研究报告全文：MN24Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateWuXiBiologics2269HKStrongercompetencyforabrighterfutureTargetPriceHK8193WuXiBioreported2022revenueofRMB153bnup484YoYandattributablePreviousTPHK9655adjustednetincomeofRMB49bnup485YoYNon-COVIDrevenuegrewbyUpDownside616628YoYtoRMB120bnaccountingfor785oftotalrevenuein2022CurrentPriceHK5070Adjustedgrossprofitmarginwasmaintainedatastablelevelof500in2022vs506in2021despitethenewly-operationalcapacityduring2022indicatingChinaHealthcareahighutilizationofexistingfacilitiessuccessfulintegrationofacquiredfacilitiesJillWUCFAefficientramp-upofnewcapacitiesandefficiencyimprovementfromthe85239000842deploymentofWBSWuXiBiologicsBusinessSystemDrivenbythejillwucmbicomhkcontinuouslygrowingpipelinetotalbacklogsreachedUS206bnasofDec2022increasingby513YoYItwasquiteanimpressivegrowthconsideringBenchenHUANGCFAhuangbenchencmbicomhktheveryhighbasein2021WuXiBiomanagementexpecteda30YoYgrowthforrevenueand26YoYgrowthforadjustednetincomein2023ELookingintoStockDataalongertermmanagementanticipatedrevenuetogrowataCAGRof30andMktCapHKmn2082195adjustednetincomeat26-27over2022-25EindicatingtheirconfidenceinAvg3mthstoHKmn606WuXiBiosgrowthvisibility52wHighLowHK83253550TotalIssuedSharesmn41727SourceFactSetStrongpipelineexpansiondemonstratingstrongercompetencyinglobalShareholdingStructurebiologicsCRDMOmarketWuXiBiospipelinecontained588integratedWuXiBiologicsHoldings138projectsasofDec2022vs480asofDec2021including37inphase3andJPMorgan7017incommercialstageofwhich11werenon-COVIDprojectsTheCompanySourceHKExadded136newintegratedprojectsin2022comparedwith138in2021andSharePerformancelessthan60eachyearin20171819Amongthe136newprojects50wereAbsoluteRelativefromNorthAmericamarketWethinkthesolidincreaseofintegratedprojects1-mth-91-52wellshowcasedWuXiBioshighmarketrecognitionandclienttrustamidthe3-mth-47-43temporaryfinancingshortageanduncertaingeopoliticalenvironment6-mth47-30AccordingtodataprovidedbytheCompanyWuXiBiorankedNo2inglobalSourceFactSetbiologicsoutsourcingmarketbyrevenuein2022withamarketshareof12-mthPricePerformance128whileTop6playersaggregatelytook656marketshareWeseethoseleadingbiologicsCDMOstofurthergainmarketshareinthefuturegiventhenatureofmarketcompetitionNewproductionsitesonlinetosupportsustainablegrowth2022markedabigleapinmanufacturingcapacityforWuXiBioMFG7inIrelandandMFG8inShijiazhuangeachwithacapacityof48kLwereGMPreleaseinDecandSourceFactSetOct2022respectivelyThisledtoatotalcapacityto262kLasofend-2022vs154kLasofend-2021IntermsofglobalizationWuXiBioannouncedplantobuildCRDMOfacilitiesinSingaporebringinganother120kLcapacityby2026TosupportcapacityexpansiontheCompanyinvestedRMB54bninCapexin2022andexpectedtomaintainCapexatRMB60bninnexttwoyearsAwell-establishedglobalnetworkwillenableWuXiBiotobettermeetthediversifieddemandofglobalclientsandmitigatepotentialgeopoliticalrisksMaintainBUYWerevisedourTPfromHK9655toHK8193basedona10-yearDCFmodelWACC1017terminalgrowthrate30WeforecastWuXiBiotogrowrevenueby303299304YoYandadjustednetincomeby253272270YoYin2023E24E25ErespectivelyEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn1029015269198902584433693YoYgrowth833484303299304AdjustednetprofitRMBmn33164925617378509970EPSAdjustedRMB079118146186236ConsensusEPSRMBnana149198309AdjustedPEx542365295232183SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANT1DISCLOSURESONLASTPAGEMOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk24Mar2023Figure1EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue1989025844336932008625970na-098-049naGrossProfit83541059613646863710908na-328-285naOperatingProfit53726625861361767760na-1302-1463naAdjustednetprofit61737850997063538191na-283-416naAdjustedEPSRMB146186236150194na-283-416naGrossMargin42004100405043004200na-100ppt-100pptnaOperatingMargin27012564255630752988na-374ppt-425pptnaAdjustednetmargin31043038295931633154na-059ppt-116pptnaSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue198902584433693207032757535626-393-628-543GrossProfit8354105961364693501248515944-1066-1513-1442OperatingProfit5372662586136742910411921-2032-2723-2775Adjustednetprofit6173785099706477858410661-469-855-648AdjustedEPSRMB146186236149198309-216-643-2357GrossMargin420041004050451645284476-316ppt-428ppt-425pptOperatingMargin270125642556325733023346-556ppt-738ppt-790pptAdjustednetmargin310430382959312931132992-025ppt-075ppt-033pptSourceCompanydataCMBIGMestimatesFigure3Valuationonrisk-adjustedDCFvaluationDCFValuationinRMBmn2023E2024E2025E2026E2027E2028E2029E2030E2031E2032EEBIT607281551014313237171422202728084355274458655510Taxrate1508150815081508150815081508150815081508EBIT1-taxrate51566926861411241145571870623850301703786347140DA1172136315481997255632464089511263397797-Changeinworkingcapital3921605205826553398431654386798842910368-Capex6500650065005850526547394265383834543109FCFF5641841603473384491289718237246463231941460Terminalvalue596004Terminalgrowthrate300WACC1017CostofEquity1335CostofDebt500EquityBeta090RiskFreeRate300MarketRiskPremium1150TargetDebttoAssetratio3500EffectiveCorporateTaxRate1500TerminalvalueRMBmn226367TotalPVRMBmn292732NetdebtRMBmn1744EquityvalueRMBmn294476ofsharesmn4229PricepershareRMBpershare6964PricepershareHKpershare8193SourceCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE224Mar2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue56121029015269198902584433693Costofgoodssold307954618545115361524820047Grossprofit25334829672483541059613646Operatingexpenses68913061810298239715032Sellingexpense94125163398491606Adminexpense5118761270179023002898RDexpense304502683109413701718Others220197305300190190Operatingprofit184435234914537266258613ShareoflossesprofitsofassociatesJV300000NetInterestincomeexpense433964656565Others162509508400800800Pre-taxprofit196639935358570773609348Incometax27348580892112301530Aftertaxprofit169335094550478661297818Minorityinterest4120130156208259Netprofit168933884420463059227559Adjustednetprofit172233164925617378509970BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets142041953018470197612306728689Cashequivalents709690036395586160497656Accountreceivables3242485756106654843410718Inventories108416872281267935414655STbankdeposits12721148304304304304FinancialassetsatFVTPL1129762015201520152015Othercurrentassets139818591864224827243340Non-currentassets147592450331095364234155946512PPE119961806524171297283509340274Deferredincometax80221223223223223InvestmentinJVsassos1887521582158215821582Intangibles392601549490432374Goodwill18515301530153015301530FinancialassetsatFVTPL75913561086108610861086Othernon-currentassets115919781955178416141444Totalassets289644403349564561846462775201Currentliabilities449882569319107521226614222Short-termborrowings76721221321132113211321Accountpayables272936983269470362168173Taxpayable251558774774774774Othercurrentliabilities69117753805380538053805Leaseliabilities61104149149149149Non-currentliabilities356630714033403340334033Long-termborrowings18386411462146214621462Obligationsunderfinanceleases66714291490149014901490Deferredincome214224238238238238Othernon-currentliabilities848777844844844844Totalliabilities80641132613351147851629818255Sharecapital000000Capitalsurplus205643227835047400774679955158Totalshareholdersequity205643227935047400784679955158Minorityinterest3354281166132115291788Totalequityandliabilities208993270636213413994832856946CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation1966399353586107816010148Depreciationamortization3044821043117213631548Taxpaid9435080892112301530Changeinworkingcapital36796358239216052058Others7327035656565PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE324Mar2023Netcashfromoperations188134315046603167538173InvestingCapitalexpenditure602565085400650065006500Acquisitionofsubsidiariesinvestments625350000Others118655930000Netcashfrominvesting721696025370650065006500FinancingNetborrowings870533301000Proceedsfromshareissues5585109780000Others11027155584656565Netcashfromfinancing656682092284656565NetchangeincashCashatthebeginningoftheyear620570969003639558616049Exchangedifference3401320000Cashattheendoftheyear709690036395586160497656GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue409833484303299304Grossprofit527906392242268288Operatingprofit62591139593233300Netprofit666100630547279277Adjnetprofit425926485253272270PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin451469440420410405Operatingmargin328342322270256256Adjnetprofitmargin307322323310304296ReturnonequityROE101128131123136148GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx020201000001Currentratiox322420181920Receivableturnoverdays161914361251122111911161Inventoryturnoverdays879926848848848848Payableturnoverdays271021481488148814881488VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE1009531407362271218PEadjusted989542365295232183PB825550443832PCFPS9841130437307274227NoteThecalculationofnetcashincludesfinancialassetsSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE424Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportNoteThecalculationofnetcashincludesfinancialassetsSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE5