CXO demand is growing explosively, and the future layout of enterprises may usher in the golden period of development

【Pharmaceutical Network Market Analysis】 In recent years, with the rapid development of China's biopharmaceutical enterprises and the expansion of market capacity, the layout of CXO track enterprises ushered in a golden period of development, some analysts said that the head enterprises in the pharmaceutical, CXO and medical service sectors are worth paying attention to
.
For the CXO sector, Zhongtai International recommends paying attention to WuXi AppTec, WuXi Biologics, Zhaoyan New Drug and other companies
.
As far as WuXi AppTec is concerned, since 2001, it has become a domestic service company for chemical drug R&D outsourcing, and the company has achieved rapid development
with various advantages.
Data shows that from 2019 to 2021, WuXi AppTec's operating income increased from 9.
614 billion yuan to 22.
902 billion yuan, and non-net profit increased from 1.
559 billion yuan to 4.
064 billion yuan
.
According to the third quarterly report of 2022 released by the company, the company achieved a net profit attributable to the parent of 7.
378 billion yuan in the first three quarters of this year, a year-on-year increase of 107.
12%.

During the reporting period, the company continued to strengthen the integrated CRDMO (contract research, development and production) and CTDMO (contract testing, research and development, and production) business models; Give full play to the advantages of global layout, multi-location operation and full industry chain coverage, formulate and efficiently implement business continuity plans in a timely manner to ensure the achievement
of the company's overall performance goals.
Analysts said that WuXi AppTec's orders in hand have grown well, and the company's performance growth momentum is sufficient
.
In addition, the Company's Cell & Gene Therapy business has served eight Phase III clinical trials, four of which are in the marketing application preparation stage; The domestic new drug R&D service department has 1 project in the marketing application (NDA) stage and 5 projects in the phase III clinical trial stage; The cell and gene therapy business and domestic new drug R&D services are expected to improve
.
Based on orders in hand and confidence in future development, the company adjusted its revenue growth guidance for 2022 from 68%-72% to 70%-72%, and maintained the target of a compound revenue growth rate of
no less than 34% from 2021 to 2024.
Some institutions predict that from 2022 to 2024, WuXi AppTec is expected to achieve a net profit attributable to the parent of 88.
67/97.
58/12.
065 billion yuan
.
As a contract research, development and manufacturing (CRDMO) company, WuXi Biologics provides multi-faceted end-to-end services through an open, integrated biopharmaceutical capability and technology enablement platform to help partners discover, develop and manufacture biopharmaceuticals from concept to commercial manufacturing, accelerating the global biopharmaceutical R&D process and reducing R&D costs
.
It is reported that despite various challenges, WuXi Biologics has maintained its business growth momentum and signed a number of new early- and late-stage projects
in a row.
WuXi Biologics continues to add 120 projects in 2022 and will continue to grow in 2023
.
For Zhaoyan new drugs, some institutions predict that future revenue is expected to continue to maintain rapid growth
.
( 1 ) The company's capacity construction continues to ensure the growth of medium and long-term performance, as of the end of the reporting period, the company's construction projects in progress are 283 million yuan, an increase of 122.
83% over the beginning of the year, an increase of 214.
44% over the same period of the previous year, it is expected that Suzhou, Wuzhou, Wuxi and Chongqing will have a total of about 32,000 square meters of laboratory and office buildings and about 70,000 square meters of animal rooms, breeding facilities and supporting facilities are expected to be put into operation in 2023; ( 2 ) Contract liabilities grew rapidly, order demand was strong, as of the end of the reporting period, the company's contract liabilities were 1.
519 billion yuan, 46.
06% compared with the same period of the previous year, and orders in hand continued to rise; ( 3 ) High inventory enhances Q4 performance certainty, due to the company's acquisition of experimental monkey suppliers Yingmao Biologics and Weimei Biologics in the first half of the year, the increase in consumable biological assets as of the end of the reporting period led to a significant increase in the company's inventory to 2.
212 billion yuan, of which the unfinished thematic cost accounted for about 35%, and most of the Q4 revenue was transferred from this item, and it is expected that the company's Q4 revenue is expected to reach nearly 1 billion yuan
。 Data show that in the first three quarters of 2022, the company's revenue reached a new high, and its performance growth continued to be strong, achieving revenue of 1.
276 billion yuan, a year-on-year increase of 48.
97%, and a net profit attributable to the parent of 632 million yuan in the first three quarters, a year-on-year increase of 154.
85%.

。 In addition, some institutions said that the research and development of domestic innovative drugs is still in a high prosperity stage, the company's safety assessment business competitive advantage has been continuously enhanced, and orders have accelerated; The company is also actively expanding the boundaries of capabilities, and considering the further release of production capacity, the international business synergy brought by Biomere and the further improvement of upstream and downstream layout, it is expected that the company's performance will continue to grow at a high rate in the next three years, and the company's net profit attributable to the parent is expected to be 857 million yuan, 1.
155 billion yuan and 1.
550 billion yuan from 2022 to 2024, with a year-on-year growth rate of 53.
7%, 34.
7% and 34.
2%
respectively.
In the past two years, the entire pharmaceutical sector has been adjusted, and the valuation advantage of the sector has gradually emerged
.
Among them, from the performance of the first three quarters, the CXO field has outstanding performance, in addition, the industry said that in the CXO field, China has cultivated companies with global scale, and many companies have undertaken orders
from European and American pharmaceutical companies.
Coupled with China's encouragement of pharmaceutical companies to take the route of innovation and research and development, the demand for CXO has shown explosive growth in recent years
.
Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice
to anyone.