20240328-招银国际-药明生物-02269.HK-Expand_overseas_capacity_to_mitigate_risks_6页_1mb

Summary of WuXi Biologics (2269 HK) Report

The report analyzes WuXi Biologics for investment decision-making. Key points:

1. Recommendation: Maintain BUY.
2. Target Price (TP): HKD 18.32 (down 33.1% YoY/YTD).
3. 2023 Performance:
   • Revenue increased 11.6% YoY to RMB 17.03bn.
   • Adjusted attributable net income increased 4.6% YoY to RMB 4.70bn.
   • Non-COVID revenue surged without COVID-19 impact guidance provided. Excluding COVID revenue, adjusted net income was down by 4.6%.
   • Topline in-line with estimates.
4. Outlook (2024E):
   • Total revenue growth: 5-10% YoY.
   • Non-COVID revenue growth: 8-14% YoY.
   • Strong performance anticipated from recovery in global biotech funding and European market growth.
5. Post-COVID Demand: Demonstrated solid client demand for its services.
6. Geographic Expansion: Significant growth "winning the molecule" platform. Revenue from Europe climbed 101.9% YoY, now contributing 30.2% to total revenue. Management aims to reduce reliance on the US market by expanding in Europe.
7. Share Buyback: Announced HK$10bn share repurchase plan. Completed HK$972mn (approx.) buybacks, expressing confidence.
8. Financials (2023E/24E):
   • Adjusted Net Profit Margin: 28.4% (2023A) rising to an estimated 28.2% (2024E).
   • Adjusted EPS (RMB): Expected ~10.4x (2024E) to reach target price (HK$18.32).
   • Market cap (as of 28 Mar 23): ¥58.59bn.
9. Valuation Method: 8-year DCF model (WACC 10.95%, terminal growth 2.0%).
10. Actions: Share repurchase program continues expected.

The analysis concludes recommending the company based on solid demand, expansion, and execution, despite the significant target price reduction.