【行业研究报告】药明生物-Strong and sustainable non-COVID growth

类型: 港股公司研究

机构: 招银国际

发表时间: 2023-03-01 00:00:00

更新时间: 2023-03-01 18:10:54

1Mar20231Mar2023CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateWuXiBiologics(2269HK)Strongandsustainablenon-COVIDgrowthWuXiBiopreviouslyreleasedapositiveprofitalertfor2022earnings,expectingrevenuetogrow~48.4%YoY,attributablenetprofittogrow~30%YoYandadjustednon-IFRSnetprofittogrow47%YoY.Excluding~RMB3bnCOVIDrevenue,weexpectnon-COVIDrevenuetogrowby~68.3%YoYin2022.TheCompanyhaswellexecutedonitscapacityexpansionplanbybringingIrelandandShijiazhuangsitesonlinein4Q22.Expectingsustainablenon-COVIDrevenuegrowthdrivenbyfastincreasingCMOrevenueandwidercollaborationwithgloballargepharmaclients,weforecastWuXiBio’srevenuetoincreaseby31.5%/29.3%YoYandadjustednetincometoincreaseby30.2%/28.9%YoYin2023/24E,respectively.Globalhealthcarefundingshowsearlysignsofrecoverywhilethetrendisyettobeconfirmed.AccordingtoVBDATA,globalhealthcarefundingdecreasedby43%YoYin2022whilefundinginChinashrankby54%YoY.Althoughsomesmall-tomid-sizedpharmaceuticalcompanieswereforcedtoassesstheirR&Dspendingmorecarefully,R&Ddemandfrombigpharmacompaniesmaintainedahealthylevel.ItisworthnotingthatsomeforeignCXOcompaniessignalledearlysignsofdemandrecoveryatthepoint.Forinstance,IQVIAindicatedthatitsrequestforproposalsacceleratedto22%YoYgrowthin4Q22vs12%YoYgrowthinfull-year2022.WebelievetopplayerssuchasWuXiBiowillbelessimpactedbythedemandcyclethankstoitssuperiorclientmixandstrongbargainingpowertoclients.Givenitsabundantbacklogathand(US$18.5bnasofJun2022)andthefastincreasingnumberofCMOprojects,weexpectWuXiBiowillmaintainstrongrevenuegrowthmomentum.Newproductionsitesonlinetomeetthegrowingdemand.2022markedabigleapinmanufacturingcapacityforWuXiBio.MFG7siteinIrelandandMFG8siteinShijiazhuang,eachwithacapacityof48kL,wereGMPreleaseinDecandOct2022,respectively.Asacomparison,totalcapacityofWuXiBiowas154kLasofend-2021.WuXiBioalsoannouncedtoinvestUS$1.4bninnext10yearstobuildfull-suiteCRDMOfacilitiesinSingapore,whichwillbringanadditionalcapacityof120kLby2026.Thewell-establishedglobalnetworkwillenableWuXiBiotobettermeetthediversifieddemandofglobalclientsandmitigatepotentialgeopoliticalrisks,inourview.MaintainBUY.WecutourTPfromHK$120.39toHK$96.55,basedona10-yearDCFmodel(WACC:10.17%,terminalgrowthrate:3.0%).Reflectingourconservatismonglobalfundingrecovery,weforecastWuXiBio’srevenuetoincreaseby31.5%/29.3%YoYandadjustednetincometoincreaseby30.2%/28.9%YoYin2023/24E,respectively.Specifically,weassumelimitedCOVIDrevenueand~63.7%YoYgrowthofnon-COVIDrevenueinourrevenuegrowthprojectionfor2023E.TargetPriceHK$96.55(PreviousTPHK$120.39)Up/Downside76.5%CurrentPriceHK$54.70ChinaHealthcareJillWU,CFA(852)39000842jillwu@cmbi.com.hkBenchenHUANG,CFAhuangbenchen@cmbi.com.hkStockDataMktCap(HK$mn)231,308.3Avg3mthst/o(HK$mn)60.552wHigh/Low(HK$)83.25/35.50TotalIssuedShares(mn)4228.7Source:FactSetShareholdingStructureWuXiBiologicsHoldings13.8%JPMorgan7.0%Source:HKExSharePerformanceAbsoluteRelative1-mth-16.2%-7.5%3-mth9.1%2.5%6-mth-21.5%-20.9%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(RMBmn)5,61210,29015,27120,08625,970YoYgrowth(%)40.983.348.431.529.3Adjustednetprofit(RMBmn)1,7223,3164,8786,3538,191EPS(Adjusted)(RMB)0.440.791.151.501.94ConsensusEPS(RMB)nana1.131.522.02P/E(x)109.6114.446.537.129.8P/B(x)8.911.95.64.94.2ROE(%)10.213.313.314.715.8Netgearing(%)(21.8)(19.3)(15.3)(11.3)(11.1)Source:Companydata,Bloomberg,CMBIGMestimates