20230301-招银国际-药明生物-02269.HK-Strong_and_sustainable_non-COVID_growth_7页_1mb

报告摘要

WuXi Biologics (2269 HK) Summary

Core Content

WuXi Biologics is a leading contract research organization (CRO) and contract manufacturing organization (CMO) in the global biopharmaceutical industry. The company has demonstrated strong and sustainable non-COVID growth, with significant capacity expansion and a robust backlog of projects. Despite global healthcare funding challenges in 2022, the company is well-positioned to benefit from the recovery of the pharmaceutical industry and its strong client relationships.

Main Points

Revenue Growth: WuXi Bio expects non-COVID revenue to grow by ~68.3% YoY in 2022, excluding ~RMB3bn in revenue from the pandemic. For 2023 and 2024, the company forecasts revenue growth of 31.5% and 29.3% YoY, respectively, and adjusted net income growth of 30.2% and 28.9% YoY.
Capacity Expansion: In 2022, WuXi Bio launched two new production sites, MFG7 in Ireland and MFG8 in Shijiazhuang, each with a capacity of 48k L. The company also plans to invest US$1.4bn over the next 10 years to build CRDMO facilities in Singapore, adding 120k L of capacity by 2026.
Global Healthcare Funding: Global healthcare funding dropped by 43% YoY in 2022, while China's funding declined by 54% YoY. However, large pharmaceutical companies maintained healthy R&D spending, and some foreign CXO companies signaled early signs of recovery.
Client Demand: WuXi Bio's strong client mix and bargaining power with global large pharma clients help it remain less affected by the demand cycle. The company has a substantial backlog of US$18.5bn as of June 2022, supporting its revenue growth.
Valuation: The company's target price was reduced from HK$120.39 to HK$96.55 based on a 10-year DCF model with a WACC of 10.17% and a terminal growth rate of 3.0%. The current price is HK$54.70, and the price target suggests a potential upside of 76.5%.

Key Information

Financial Performance:
- Revenue increased from RMB5,612 million in FY20A to RMB15,271 million in FY22E, with YoY growth rates of 40.9%, 83.3%, and 48.4% respectively.
- Adjusted net profit grew from RMB1,722 million in FY20A to RMB4,878 million in FY22E, with YoY growth of 30.2% in FY23E and 28.9% in FY24E.
- EPS (adjusted) rose from RMB0.44 in FY20A to RMB1.15 in FY22E, with projections of RMB1.50 in FY23E and RMB1.94 in FY24E.
Valuation Metrics:
- P/E ratio decreased from 109.6 in FY20A to 46.5 in FY22E, with further declines to 37.1 and 29.8 in FY23E and FY24E, respectively.
- P/B ratio dropped from 11.9 in FY21A to 5.6 in FY22E, with further reductions to 4.9 and 4.2 in FY23E and FY24E.
- ROE increased from 10.2% in FY20A to 13.3% in FY21A, with projections of 14.7% in FY23E and 15.8% in FY24E.
Market Position:
- WuXi Bio's global network and diverse client base help it mitigate geopolitical risks and support sustained growth.
- The company is expected to maintain a strong revenue growth momentum due to its backlog and increasing CMO projects.

Analyst Ratings

CMBIGM Rating: BUY
Target Price: HK$96.55
Potential Return: Over 15% over the next 12 months

Shareholding and Stock Data

Market Cap: HK$231,308.3 million
Average 3-Month Trading Volume: HK$60.5 million
52-Week High/Low: HK$83.25 / HK$35.50
Total Issued Shares: 4,228.7 million
Shareholding Structure:
- WuXi Biologics Holdings: 13.8%
- JP Morgan: 7.0%

Share Performance

1-Month: -16.2% (Absolute), -7.5% (Relative)
3-Month: +9.1% (Absolute), +2.5% (Relative)
6-Month: -21.5% (Absolute), -20.9% (Relative)

Financial Summary

Metric	FY20A	FY21A	FY22E	FY23E	FY24E
Revenue (RMB mn)	5,612	10,290	15,271	20,086	25,970
Adjusted Net Profit (RMB mn)	1,722	3,316	4,878	6,353	8,191
Adjusted EPS (RMB)	0.44	0.79	1.15	1.50	1.94
P/E (x)	109.6	114.4	46.5	37.1	29.8
P/B (x)	8.9	11.9	5.6	4.9	4.2
ROE (%)	10.2	13.3	13.3	14.7	15.8
Net Gearing (%)	-21.8	-19.3	-15.3	-11.3	-11.1

Analyst Certification

The research analyst certifies that the views expressed reflect their personal opinions and that their compensation is not directly or indirectly related to the specific views in this report.
The analyst confirms no trading or dealing in the stocks covered within 30 days prior to the report's issue and will not do so for 3 business days after the issue.