20230904-招银国际-昭衍新药-06127.HK-New_orders_slightly_recovered_in_2Q23_5页_1mb

报告摘要

Revenue and Net Income (H123): Revenue increased by 30% YoY to RMB1,012mn, while attributable net income declined by 76% YoY to RMB91mn. Revenue accounted for 34% of the full-year estimate, aligning with historical averages, but net income was lower primarily due to a RMB199mn fair value loss from biological assets. Core laboratory services contributed a net profit of RMB195mn, up 31% YoY.
New Orders and Backlogs: New orders fell ~35% YoY to RMB1.3bn, reflecting weak preclinical R&D demand in China, but grew 31% QoY in Q223 to ~RMB750mn, suggesting improving demand. Total backlogs decreased to RMB3.9bn as of June 2023.

Globalization Focused: Management aims to expand market share through US operations and M&A opportunities in Europe/US. US subsidiary Biomere showed resilience with 16% YoY new orders growth, and Chinese facilities passed FDA GLP inspections, enabling global service provision.
Market Challenges: Gross profit margin dropped 4.6ppt YoY to 44.0%, amid lower pricing of clinical CRO services and US facility underutilization, despite a conservative management view.

BUY Rating Retained: With a revised target price of HK$24.51, down from HK$32.55, reflecting lower earnings projections. Forecasts for 2023E-25E: revenue grows at 22.4%, 21.0%, 27.6%, and net income at (-61.6%), 93.0%, 35.8% YoY. Gross margin and operating margin margins declined YoY, showing pressure on profitability.

Revenue growth has slowed in 2023E-25E forecasts due to challenging conditions, while net margin showed slight improvement in EPS consensus. DCF valuation at HK$24.51 is supported, but down from previous estimates.

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