong market position.