CXO performance is resilient, and the industry still has development logic

【Pharmaceutical Network Market Analysis】The CXO industry's performance in the first three quarters of 2022 has paid off, and the top manufacturers have performed beautifully
.
Among them, WuXi AppTec's operating income in the first three quarters of 2022 was 28.
395 billion yuan, a year-on-year increase of 71.
9%; The net profit attributable to the parent was 7.
378 billion yuan, a year-on-year increase of 107.
1%.

Among them, the company achieved more than 10 billion yuan in a single quarter for the first time with 10.
638 billion yuan in the third quarter, and the growth rate also hit a record high, reaching 77.
8%.

In addition, the leading companies in the subdivision such as Kailaiying, Boteng, Zhaoyan New Drug, and Medixi also achieved a significant year-on-year
increase in Q3 quarterly results this year.
Overall, the CXO industry performed strongly
.
The industry generally believes that in the long run, the sector still has development logic
.
Among them, Southwest Securities analysis believes that the CXO sector still has both certainty and growth, and domestic innovative drugs have entered the harvest period, further bringing incremental space to the CXO sector, and it is expected that the performance of the sector will maintain high growth with high
certainty.
Soochow Securities believes that the basic logic of the growth of the CXO industry lies in the continuous growth of R&D investment in the pharmaceutical industry and the continuous increase in the penetration rate of outsourcing services in pharmaceutical R&D, which is also its basic value
.
Capital Securities pointed out that from the perspective of many indicators of the company and the industry, the performance of the CXO sector is highly certain, and the valuation of major CXO companies has fallen back to the low level in recent years, which has a high allocation value
.
Recently, the fund manager of Huashang Pharmaceutical and Medical Industry also expressed optimism about the CXO (pharmaceutical R&D outsourcing) sector, the fund manager believes that the resilience of CXO company's performance is still very strong, and the market's concerns about innovative drug investment and financing have led to a gradual decline in its valuation, but the logic of industry development has not been destroyed, and the current investment and financing expectations are at the bottom, and improvement is imminent
。 In addition, the newly released research report of GF Securities pointed out that from the actual situation of the CXO industry, each order still maintains a high growth rate and the certainty of performance is also high, from the perspective of overseas prosperity and order supply, overseas orders have not been cold, the demand side of the CXO industry is still stable, and each company is still maintaining its own development rhythm
.
Optimistic and recommend China's CXO industry chain, optimistic about the continuous performance growth
of leading enterprises in the future.
According to data released by Frost & Sullivan, the global CRO market size was about $73.
1 billion in 2021, with a CAGR of about 9.
5%
from 2021 to 2024.
Among them, the global clinical CRO market size was about $46.
7 billion in 2021, with a CAGR of about 10.
0%
from 2021 to 2024.
Domestically, the size of China's CRO market was about $10 billion in 2021, with a CAGR of about 30.
3%
from 2021 to 2024.
Among them, the market size of clinical CRO in 2021 is about 5.
6 billion US dollars, and the CAGR from 2021 to 2024 is about 34.
7%.

In the face of considerable market space, many companies are accelerating their entry into the CXO track
.
For example, on November 28, Huashitong was listed on the New Third Board
today.
According to the data, the company is mainly committed to providing CDMO services for key pharmaceutical intermediates, APIs and pharmaceutical technology services for domestic and foreign pharmaceutical enterprises and pharmaceutical R&D institutions, and the main product forms of the company's CDMO business are pharmaceutical intermediates, APIs and pharmaceutical technical services
.
The head company of domestic culture media, Opme, is also strategically deploying the CDMO business, creating the second growth curve
.
The company has built a one-stop CDMO service platform for biopharmaceutical R&D and production from DNA to IND and BLA, which complements the culture media business
.
At present, the number of CDMO customers and projects of the company has grown steadily, and a total of 108 CDMO projects have been completed or are being implemented, with a total of 93.
32 million
yuan of orders in hand as of the first quarter of 2022.
At the same time, in order to break the capacity limitation, the company is promoting IPO fundraising projects, and Guolian Securities believes that CDMO and culture culture medium business are expected to drive the company's performance to maintain high growth
.
Disclaimer: Under no circumstances does the information or opinions expressed herein constitute investment advice
to anyone.