Jianguo International issued a research report, stating that Wuxi Bio (02269) achieved a 1.0% year-on-year increase in revenue in 1H24, excluding the impact of COVID-19, the growth was 7.7%, roughly in line with the company's previous guidance. Adjusted net income declined by 20.7% year-on-year. The company maintains its annual guidance: 1) high single-digit growth in revenue and adjusted net income for the full year, benefiting from large payments and improved operational efficiency, with an expected improvement in gross margin in 2H; 2) positive free cash flow for the full year, capital expenditures of 4.8 billion yuan, and an estimated annual capital expenditure of 5 billion yuan for 2025-26, focusing on capacity expansion in Singapore.
The bank pointed out that the company's revenue in 1H24 was basically in line with expectations, and the number of new orders in the later stage performed well, but the fluctuation of industry sentiment and changes in the external environment remain the biggest short-term uncertainties for performance. The bank lowered its profit forecast for the company for 2024-26 by 4-19%, lowered the DCF target price to HKD 12.3 (originally HKD 16.2), and maintained a neutral rating.