Author: Northwest Choke.
Pharmaceutical investors are quite interesting, and while scolding, they pushed WuXi Biologics up to 16%.
On the evening of January 10, WuXi Biologics delivered a keynote speech at the J.P. Morgan Healthcare Annual Meeting held in the United States. This is the third time WuXi Biologics has participated in this conference, and what was originally a very ordinary speech has attracted the attention of the whole industry.
WuXi Biologics Chairman Chen Zhisheng told Yankee this time, "In 2023, the company will add 132 new projects. Just one month ago, WuXi Biologics disclosed its performance guidance to Hong Kong stock investors, and it also said that the company only added 91 new projects at the end of November, and it is expected to fail to achieve the target of 120 new projects for the whole year.
In one month, WuXi Biologics has attracted 41 new projects. If you work hard, you can pull 400 projects a year. WuXi Biologics' business capabilities can be described as:Retract and release freely, advance and retreat freely
Despite the surprise of WuXi Biologics' latest project, the past 24 hours have been almost full of criticism from the investment community. In the space of a month, WuXi Biologics went from reviewing its growth targets too aggressively to exceeding its annual plan, making it so smooth that it was impossible to know which was true and which was false. Moreover, Chen Zhisheng also proposed at the Morgan annual meeting that because the project development in 2023 will be relatively smooth, the new projects in 2024 are expected to be raised from 80 to 110.
As soon as I got out of the ICU, I entered the KTV, and it was a business K
A careful analysis of the ins and outs of this matter can actually find a lot of doubts.
No matter how influential the JP MORGAN conference is, it is only a business activity that does not have any binding effect on Hong Kong-listed companies, and aims to exchange investment information in the medical industry. WuXi Biologics chose to release the official negative earnings information in the Hong Kong stock market, but put the positive news in a "briefing". This in itself is a bit of a problem. The information disclosure system of Hong Kong stocks is relatively relaxed, but there is an obvious contradiction between the "briefing" with good performance and the previous negative performance. This should be placed in A-shares, at least an inquiry letter.
Moreover, WuXi Biologics once threw out a repurchase plan on December 6, and will use up to US$600 million to repurchase 10% of the company's shares, and as of December 28, it has sold nearly HK$20 million, which is obviously motivated to pull up the stock price. This set of operations is in the big A, and I am afraid that the chairman will not be able to escape the investigation. ▌Saying that A-shares protect investors, now I believe it
A closer analysis of WuXi Biologics' project data also reveals some frustrations. At the end of November, WuXi Biologics accounted for 20% of new projects in China, and by the end of December, 25% of projects came from China. From January to November, 18 new Chinese projects were signed, and 15 new Chinese projects were signed in a single month in December.
Those who do drug sales know that at the end of each year, dealers at all levels have to press goods on a large scale, on the one hand, to ensure the market during the New Year, and on the other hand, to rush the performance at the end of the year. 
WuXi Biologics has vividly interpreted the traditional folk custom of "year-end pressure on goods" for Chinese companies. It may be that bullying Americans is not the Spring Festival, and they don't understand this.
There may still be moisture in the project figures. According to WuXi Biologics, a number of new domestic ADC projects were added in December last year. This part may overlap with its sister unit, WuXi Helian, and it cannot be ruled out that it is just counting the number of projects on its own head. More importantly, WuXi Biologics has only completed the project number by the end of 2023 and has not revised its 2023 performance forecast. Most of the major CXO companies in China rely on foreign project revenue, and WuXi Biologics' 2023 interim report shows that business revenue from China accounts for only 2111%。Within WuXi Systems, these are referred to as "long-tail businesses" and are numerous but generate modest revenue. WuXi Biologics provides end-to-end integrated services for most of these "long-tail businesses", from pre-R&D to post-CDMO, which is the only way to maintain certain revenues.
WuXi Biologics only adjusted the number of projects and did not adjust the performance expectations, so it is not difficult to guess why.
WuXi Biologics also mentioned that the recovery of biotech projects in the United States will also help improve performance in 2024. With the strong atmosphere of interest rate cuts in the United States, biotech companies with a large demand for capital have finally survived the expectation of monetary relaxation, and several U.S. stock CXO companies such as IQVIA, Labcorp, and Icon have risen a lot in the past two months.
But don't forget, U.S. biotech is similar to WuXi system's "Chinese customers" in that most of them are small businesses. No matter how many projects there are, the improvement of performance is limited. In short, WuXi Biologics has done its best to be worthy of the audience. In order to let everyone have a good year, a very bright expectation was also given: 110 new projects will be added in 2024.
Judging from the strength of the number in December, there is a high probability that 110 is no problem. Performance, don't force it.