On January 27, Glonghui reported that Asymchem Laboratories (06821.HK) announced that the company expects the net income attributable to shareholders for the period from January 1, 2024, to December 31, 2024, to be between RMB 850 million and RMB 1,050 million, a decrease of 54% to 63% compared to the same period last year. The net income after deducting non-recurring gains and losses is expected to be between RMB 830 million and RMB 1,010 million, a decrease of 52% to 61% compared to the same period last year.

The main reasons for the significant changes in the annual performance forecast for the reporting period: In 2024, the company expects to achieve revenue of RMB 5.8 billion to RMB 6 billion, a year-on-year decrease of 23% to 25%, although the revenue in the fourth quarter still maintains a sequential growth of about 20% and an approximate 20% year-on-year increase. The decline in revenue in 2024 compared to 2023 is mainly due to the delivery of substantial orders in the same period last year, with no related orders expected this year. Excluding the impact of last year's substantial orders, revenue continues to grow steadily, among which, the small molecule CDMO business, excluding the impact of substantial orders, sees a year-on-year growth of about 11%, and emerging business revenue has a year-on-year growth of about 3%.

In 2024, the company expects to achieve net income attributable to shareholders of the listed company of RMB 0.85 billion to RMB 1.05 billion, a year-on-year decrease of 54% to 63%, with a sequential growth of about 35% in the fourth quarter. The main reasons for the larger decline in net income compared to revenue are: (1) the profitability of the substantial orders delivered in the same period last year was high, and there are no related revenues this year; (2) the decline in revenue from emerging businesses, as well as some businesses being in a ramp-up phase, resulting in relatively low capacity utilization, coupled with intense domestic market competition, leading to low gross margins for emerging businesses; (3) the UK Sandwich site of the company is still in a ramp-up phase after coming into use in the second half of the year; and (4) the company continues to maintain high investment in R&D for new technologies and nurturing new businesses, resulting in higher R&D expenses.

Overall, in 2024, the small molecule business of the company has basically absorbed the resource redundancy brought by the retreat of substantial orders, and the profitability level has recovered to a relatively good historical level. In 2024, the company's chemical macromolecule business shows positive trends in fields such as peptides, nucleic acids, and ADC, with fourth-quarter revenue accounting for over 45% of the annual revenue. In 2024, the company continues to intensify its efforts in business development, with the total number of new contracts signed throughout the year increasing by about 20% year-on-year, among which the order growth from European and American market clients exceeds the overall order growth level of the company, and the order reception maintains a positive trend, laying a solid foundation for the company's stable operation.