WuXi Biologics (2269) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 grew 1.0% year-over-year to RMB8,574.2 million, with non-COVID revenue up 7.7% and late-phase/commercial manufacturing revenue up 11.7% excluding COVID sales.

• Adjusted net profit declined 13% to RMB2.54 billion, mainly due to service mix, milestone timing, and global expansion; net profit attributable to owners fell 33.9% to RMB1,499.1 million.

• 61 new projects were added, with the total project portfolio rising to 742, reflecting a recovery in global biotech activity.

• Backlog remained high at US$20.1 billion, providing strong visibility for future growth.

• The company expanded its global footprint with major investments in Ireland, the US, Singapore, Germany, and China.

Financial highlights

• Adjusted gross profit margin was 44.4%, adjusted EBITDA margin 41.6%, and adjusted net profit margin 29.7% in H1 2024.

• IFRS net profit fell 23.9% to RMB1.78 billion; net profit margin dropped to 20.8% from 27.5% year-over-year.

• Free cash outflow was RMB0.6 billion, with available funds of RMB9.5 billion and a gearing ratio of 4.8%.

• H1 2024 CapEx was RMB1.9 billion, mainly for global capacity and XDC expansion; full-year CapEx plan is RMB4.8 billion.

• Basic earnings per share dropped 32.7% to RMB0.37; diluted EPS was RMB0.35.

Outlook and guidance

• Management maintains 2024 full-year targets, expecting improved profitability and margin recovery in H2, with several major deals anticipated.

• Only one project indicated intention to transfer out due to BIOSECURE Act concerns; most clients remain committed.

• Continued investment in capacity and capabilities to support long-term growth.