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WUXI XDC(2268)
Analysis¡G
The WuXi XDC Cayman Inc. (02268)'s revenue and gross profit exhibited strong growth, increasing by 67.6% and 133.4% period-on-period to RMB1,665.2 million and RMB535.3 million, respectively, for the six months ended June 30, 2024. In addition, net profit attributable to owners has increased to RMB488.2 million, a period-on-period increase of 175.5%, while adjusted net profit also exhibited strong growth, rising to RMB533.6 million, which represents a period-on-period increase of 146.6%. The company has a cumulative total number of 538 projects in the drug discovery stage since inception through June 30, 2024, involving discovery chemistry, conjugation discovery, in vitro and in vivo characterization and develop ability study, being 188 projects more than the 350 projects as at June 30, 2023. According to Frost & Sullivan, the global ADC drug market size is anticipated to grow at a CAGR of 30.0% from US$7.9 billion in 2022 to US$64.7 billion in 2030, which is considerably more rapid growth than the CAGR of 9.2% that is expected for the global biologics drug market during the same period. Considering the globally limited ADC CRDMO capacities and the company's unique "enable, follow and win the molecule" strategy executed through its proprietary "one-stop" platform, the company expects to steadily bring new projects into the pipeline to maintain strong growth.
Strategy¡G
Buy-in Price: $26.00, Target Price: $29.00, Cut Loss Price: $23.90
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Report Review of August 2024
Sectors: TMT, Semiconductors, Consumer & Healthcare ¡]Eric Li¡^ TMT, Semiconductors, Consumer & Healthcare ¡]Eric Li¡^This month I released reports of 361 DEGREES INT. (1361.HK). During 2023FY, 361 Degrees International Limited (361 Degrees) recorded a revenue of RMB8,423.3mn, increasing 21.0% YoY. Profit attributable to the equity shareholders of the Company was RMB961mn, representing a YoY increase of 28.7%. A total dividend of HK20.4 cents per ordinary share (equivalent to RMB18.7 cents), representing a dividend payout ratio of 40.2%. In terms of product segment, sales of the company's two core product lines, namely footwear and apparel, increased by 23.0% YoY and 9.8% YoY respectively. For the year under review, the proportions of total revenue of footwear and apparel sales were slightly increased from 41.0% to 41.7% YoY and slightly decreased from 35.2% to 31.9% YoY of the total revenue respectively. This was mainly due to the increase in proportion of sales revenue from 361 Degrees Kids from 20.7% to 23.2% of the total revenue for the year under review, which in turn affected the proportion of sales of various products to total revenue. The average wholesale price (AWP) of footwear and apparel edged up by 3.0% and 0.5% year-on-year respectively. The increase in footwear's and apparel's AWP was mainly due to the upward adjustments of the wholesale prices of the existing products across different product lines in order to cover the increase in cost of production and reflect the continuous brand image enhancement; the upgrade of product mix by launching a variety of new products with a higher AWP; and the increase in proportion of sales revenue generated from the e-commerce business which has a higher AWP than the sales made to distributors, above reasons contributed to increase in AWP as compared to that of last year. In addition, the sales volume of footwear and apparel products increased by 19.4% and 9.4% YoY, respectively. In recent years, as China's consumer preferences leaned towards specialisation, diversification, and cost effectiveness, the company positions as a "professional, youthful, and internationalised" brand. The company has built a diversified brand matrix based on professional functions and its own-branded IP. With 2024 bringing numerous international and domestic sports events, including the highly anticipated Paris Olympics, which are expected to stimulate a broader participation in sports and increase consumer demand. We expect 2024-2025 EPS to be RMB0.49 and RMB0.53 respectively, with PT of HKD4.02, implies a FY2024E P/E of 7.47x (~2-yrs historical average). Our investment rating is ¡§Accumulate¡¨. 
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