搭乘CDMO的上升周期;解除采购订单并重申买入H股

reiterate Buy on H-sharePO:38.40HKD/Price:33.86HKD CDMOaccelerationdrivesrobustgrowth growth across its service platforms. Laboratory-services revenue rose 13.7% YoY toRMB4.63bn, while CDMO revenue surged 32.8%YoY to RMB1.88bn, driven bylarge scale manufacturing and project progression. Clinical-development revenue increased13.8%YoYtoRMB1.07bn.In1H26Grossprofitgrew13.9%YoYtoRMB2.47bn,although gross margin narrowed 1.1ppt YoY to 32.6%, as pressure in laboratory andclinical services partly offset a 2.7ppt improvement in the CDMO margin to 25.6%.Selling, administrative,and R&D expenses rose 18.5%, 17.2%, and 18.1% YoYrespectively, with expense ratios stable at 2.2%, 13.1%, and 3.9% in 1H26.Attributablenet profit increased 7.0% YoY to RMB750mn, while net margin fell 1.0ppt YoY to 9.9%.Non-IFRS adjusted net profit grew faster, rising 20.3% YoY to RMB909mn.Late-stageCDMOprogressionenhancesgrowthvisibilityThe CDMO pipeline expanded to 782 molecules or intermediates, including 45 projects Key Changes in process validation or commercialization and 51 in Phase Ill. Pharmaron also secured a commercial manufacturing partnership for a multinational pharmaceutical company'ssubmitted oral small-molecule GLP-1 receptor agonist and passed its first pre-approvalinspection for an innovative-drug APl project in China. Customer quality and cross-sellingalso strengthened, with revenue from the global top 20 pharmaceutical companies rising32.0% YoY.Supported by strong order intake and business trends, management expectsfull-year 2026 revenue growth of 15-20%.LiftPOtoHKD38.4reiterateBuyonH-share Merrill Lynch (Hong Kong)+85235084531Ethan Cui >>Research Analyst Merill Lynch (Hong Kong)ethan.cui@bofa.comSandra Sun >>Research Analyst Merill Lynch (Hong Kong)sandra.sun@bofa.com Considering the rapid growth in the CDMO, laboratory-services, and clinical-developmentsegments, as well as the visibility from the global oral GLP-1 business, we lift our 2026/27/28E revenue estimates by4%/8%/12%.We also update the margin profilebased on the 1H26 trend. As a result, we lift our DCF-based H-/A-share PO fromHKD32.3/RMB28.4 to HKD38.4/RMB33.8.Given the solidpipeline development andglobalization opportunities,we reiterate Buy on Pharmaron H share, but due to theexpensive valuation we reiterate Underperform on its A share.Estimates (Dec) (CNY)2024A2025A2026E2027E2028E Rating (H Share) >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules.Refer to 'Other Important Disclosures' for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 8 to 11. Analyst Certification on page 4. PriceObjective Basis/Risk on page 4.13010704 APl: Active pharmaceutical ingredient CDMO:Contractdevelopment andmanufacturing organization iQprofile s" Pharmaron (H/A)Key Income Statement Data (Dec)2024A2025A Healthcare Technology&Distribution Pharmaron is a leading pharmaceutical R&D service platform with global service capability. The company's coreR&D and manufacturing services focus on facilitatingclients in design of small molecule compounds andsynthesize them in a large scale. Rooted from laboratorychemistry, Pharmaron has developed an integrated serviceplatform covering biology, DMPK/ADME, in vitro biologyand in vivo pharmacology with comprehensive capability. Italso provides clinical development and CMC services. We rate Pharmaron Buy, given: 1) no new action on the Biosecure Bill so far, andits solid backlog growth (up 20%+YoY) makes us less concerned about the geopoliticalimpact, 2) change in leadership of Homeland SecurityCommittee to someone who voted against the BiosecureAct improves growth visibility,3) global biotechfundingenvironment recovery, 4) more projects advance to latersustainability. changesExhibit 1: Estimate changes We lift our2026/27/28 revenue estimates by 4%/8%/12% Pharmaron (PHBBF) We derive our PO of HKS38.4 based on DCF analysis, assuming 11.7% WACC, a terminal risk premium (from Bloomberg), 4.9% after-tax cost of debt, 18% long-term effectivetax rate, and a derived cost of equity 12.1%. We apply beta of 1.15. pharma/biotech industry and 3) adverse effect from COVID-19expected number of customers, 3)faster than expected expansion of business. We derive our PO of RMB33.8 based on DCF analysis, assuming 11.7% WACC, a terminal growth rate of 3.0%, 5% debt and 95% equity financing, 4% risk free rate, 7% equityrisk premium (from Bloomberg), 4.9% after-tax cost of debt, 18% long-term effectivetax rate, and a derived cost of equity 12