Reporter | Guo Jingjing
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After the internal reorganization, WuXi AppTec (603259.SH,02359.HK) disclosed its first financial report after the change in accounting policies.
On October 29, WuXi AppTec disclosed that in the first nine months of this year, the company's operating income increased by 39.84% year-on-year to 16.521 billion yuan, and the net profit attributable to shareholders of listed companies increased by 50.41% year-on-year to 3.562 billion yuan.
Among them, in the third quarter of 2021, the company achieved revenue of 5.985 billion yuan, an increase of 30.58% year-on-year, which is the highest single-quarter revenue since its listing in May 2018; in the same period, its net profit attributable to the mother was 887 million yuan, an increase of 36.23% year-on-year.
In terms of gross profit margin, in the first three quarters of 2021, WuXi AppTec's gross profit margin was about 36.98%, while its gross profit margin for the whole year of 2020 was 37.99%. In terms of a single quarter, the company's gross profit margin in the first three quarters was 37.1%, 36.89%, and 36.98%, respectively.
Looking back at the first two quarters of this year, WuXi AppTec achieved single-quarter operating income of 4.95 billion yuan and 5.586 billion yuan in the first and second quarters, respectively, with a year-on-year increase of 55.31% and 38.14% respectively; the net profit attributable to the mother in the same period was about 1.5 billion yuan and 1.175 billion yuan, respectively, with a year-on-year change of 394.92% and -16.89% respectively.
In terms of the company's various business conditions, in the most important chemical business segment, WuXi AppTec achieved revenue of 10.077 billion yuan in the first three quarters, an increase of 47.5% year-on-year, adjusted Non-IFRS gross profit of 4.238 billion yuan, an increase of 44.7% year-on-year, and gross profit margin of 42.1%; among them, in the third quarter, this part of the business achieved revenue of 3.651 billion yuan, an increase of 33.3% year-on-year, and adjusted Non-IFRS gross profit of 1.503 billion yuan, an increase of 28.7%. Gross margin was 41.2%.
Specifically, in the first three quarters, the company's small molecule drug discovery service revenue was 4.443 billion yuan, an increase of 42.3% year-on-year; CDMO service revenue was 5.634 billion yuan, an increase of 51.9% year-on-year. The company completed the synthesis of about 200,000 custom compounds from January to September 2021; added 526 new molecular projects during the reporting period, including 9 commercialization projects and 31 projects from the "follow molecule" strategy; and provided CDMO services such as process development, formulation development and production for 1548 small molecule projects. During the Reporting Period, Its subsidiary, Hequan Pharmaceuticals, completed the acquisition of Bristol-Myers Squibb's formulation production base in Couve, Switzerland, and began consolidating in July, becoming Hequan Pharmaceutical's first production base in Europe; on September 24, 2021, Hequan Pharmaceutical announced the construction of a commercial production base for APIs and preparations in Delaware, USA.
In terms of test business, WuXi AppTec achieved revenue of 3.335 billion yuan in the first three quarters of this year, an increase of 43.9% year-on-year, adjusted non-IFRS gross profit of 1.132 billion yuan, an increase of 51.4% year-on-year, and gross profit margin of 33.9%; of which, in the third quarter, the business achieved revenue of 1.227 billion yuan, an increase of 37.4% year-on-year, adjusted Non-IFRS gross profit of 397 million yuan, an increase of 18.6% year-on-year, and gross profit margin of 32.3%. Among them, the company's laboratory analysis and testing services business achieved revenue of 2.133 billion yuan, an increase of 41.9% year-on-year; pharmaceutical analysis and testing services (excluding device testing) revenue increased by 58% year-on-year; clinical CRO and SMOs revenue of 1.201 billion yuan, an increase of 47.4% year-on-year.
In terms of biology business, in the first nine months of this year, WuXi AppTec achieved revenue of 1.424 billion yuan, an increase of 33.2% year-on-year, adjusted Non-IFRS gross profit of 596 million yuan, an increase of 26.6% year-on-year, and gross profit margin of 41.8%; of which, in the third quarter, the business achieved revenue of 504 million yuan, an increase of 22.4% year-on-year, and adjusted Non-IFRS gross profit of 256 million yuan, an increase of 52.2% year-on-year, and gross profit margin of 50.8%.
In the cell and gene therapy CTDMO business, WuXi AppTec achieved revenue of RMB736 million, down 5.2% year-on-year, adjusted Non-IFRS gross profit of RMB0.14 billion, down 89.7% year-on-year, gross margin of 1.9%; of which, in the third quarter, the business achieved revenue of RMB283 million, an increase of 14.7% year-on-year, adjusted Non-IFRS gross profit of RMB0.17 billion, down 57.3% year-on-year, gross margin of 6.0%. It should be noted that WuXi AppTec's Cell and Gene Therapy CTDMO business in China increased by 187% year-on-year in revenue in the first three quarters and 223% year-on-year in the third quarter.
In the domestic new drug R&D service segment, WuXi AppTec achieved revenue of 932 million yuan in the first three quarters of this year, an increase of 16.4% year-on-year, adjusted Non-IFRS gross profit of 412 million yuan, down 0.6% year-on-year, and gross profit margin of 44.2%; among them, the business achieved single-quarter revenue of 311 million yuan in the third quarter, an increase of 10.5% year-on-year, adjusted Non-IFRS gross profit of 118 million yuan, an increase of 15.2% year-on-year, and gross profit margin of 38%.
WuXi AppTec said that this is the company's first financial report after the company began to adjust the organizational structure of the company's business segments in the third quarter of 2021.
As a global drug R&D service platform, WuXi AppTec provides all-round and integrated platform services for the discovery, research and development and production of small molecule chemical drugs through 30 operating bases and branches set up in China, the United States and Europe, and provides various new drug research and development, production and supporting services for global pharmaceutical companies in the form of a whole industry chain platform, and carries out some medical device testing and precision medicine R&D and production services.
From January to September 2021, the company added more than 1,300 new customers, resulting in more than 5,640 active customers; of which, revenue from original customers was 15.337 billion yuan, an increase of 30% year-on-year; revenue from new customers was 1.184 billion yuan; revenue from the world's top 20 pharmaceutical companies was 4.699 billion yuan, an increase of 21% year-on-year; revenue from other customers around the world was 11.823 billion yuan, an increase of 49% year-on-year. From a regional point of view, during the reporting period, the company's revenue from the United States was 9.011 billion yuan, an increase of 38% year-on-year; revenue from Europe was 2.255 billion yuan, an increase of 33% year-on-year; revenue from Chinese customers was 4.038 billion yuan, an increase of 45% year-on-year; and revenue from customers from other regions was 1.216 billion yuan, an increase of 53% year-on-year.
According to the announcement of the accounting policy change issued by the company on October 29, before the accounting policy change, the company's operating divisions were mainly divided into laboratory services in China, laboratory services in the United States, clinical research and other contract research and development services, small molecule new drug process research and development and production business and other businesses; after the change of accounting policy, it was mainly divided into chemical business, biology business, testing business, cell and gene therapy CTDMO business, domestic new drug research and development service department and other businesses.
Among them, the chemical business integrates the resources and capabilities related to the chemical business such as Hequan Pharmaceutical, Chemical Service Department, Pharmaceutical R&D International Service Department and Core Analysis Department to provide customers with new drug research, development and production services (CRDMO); the biology business integrates the Group's cutting-edge DNA-coded compound library (DEL) technology, biology, oncology and immunology capabilities to provide integrated drug discovery and research services for global customers; the testing business collective testing division, Kant Hongyi (CDS business), WuXi Jinshi (SMO business) and other preclinical and clinical resources and capabilities of the Group to better serve customers of global pharmaceuticals, biopharmaceuticals, medical devices, in vitro diagnostic reagents; cell and gene therapy CTDMO business uses the resources and capabilities of China, the United States and the United Kingdom to provide customers with integrated process development, production and testing services (CTDMO) for cell and gene therapy products; domestic new drug research and development services to provide customers with integrated new drug research and development services with patent creation as the core. Develop small molecule new drugs with international high level, empower domestic pharmaceutical companies to research, as well as other businesses such as administrative service revenue, sales of raw materials and sales of scrap.
In the secondary market, in the third quarter of 2021, WuXi AppTec's share price showed a downward trend, falling by about 12% so far in July. On October 29, the company's latest stock price was 138.01 yuan / share, up 2.8%.