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WuXi PharmaTech (603259) Company Comments: Performance Exceeds Expectations Each Segment Maintains Strong Growth


WuXi PharmaTech (603259) Company Comments: Performance Exceeds Expectations Each Segment Maintains Strong Growth
Event: WuXi AppTec released its 2019 Interim Report and achieved operating income of 58.0.94 million yuan, an increase of 33 in ten years. 68%; net profit attributable to mother 10.5.7 billion, a decrease of 16 a year.91%; adjusted non-IFRS net profit attributable to the parent11.79 trillion, an increase of 32 in ten years.0%. Revenue growth exceeded expectations, and revenue growth accelerated significantly in the second quarter.Operating income in the first half of 2019 increased by 33.68%; single-quarter revenue in the second quarter increased by 37 each year.82%, the fastest fastest-growing quarter of expected revenue.All business segments of the company maintained a strong development momentum.The laboratory business in China is growing by 23 annually.70%, CDMO business grows 42.03%, the laboratory business in the US area is growing by 29% every year.98%, clinical research 杭州桑拿网 and other CRO services increased by 104.twenty two%.Attributable net profit fell by 16.9% to 10.The USD 5.7 billion was mainly due to the reported performance, and the fair value change of the investment target of the company lost 0.5.5 billion US dollars, and the same period last year realized fair value gains.3.2 billion.Subverting the impact of changes in the fair value of the investment target, the increase in net profit attributable to the parent 32.4%.The increase in non-IFRS net profit attributable to the parent more than 32 reflects the adjusted profitability of the company’s main business.0%, significantly faster than last year. Each segment maintained a strong growth trend, and the “integration, end-to-end” R & D platform increased synergy.The company’s laboratory services in China realized revenue of RMB 29.89 杭州夜网论坛 ppm, an increase of 23 in ten years.70%; the company’s synthetic DNA-encoded compound library (DEL) has approximately 90 billion compound molecules, enabling more and more global customers; the company leverages the advantages of an integrated platform to synthesize APIs and develop formulations through the WuXi IND service platform, Drug efficacy, pharmacokinetics, safety evaluation, and application information writing and delivery are integrated together to provide customers with new drug R & D and global application integration services to accelerate customer new drug development progress.In the first half of the year, we helped customers complete the IND application of 10 research new drugs, and obtained clinical trial approvals (CTA) for 11 projects.The company’s CDMO / CMO services achieved operating income of RMB17.180,000 yuan, an increase of 42 in ten years.03%; In the first half of 2019, the company’s CDMO / CMO service project involved more than 800 new drug molecules, of which 40 were in clinical phase III, and 16 were approved for marketing.The company’s US laboratory services realized revenue of RMB 7.100,000 yuan, an increase of 29 in ten years.98%; As of June 30, 2019, the company provided CDMO services for 30 clinical stage cell and gene therapy projects, including 21 phase I clinical trial projects and 9 phase II / III clinical trial projects.Medical device testing services. By integrating and strengthening the management of sales teams, the company actively expands new customer groups and effectively improves the success rate of customer signings, and seizes the possibility of the development of EU medical device regulations to improve the standards and restrictions of medical device certification standards.Promote rapid revenue growth.The company’s clinical research and other CRO services realized revenue of RMB4.72 ppm, a 104-year increase of 104.22%, since the acquisition of clinical trial CRO company Wuxi Clinical Development Co., Ltd. (Research Point Global) in 2018, the company has assisted several customers to conduct clinical trials at home and abroad.In May 2019, the company acquired clinical research data statistical analysis service company Pharmapace, Inc.To further enhance the global clinical trial service capabilities of innovative drugs.Excluding mergers and acquisitions, the company’s clinical research and other CRO services revenue further increased 67.68%. In the first half of 2019, the company’s overall gross profit margin was 38.78%, a decrease from the same period last year.29 points.Mainly due to the company’s increased incentives for key talents, including shared incentive plans, the cost increased by $ 3,323 million compared with the same period last year; the revenue from the lower-grossing clinical business replacement fee income increased significantly with the expansion of the business scale, reducing the overall gross profit margin.Management and R & D expense ratios have increased.Management and R & D expense ratio 15.26%, an annual increase of 1.54pct, mainly due to the company’s increased R & D investment and increased incentive costs.The sales expense ratio remained basically stable compared with the same period.Sales expense ratio in the first half of 20193.54%, rising by 0 every year.08 points.The financial expense ratio decreased significantly due to the interest income brought by the new stock financing; from 1.36% canceled 0 in the first half of 2019.29%.Net cash flow from operating activities 9.79 trillion, an increase of 96 in ten years.45%.The strong growth of various business segments led to the increase in net cash received from sales of goods, provision of labor services to purchase of goods, and acceptance of labor service payments. Corporate customers continue to increase.In the first half of 2019, there were more than 600 new customers and more than 3,600 active customers.The company takes full advantage of the “integrated, end-to-end” R & D service platform, strengthens customer conversion between upstream and downstream service departments, continuously expands services, and further enhances synergy between various business segments. Unicorn of innovative pharmaceutical industry chain, with global competitiveness, strong internal growth momentum!The proportion of innovative drug research and development scale continues to increase, the expansion of pharmaceutical service to China, the breakthrough of domestic innovative drug services, and the industry is expected to maintain a continuous growth of about 20%.The company is one of the best companies in the global service outsourcing industry; the company stands out from the fully competitive market of global pre-clinical CROs, and has become one of the most comprehensive leaders in the global pharmaceutical outsourcing service industry.With strong competitiveness.The company covers the most long-tail customers, and the number of new customer developments continues to grow.At present, it has the world’s most pre-clinical CRO projects and is included in the clinical stage CRO. With the enhancement of CDMO capabilities, customer retention can bring rapid internal growth.Participate in innovative drug projects through venture capital and DDSU models, provide more professional analysis and forecasting, provide R & D services and diversify investment, reduce risks and increase endogenous returns. Earnings forecast and estimation: We forecast the operating income for 2019-2021 to be 127.8.4 billion, 164.5.5 billion and 211.08 million yuan, an increase of 32 in ten years.97%, 28.72% and 28.28%, net profit attributable to mother is 22.7.2 billion, 29.53 ppm and 39.12 ppm, an increase of 0 in ten years.50%, 30 after adjustment.01% and 32.44%.The company’s income is expected to maintain a rapid growth trend, but the net profit and profit return to the mother will not be able to grow at the same time as the income.Keeping up with incomes and maintaining high growth.The current corresponding PE in 2019 is 53 times. It is considered that the company is an innovative drug industry chain company with the strongest innovation ability; the industry is in a high prosperity, and the company’s industry leader is stable. Related domestic comparable companies can give estimated premiums.Maintain “Buy” rating. Risk reminder: the risk of intensified market competition in the pharmaceutical R & D service industry; safety and environmental protection risks in the drug production process; technical risks in the contract execution process; exchange rate fluctuation risks