As of 14:30 Beijing time on July 31, WuXi AppTec's share price rose 7.37% to HK$32.05, with a turnover of 360 million. Hong Kong-listed biopharmaceutical stocks collectively strengthened. As of press time, 13 constituent stocks in the sector rose, with WuXi AppTec leading the gains. Many brokerages expressed a positive attitude towards WuXi AppTec's future trend and gave it a buy rating.
WuXi AppTec's interim report was released, and the number of new orders far exceeded market expectations
According to the report information released by WuXi AppTec, WuXi AppTec's revenue in the second quarter of 2024 increased by 16% month-on-month to 9.26 billion yuan. WuXi AppTec's adjusted Non-IFRS (non-International Financial Reporting Standards) net profit attributable to shareholders increased by 28.5% month-on-month to 2.46 billion. Due to better cost control, the growth rate of net profit was higher than the growth rate of revenue.
The most striking thing is that the amount of new orders in hand (excluding the new crown business) of WuXi AppTec increased by 33.2%. As of the end of June 2024, the total amount of the company's orders in hand reached RMB 43.1 billion. According to the figure below, the number of R (research services) orders increased by 7%, the number of D (development services) orders increased by 18%, and the number of M (production services) orders increased by 20%. The growth rate of these three orders is less than 33.2% of the total amount, which means that the new orders are still dominated by "high-priced large orders".
WuXi AppTec's business development status
WuXi AppTec vigorously promotes the TIDES (mainly including peptide drugs for weight loss drugs) business, saying that this business will become an important growth engine for the company in the future, and is expected to grow by more than 60% in 2024 and maintain this growth rate in 2025. At the same time, the market has also paid the highest attention to this business. In the second quarter, the business lived up to expectations and maintained high growth. As of the end of the second quarter, the business's orders in hand increased by 147% year-on-year.
In addition, WuXi AppTec disclosed that customer revenue from the world's top 20 pharmaceutical companies reached 6.59 billion yuan, an increase of 11.9% year-on-year after excluding the COVID-19 commercialization project. This significant growth demonstrates the company's business resilience as major customers readjust their R&D pipeline priorities due to the impact of the Inflation Reduction Act (IRA).
The pharmaceutical industry is showing a clear recovery trend
It is not just WuXi AppTec that has seen an unexpected increase in orders in the second quarter. Several companies in the pharmaceutical industry have shown a considerable growth trend. Alethe and Corning Life Sciences, which previously disclosed their performance forecasts, also gave unexpected order growth data. Kanglong Chemical disclosed in its performance forecast: "The amount of new orders in the first half of 2024 increased by more than 15% year-on-year, of which laboratory services increased by more than 10%, CDMO increased by 20-30%, clinical research services increased by 10%, and large molecule CDMO increased by more than 10%. "Kaleido disclosed in the announcement: "New orders in the first half of 2024 increased by more than 20% year-on-year, and the second quarter increased significantly compared with the first quarter, among which the growth rate of orders from customers in the European and American markets exceeded the company's overall order growth rate." At the same time, several overseas pharmaceutical giants recently released semi-annual reports also showed positive signals of order growth. LONZA (Lonza) stated in its semi-annual report that due to the improvement of the financing environment in the US and European biopharmaceutical markets, the company's biologics CDMO business performed better than expected (up 2%), and the company's core EBITDA exceeded expectations (up 6%). Another industry giant, IQVIA, also set a record high in orders on hand in the second quarter, and all forward-looking indicators showed an upward trend. As of the end of the second quarter of 2024, the company's order backlog reached $30.6 billion (an increase of 7.7% year-on-year, adjusted for exchange rates; 8.1% without exchange rate adjustment). Moreover, both companies stated that the growth in performance was caused by the industry recovery.
How to trade on uSMART:
After logging into the uSMART SG APP, click "Search" from the top right of the page, enter the target code, such as "02369", to enter the details page to learn about the transaction details and historical trends, click "Trade" in the lower right corner, select the "Buy/Sell" function, and finally fill in the transaction conditions and submit the order; the picture operation instructions are as follows:
Source: uSMART SG
Follow us
Find us on Twitter, Instagram, YouTube, and TikTok for frequent updates on all things investing.
Have a financial topic you would like to discuss? Head over to the uSMART Community to share your thoughts and insights about the market! Click the picture below to download and explore uSMART app!
Important Notice and Disclaimer:
We have based this article on our internal research and information available to the public from sources we believe to be reliable. While we have taken all reasonable care in preparing this article, we do not represent the information contained in this article is accurate or complete and we accept no responsibility for errors of fact or for any opinion expressed in this article. Opinions, projections and estimates reflect our assessments as of the article date and are subject to change. We have no obligation to notify you or anyone of any such change. You must make your own independent judgment with respect to any matter contained in this article. Neither we or our respective directors, officers or employees will be responsible for any losses or damages which any person may suffer or incur as a result of relying upon anything stated or omitted from this article.
This document should not be construed in any jurisdiction as constituting an offer, solicitation, recommendation, inducement, endorsement, opinion, or guarantee to purchase, sell, or trade any securities, financial products, or instruments or to engage in any investment or any transaction of any kind, nor is there any intention to solicit or invite the purchase or sale of any securities.
The value of these securities and the income from them may fall or rise. Your investment is subject to investment risk, including loss of income and capital invested. Past performance figures as well as any projection or forecast used in this article is not indicative of its future performance.
This advertisement has not been reviewed by the Monetary Authority of Singapore