WuXi PharmaTech (603259): Performance meets expectations Expected rapid growth in non-net profit
2019 Q1 Results Meet Expectations WuXi AppTec Announces 2019 Q1 Results: Operating Income 27.69 ppm, an increase of 29 in ten years.31%; Net profit attributable to shareholders of listed companies3.860,000 yuan, an annual increase of 32.97%, corresponding to a profit of 0.33 yuan.Performance was in line with expectations and continued to grow rapidly. The development trend deducts non-net profit beyond expectations.The company achieved rapid performance growth in the first quarter of 2019, with revenue and net profit increasing by 29 respectively.31%, 32.97%.Deduct non-net profit 4.95 ‰, an increase of 87 in ten years.54%, deducting non-net profit exceeded our expectations.We expect the company’s laboratory services in China and CMO business to remain the most important sources of growth in the short term. Following the transformation strategy, clinical CRO and the US business expect better performance.Total changes in the fair value invested by the company and foreign exchange hedge value -1.04 million is the main source of non-net profit and net profit.We expect to gradually improve in the next few quarters and temporarily maintain a positive contribution of more than 100 million. Business is good.Net operating cash flow of the company from January to March 1.900,000 yuan, a significant improvement over the 31.69 million yuan in the same period last year.The cost control during the period was good, and the management fee rate decreased by 1.9ppt to 10.7%, the financial rate fell by 1.9ppt to 4.6%, the two drove the company’s comprehensive rate down 武汉夜生活网 by 2.6ppt.The structural impact of the company’s business, the overall gross profit margin fell by 1ppt.We expect that through the development of the company’s CMO business and clinical CRO and other industrial chain downstream business, the future gross margin may be flat or down fine-tuning, but the revenue scale will increase rapidly, and the advantages of scale will be further highlighted. Continue to advance the transformation strategy and long tail strategy.The company has basically completed the layout of the entire CRO & CMO industry chain.As the company’s upstream to downstream transformation strategy advances, customer orders are gradually transferred to the downstream; the transformation is more reasonable for small and medium-sized customer groups, and enhancing the customer’s interests while deep R & D cooperation can also strengthen the implementation of the transformation 杭州桑拿体验网 strategy. Earnings forecast remains unchanged for 2019/2020, EPS is 1 respectively.96 yuan / 2.44 yuan, an increase of one year.3% / 24.7%. Estimates and recommendations Current A shares are expected to correspond to 45/36 times P / E in 19/20.Maintain A / H share recommendation, maintain a target price of RMB 108 for A shares (corresponding to 55/44 times 19/20 P / E, 22% upside), maintain a target price of 120 yuan for H shares (corresponding to 54 for 19/20/ 44 times P / E, 24% upside). The volatility of risk outsourcing business orders, foreign exchange risks, and restricted stocks are lifted from listing and circulation.