Investment Rating - The report maintains a neutral rating for WuXi Biologics (2269 HK) with a target price of HKD 12.30, indicating a potential upside of 18.3% from the current closing price of HKD 10.40 [1][2][6]. Core Views - The company's 1H24 performance met expectations, with revenue growth of 1.0% year-on-year, excluding COVID-related revenue, which reflects a growth of 7.7%. However, the adjusted net profit decreased by 20.7% due to high base effects from 1H23 and increased SG&A expenses [1][2]. - The report highlights that the short-term uncertainties in the industry and external environment remain significant risks, leading to a downward revision of the earnings forecast for 2024-2026 by 4-19% [1][2]. - The company expects to receive approximately RMB 500 million in large payments in 2H24, which is anticipated to improve operational efficiency and revenue growth in the latter half of the year [1][2]. Financial Summary - Revenue projections for 2024E are set at RMB 17,989 million, with a decrease of 0.8% from previous estimates. For 2025E and 2026E, revenues are projected at RMB 20,710 million and RMB 23,701 million, reflecting decreases of 9.0% and 8.3% respectively [2][7]. - The adjusted net profit for 2024E is forecasted at RMB 5,019 million, down 3.6% from prior estimates, with further declines of 18.6% and 17.5% for 2025E and 2026E [2][7]. - The gross profit margin is expected to decline to 39.1% in 2024E, down from 41.6% in the previous forecast, indicating a decrease of 2.5 percentage points [2][7]. Order and Capacity Utilization - In 1H24, the company secured 61 new orders, with a strong momentum in late-stage projects, including 9 "winning molecule" projects. The company anticipates signing additional contracts by the end of the year [1][2]. - The report notes that the capacity utilization rate is expected to improve steadily, particularly with the ramp-up of production in Ireland, which is projected to break even by 1H25 and achieve an 80% utilization rate by 2026 [1][2].
药明生物：1H24业绩符合预期但短期不确定性仍存，维持中性评级