迈瑞医疗(300760) 　　In2024,Mindray reported revenue of RMB36.7bn(+5.1%YoY)and attributablenet profit of RMB11.7bn(+0.7%YoY).GPM dropped by1.1ppts YoY to63.1%,primarily due to1)pricing pressure on IVD reagents and mid-to low-end medicalequipment,2)weaker IVD testing demand following DRG2.0implementationand inter-hospital recognition of test results.The proportion of revenue from IVDreagent declined in4Q24.The Sino-US trade frictions may raise costs for US-sourced raw materials in2025E,while Mindray is actively seeking substitutes toprotect margins.In1Q25,Mindray’s revenue fell by12.1%YoY to RMB8.2bn,mainly due to1)over20%YoY decline in domestic revenue,as revenuerecognition lagged behind procurement recovery,2)a high overseas revenuebase in1Q24(up nearly30%YoY),resulting in slow1Q25overseas growth of4.3%YoY. 　　Steady growth from overseas.In2024,overseas revenue grew by21.3%YoY to RMB16.4bn,accounting for44.7%of total revenue(+6.0ppts).Ex-North America revenue rose26%YoY to RMB13.8bn,with Asia-Pacificcontinuing as the growth engine.Mindray achieved further breakthroughs inhigh-end markets,with high-end strategic customers contributing14%ofoverseas revenue.With enhanced localization and installations of high-endproducts such as the MT8000,we expect the overseas revenue to grow bya mid-teens percentage in2025E.As the US contributed only~6%ofMindray’s total revenue,the impact of trade frictions may be moderate.Diversified manufacturing across13countries and proactive inventorymanagement should help mitigate related risks. 　　Domestic market remained under pressure.In2024,domestic revenuedecreased by5.1%YoY to RMB20.3bn.Revenue from PMLS and MISsegments fell31%YoY and2%YoY,respectively,due to weak hospitalprocurement.According to IQVIA,China’s medical equipment marketdecreased12.3%YoY in2024.Policy headwinds including DRG2.0,inter-hospital recognition of test results,and reagent price cuts further weighedon IVD revenue.IQVIA estimated a decline in the biochemical market andflat growth in immunology market in2024.Therefore,Mindray’s domesticIVD revenue increased1%YoY in2024.However,Joinchain data shows a67.5%YoY increase in medical equipment bidding value in1Q25,indicatingpotential recovery of domestic medical equipment procurement.Weanticipate the revenue recovery will occur in2H25E,primarily due to thetime lag between the bidding process and revenue recognition. 　　Maintain BUY.Given the uncertainties of the timeline of domesticprocurement recovery and trade frictions,we revise down our earningsforecasts.We expect revenue and attributable net profit to grow9.4%and6.5%YoY,respectively,in2025E.Based on a9-year DCF model,we adjustour TP to RMB249.19(WACC:9.2%,terminal growth rate:3.0%).

　　药明康德(603259) 　　WuXi AppTec reported impressive 1Q25 financial results. Revenue increased by21.0% YoY to RMB9.65bn, with revenue from continuing operations rising by23.1% YoY to RMB9.39bn. Adjusted non-IFRS net profit surged by 40.0% YoY toRMB2.68bn. Both revenue and net profit continued the quarterly improvementtrend seen throughout 2024, which further accelerated significantly in 1Q25. Asof the end of 1Q25, the Company’s backlog grew by 47.1% YoY to RMB52.33bn.Despite ongoing macro uncertainties, mgmt. has reaffirmed its full-year guidance,projecting a 10–15% YoY increase in revenue from continuing operations andexpansion in the adjusted non-IFRS net profit margin. 　　TIDES business gained momentum with strong growth. WuXi AppTec’sTIDES business experienced strong growth 1Q25, with revenue soaring187.6% YoY to RMB2.24bn, an acceleration from the 70.1% growth in 2024.According to mgmt., the growth was driven by the ramp-up of new capacitiesand contributions from oral GLP-1 programs. TIDES backlog more thandoubled, increasing by 105.5% YoY as of 1Q25, providing a solid foundationfor sustained growth. The Company remains on track to expand its peptidecapacity to over 100k liters by the end of 2025. Hence, Mgmt. continued toexpect TIDES revenue to grow more than 60% YoY in 2025. 　　Early-stage business remained under pressure with signs of moderaterecovery. Revenue from Biology segment grew 8.2% YoY in 1Q25, marking asecond consecutive quarter of positive growth, indicating a recovery in clientdemand for drug discovery services. In Chemistry segment, small-molecule drugdiscovery revenue declined 7.1% YoY, an improvement from the 28.7% YoYdrop in 2024. Testing segment remained affected by pricing pressure. Lab testingrevenue slid 4.9% YoY (vs. -8.0% YoY in 2024), with safety assessment revenuefalling 7.8% YoY (vs. -13.0% YoY in 2024). Mgmt. noted that pricing appeared tohave reached a trough, although a meaningful recovery will still take time. 　　Strengthening shareholder returns amid market uncertainties. WuXiAppTec’s Board of Directors has proposed a series of shareholder returninitiatives, including maintaining a 30% annual cash dividend payout ratio,issuing a one-time RMB1bn special dividend in 2025, introducing the interimdividend plan in 2025, and repurchasing and cancelling RMB1bn A-shares(announced on March 17). In addition, the Company announced a secondRMB1bn A-share repurchase and cancellation plan on April 8, which has nowcommenced. Combined, the proposed dividends and share repurchaseprograms total nearly RMB6bn, equivalent to 62% of 2024 attributable netprofit, underscoring WuXi AppTec’s strong commitment to shareholder return. 　　Maintain BUY. Due to the macro uncertainties such as the US-China tradewar, we revise down forecasts and now expect revenue from continuingoperation business to grow by 13.3%/14.9%/15.9% YoY and adjusted nonIFRS net income to grow by 9.7%/17.5%/15.9% YoY in 2025E/ 26E/ 27E,respectively (previously: 14.4%/15.2%/16.3% and 11.7%/19.0%/+16.1%YoY). We thus cut our DCF-based TP from RMB94.05 to RMB77.22 (WACC:9.42%, terminal growth: 2.00%; both unchanged). Our estimates are higherthan Bloomberg consensus, reflecting our confidence in earnings resilience

　　联影医疗(688271) 　　In 2024, United Imaging’s revenue declined 9.7% YoY to RMB10.3bn, withattributable net profit decreasing 36.1% YoY to RMB1.3bn mainly due to thechallenging domestic market environment. Due to delays in equipment renewalpolicies and prolonged industry rectification, the domestic medical equipmentmarket contracted by 12.4% YoY in 2024, according to IQVIA. Despite thechallenging environment, United Imaging’s GPM improved by 1.5 ppts YoY,supported by higher proportion of revenue from mid-to-high-end products (+0.9 pptsequipment GPM) and services (+1.7 ppts GPM from scale/cost optimization). In1Q25, United Imaging achieved turnaround in earnings with revenue andattributable net profit increasing by 5.4% and 1.9% YoY respectively, indicating arecovery in the domestic market. 　　Overseas business remained robust. In 2024, overseas revenue grew 35.1%YoY to RMB2.3bn, accounting for 22.0% of total revenue (+7.3ppts YoY). ExNorth America revenue rose ~28% YoY to RMB1.6bn, accounting for ~71% ofthe total overseas revenue. United Imaging continued to expand in Europeanand emerging markets, with installation breakthroughs in France, Germany, andemerging markets such as South Africa, Morocco, and Brazil in 2024. Its marketshare in India rose to second place. The strong momentum of overseasbusiness persisted in 1Q25, and we expect overseas business to remain a keygrowth driver in 2025E. With North America contributing only ~6% of totalrevenue, the impact of trade frictions may be limited. Proactive inventorymanagement and global supply chain diversification will further help mitigatethe risks of trade tensions. 　　Domestic business was under pressure but signs of recovery haveemerged. In 2024, domestic revenue fell by 17.5% YoY to RMB8.0bn.However, the Company’s market share in domestic imaging equipment(excluding ultrasound and DSA) increased significantly, ranking first in marketshare, with significant share gains (+5ppts) in the high-end market. Domesticprocurement recovered strongly in 1Q25, with the domestic medical equipmentbidding value up 67.5% YoY, according to Joinchain. Given the long revenuerecognition cycle for large equipment, we expect meaningful recovery ofdomestic revenue from 2H25E. 　　Services income grew fast. Services revenue increased by 26.8% YoY toRMB1.4bn in 2024, with revenue contribution growing to 13.2% (+3.8ppts YoY).However, there remains a significant gap compared to GE Healthcare’s 34%service revenue share in 2024, indicating large room for improvement. As of2024, the Company’s global installed base exceeded 34,500 units. Withexpanding installed base, we expect service revenue to maintain rapid growth. 　　Maintain BUY. Given the uncertain pace of domestic market recovery andongoing trade frictions, we revise down our 2024-2027E revenue forecasts to aCAGR of 18.1%.Thus, we adjust our TP to RMB149.83, based on a 9-year DCFmodel (WACC: 8.2%, terminal growth: 4.0%)

　　药明康德(603259) 　　WuXi AppTec reported a YoY revenue decline of 2.73%, to RMB39.2bn, and a2.5% decrease in adjusted non-IFRS net profit, to RMB10.6bn. However,earnings showed encouraging improvement throughout 2024, resulting in apositive revenue and profit growth in 4Q24. The TIDES business remained theprimary growth engine, with full-year revenue up by 70.1% YoY. The Company'sbacklog as of year-end 2024 expanded significantly, growing 47% YoY toRMB49.3bn. Notably, TIDES backlog experienced a substantial 103.9% YoYincrease in 2024. Fuelled by robust order book, management offered a positiveoutlook for 2025, forecasting 10-15% YoY revenue growth in continuingoperations and further enhancement of the adjusted non-IFRS net profit margin. 　　Strong order growth bolsters future revenue visibility. WuXi AppTec'sbacklog at end-2024 grew by a significant 47% YoY, reaching RMB49.3bn.This represents an acceleration from the 35.2% growth seen at the end of3Q24. Positive trends were evident across segments. CDMO businesssecured 25 new Ph3 and commercial projects in 2024 (vs 20 added in 2023).Biology segment returned to positive revenue growth in 4Q24, posting YoYand QoQ increases of 9.3% and 9.2%, respectively, signaling an improvingtrend in early-stage R&D demand. Furthermore, revenue from Top20 globalpharma clients rose by 24.1% YoY (excl. COVID related projects), expeditingfrom the 23.1% growth in 9M24. These metrics underscore the increasingvisibility of the Company's future revenue. Given the positive outlook for futuredemand, the Company plans to boost capex by 75%-100% YoY in 2025 toRMB7-8bn. 　　TIDES business sustains strong growth trajectory. TIDES revenue in2024 climbed 70.1% YoY, with backlog expanded by 103.9% YoY. Underlyingdemand for polypeptide manufacturing remains robust in the market. TheCompany's polypeptide capacity reached 41k liters by end-2024, with plansfor a further increase exceeding 100k liters by late 2025, demonstrating WuXiAppTec’s commitment to meeting the growing customer demand. Mgmtanticipates TIDES revenue growth of over 60% YoY in 2025. 　　Ongoing commitment to shareholder returns. Amidst macroeconomicuncertainties in 2024, WuXi AppTec strengthened its commitment toshareholder returns. The Company completed RMB4.0bn in sharerepurchases and cancellations in 2024 and maintained a dividend payoutratio of 30% for the year. To further enhance returns, mgmt announced a onetime special dividend of RMB1.0bn, alongside a 2025 interim dividend. Mgmtalso indicated plans to repurchase RMB1.0bn of A-shares in 2025. 　　Maintain BUY. We raise our TP from RMB78.51 to RMB94.05 (based on a10-year DCF model with WACC of 9.42% and terminal growth of 2.0%), tofactor in the earnings recovery. We forecast the continuing operation revenueto grow by 14.4%/ 15.2%/ 16.3% YoY and adjusted non-IFRS net income togrow by 11.7%/ 19.0%/ +16.1% YoY in 2025E/ 26E/ 27E, respectively. Our2025E/ 26E/ 27E forecasts of adjusted non-IFRS profit are 6.9%/ 14.9%/19.6% higher than consensus.

　　联影医疗(688271) 　　United Imaging’s 9M24 revenue declined by 6.4% YoY to RMB6,954mn, with 3Q24revenue down by 25.0% YoY to RMB1.6bn. This downturn was primarily due to achallenging domestic market environment, marked by stringent industry regulationsand delays in equipment renewal projects. Attributable net profit in 9M24 decreasedby 36.9% YoY to RMB671mn, with net profit margin falling by 4.7 ppts. Despitethese near-term challenges, United Imaging maintained its R&D expenditures andactively pursued expansion in international markets, which impacted profitability inthe third quarter. Looking forward, as the implementation of equipment renewalprojects has gradually picked up pace, United Imaging's revenue and net profitmargins are expected to significantly improve in 2025E, in our view. 　　Robust overseas growth momentum. In 9M24, United Imaging’s overseasrevenue grew 36.5% YoY to RMB1,404mn, accounting for 20.2% (+6.35 ppts)of total revenue. This accelerated growth continued into the third quarter, withrevenues increasing by 51.7% YoY to RMB471mn. Strong performances werenoted across North America, the Asia-Pacific region, and emerging markets. AsUnited Imaging continues to enhance its overseas localization and servicecapabilities, we believe it is poised to strengthen its global competitiveness,better navigate geopolitical challenges, and sustain rapid growth internationally. 　　Strong growth in recurring revenue. In 9M24, revenue from maintenanceservices increased by 27.3% YoY to RMB967mn, accounting for 13.9% (+3.7ppts) of the total revenue. With a global installed base now exceeding 31,000units, United Imaging's service revenue contribution remains lower comparedto global industry leaders like GE Healthcare (32.9% in 2023) and Philips(27.7% in 2023). However, with the expanding installed base and an enhancedglobal service network, we expect United Imaging’s recurring revenue tocontinue its rapid increase, offering resilience against industry fluctuations. 　　Medical equipment renewal projects set to materialize. Mgmt. has notedthat medical equipment renewal projects began implementation in earlyOctober, with multiple procurement activities underway. Additionally, somepreviously delayed equipment procurements, halted due to policy uncertainties,have now restarted. These developments lay the foundation for a recovery inUnited Imaging’s domestic business in 4Q24 and 2025. However, due tostringent industry regulations, the procurement process has become moreprotracted. The installation and revenue recognition timelines for largeequipment are also relatively long. Consequently, the positive impact of thisprocurement rebound is expected to be primarily reflected in 2025, in our view. 　　Maintain BUY. We expect hospital procurement to recover from 2025 and weare optimistic about the Company's long-term growth potential driven by thecontinued import substitution and strengthened global competitiveness.Therefore, we revise up the terminal growth rate forecast from 3.0% to 4.0%.Based on a 9-year DCF model, we adjust the target price to RMB162.81(WACC: 8.3%, terminal growth rate: 4.0%).

　　迈瑞医疗(300760) 　　Mindray reported9M24revenue of RMB29.5bn,up by8.0%YoY.Attributable netprofit increased by8.2%YoY to RMB10.6bn.Revenue in3Q24grew by1.4%YoY to RMB9.0bn while attributable net profit decreased by9.3%YoY toRMB3.1bn.The slowdown in revenue growth can primarily be attributed tolackluster procurement activities in domestic public hospitals and weakeneddemand for IVD testing,particularly in lower-tier hospitals.Consequently,Mindray's domestic revenue fell by9.7%YoY in3Q24.Additionally,GPM in3Q24decreased by4.8pcts QoQ due to updates in accounting guidelines. 　　Domestic market remained under pressure,although signs of recoveryin procurement are emerging.1)IVD:Domestic revenue grew by17%YoYin9M24.Nationwide DRG implementation had a negative impact on thediagnosis demand in lower-tier hospitals which were the main contributors toMindray's domestic IVD revenue.To counter act this,Mindray activelyexpanded its IVD business into top hospitals through its TLA and IT solutions.We expect Mindray to install over150TLAs in2024E.2)MIS:Domesticrevenue grew by over10%YoY in9M24driven by the strong volume ramp-up of ultra-high-end Resona A20ultrasound system.3)PMLS:Domesticrevenue decreased by28%YoY in9M24.The decline was influenced by 　　environment.However,with accelerated issuance of special bonds,andstronger government support to address local debt issues,we expectdomestic equipment demand to recover in2025E. 　　Healthy growth in overseas business.In3Q24,Mindray’s overseasrevenue increased by18.6%YoY with strong performances in Europe(+29%YoY),APAC(+32%YoY)and LatAm(+25%YoY),although there was someweakness in the US market.Driven by breakthroughs in medium-to-largevolume labs,Mindray’s overseas IVD revenue increased by32%YoY in9M24,accounting for28%of total overseas revenue.Mindray hasaccelerated its overseas localization efforts.As of3Q24,Mindray launchedlocal manufacturing in9countries,8of which are related to IVD.Additionally,emerging businesses such as minimally invasive surgery(+50+%YoY),AED(+50+%YoY)and animal medical(+30+%YoY)grew significantly in9M24.These emerging businesses contributed over10%to Mindray’s overseasrevenue.We expect IVD and emerging businesses to become the primarygrowth drivers for Mindray’s overseas businesses. 　　Maintain BUY.We lowered our earnings forecasts with target price adjustedto RMB328.81(WACC:9.3%,terminal growth rate:3.0%).

　　药明康德(603259) 　　WuXi AppTec reported 3Q24 revenue of RMB10.46bn, slightly down 2.0% YoY,and attributable adjusted non-IFRS net profit of RMB2.97bn, down 3.2% YoY.Total non-COVID revenue and non-COVID Chemistry revenue growth reboundedto 14.6% YoY and 26.4% YoY, respectively, in 3Q24. Despite the challenginggeopolitical environment, mgmt. reiterated its revenue guidance of RMB38.3-40.5bn for 2024, indicating 2.7%~8.6% YoY non-COVID revenue growth.Additionally, mgmt. reiterated its commitment to maintaining an adjusted nonIFRS net profit margin consistent with the levels achieved in 2023. 　　Strong global competitiveness led to fast order growth. As of 3Q24, WuXiAppTec's backlog climbed to RMB43.82bn, representing a YoY increase of35.3%, maintaining the encouraging momentum of 33.2% YoY growth(excluding COVID-19 commercial projects) in 1H24. The rapid backloggrowth signified the enduring trust that global clients place in WuXi AppTec'shigh-quality and efficient services. This is further evidenced by a robust 23.1%YoY rise in revenues from global Top 20 pharmaceutical companies in 9M24,a notable acceleration from the 11.9% growth observed in 1H24.Management has indicated that 80% of the backlog is expected to convertinto revenue within the next 12 to 18 months, providing strong earningsvisibility for WuXi AppTec in 4Q24 and throughout 2025, in our view. 　　TIDES continues to exhibit strong growth. TIDES revenue grew by 71.0%YoY in 9M24, with the growth accelerating to 98.6% YoY in 3Q24. The TIDESbacklog as of 3Q24 saw a substantial YoY increase of 196%. In Jan 2024,WuXi AppTec expanded its peptide production capacity from 10k liters to 32kliters, with plans to expand to 41k liters by the end of 2024 and further to 100kliters by 2025. This ambitious expansion underscores WuXi AppTec'scommitment to meeting the rapidly growing global demand for peptideservices, positioning TIDES as the strongest growth driver for the Companythrough 2026. 　　Overseas peers struggle to compete with Chinese chemical CDMOs inthe medium term. In our in-depth report published on 21 Oct 2024, weanalyzed the business fundamentals of 30 companies from Europe, the US,and India engaged in API and chemical CDMO services. The findings revealthat these companies significantly trail WuXi AppTec in terms of businessscale and capacity. Specifically, most Indian peers primarily offer bulk andspecialty APIs, with limited capabilities in supporting innovative drugs R&D.Meanwhile, European firms, despite having an established pharmaceuticalmanufacturing base with several well-known chemical CDMOs, tend to focusmore on formulation instead of API. Their manufacturing sites, primarilylocated in Central and Western Europe, face higher labor costs compared toWuXi AppTec, further disadvantaging them in the competitive market. 　　Maintain BUY. Factoring in the positive trend of customer demand, we lift ourTP from RMB67.72 to RMB72.37 (based on a 10-year DCF model withWACC of 9.42% and terminal growth of 2.0%). We forecast revenue to growby -3.6%/ +11.4%/ +13.6% YoY and adjusted non-IFRS net income to growby -3.9%/ +11.9%/ +15.5% YoY in 2024E/ 25E/ 26E, respectively.

　　迈瑞医疗(300760) 　　Mindray achieved a revenue of RMB20.5bn in 1H24, marking an 11.1% increaseYoY, and reported an attributable net profit of RMB7.6bn, up 17.4% YoY. Despite theongoing regulatory adjustments in the healthcare industry and the delay in medicalequipment renewals projects, which have led to a cautious approach towards biddingand procurement activities in public hospitals, the revenue from domestic equipmentbusiness decreased by 12% YoY. However, thanks to the rapid growth of the IVDbusiness and the domestic high-end/ultra-high-end ultrasound business, Mindray stilldemonstrated strong resilience and steady growth. The increase in the revenue sharefrom IVD reagents and high-end ultrasounds drove the Company's gross margin upby 0.7 ppt YoY to 66.3% in 1H24. Additionally, Mindray announced a mid-termdividend plan, distributing a total cash dividend of approximately RMB4.9bn, whichrepresents a payout ratio of more than 65%, indicating an ongoing increase in thedividend payout. 　　Domestic equipment business faces pressure. In 1H24, the continued delayin bidding and procurement activities led to a 12% YoY decrease in revenue fromdomestic equipment business. Due to the high market share of Mindray's PatientMonitoring and Life Support (PMLS) products in China, the domestic businesswas significantly affected by the industry environment, with the PMLS segmentexperiencing a 7.6% YoY decrease in revenue, including about a 20% drop indomestic revenue. The Medical Imaging segment benefited from the volumeincrease of the first domestic ultra-high-end ultrasound Resona A20 and otherhigh-end ultrasounds, resulting in a 15.5% YoY revenue growth in this segment,with high-end and ultra-high-end ultrasound revenues increasing by over 40%. 　　Accelerating the shift towards consumables-related business. In 1H24, theIVD reagent business was minimally affected by domestic industry regulation,with revenue increasing by 28% YoY to RMB7.7bn, accounting for over 37% oftotal revenue. Domestic IVD revenue grew by over 25%, and domestic reagentrevenue increased by 30%, with reagent revenue representing over 80% ofdomestic IVD revenue. Internationally, Mindray successfully penetrated over 60overseas third-party chain laboratories in 1H24 and installed the first MT 8000TLA, driving a more than 30% YoY increase in overseas IVD revenue. We believethat the continuous increase in domestic diagnostic demand and theimplementation of IVD VBP are expected to help Mindray rapidly expand itsdomestic market share, while accelerated cooperation with high-end clients willsupport long-term rapid growth of the IVD overseas market. Additionally, theminimally invasive surgery business grew by 90% YoY in 1H24. The Company’sacquisition of APT Medical also filled the gap in its cardiovascular consumablesbusiness. Currently, consumables-related businesses led by IVD already accountfor over 50% of the Company’s domestic revenue. 　　Maintain BUY. We believe that industry regulation has not affected the essentialdemand for hospital procurement. As industry regulation becomes normalizedand equipment renewal policies are implemented, hospital procurement isexpected to gradually recover. Based on a 9-year DCF model, we adjust thetarget price to RMB 352.84 (WACC: 10.3%, perpetual growth rate: 3.0%).

　　联影医疗(688271) 　　United Imaging reported 1H24 revenue of RMB5,333mn, up by 1.2% YoY.Attributable net profit increased by 1.3% YoY to RMB950mn. Despite facing achallenging domestic market environment characterized by stringent industryregulations and delays in equipment renewal projects, United Imaging deliveredresilient performance thanks to the rapid growth of overseas business andmaintenance services. The rising revenue contribution from mid-to-high-endproducts and services drove the company's gross margin up by 1.7ppts YoY to50.4% in 1H24. Additionally, United Imaging announced an interim dividend plan,committed to distributing a total cash dividend of approximately RMB98.2mn, whichrepresents a more than 10% payout ratio. 　　Market share expanded in domestic medical equipment market. In 1H24,United Imaging’s equipment revenue decreased by 1.8% YoY toRMB4,540mn, primarily due to the delays in procurement activities. However,leveraging its product innovation and new product commercialization, thecompany’s high-end and ultra-high-end products gained market share. Forinstance, the market share of mid-to-high-end and ultra-high-end CT systemincreased by 11ppts YoY and 8ppts YoY, respectively. Its 3.0T MRI systemsalso gained 1.3ppts in market share of 3.0T MRI market. The companycontinues to hold a significant lead in ultra-high-filed MRI market with its 5.0TMRI system and saw a 5.3ppts YoY increase in market share of RT systems. 　　International operations sustained strong growth momentum. In 1H24,the company's overseas business achieved revenue of RMB933mn, up 29.9%YoY, accounting for 17.5% (+3.9ppts) of total revenue. The company deliveredrobust performance in Asia-Pacific, North America, and emerging markets,where revenues grew over 40% YoY, 26% YoY, and 132% YoY, respectively.Despite a 30% decrease in revenue from Europe due to seasonal fluctuations,efforts aimed at localizing operations in key European markets such as France,Italy, Germany, and Spain are anticipated to drive recovery in 2H24. 　　Growing contribution from services. In 1H24, revenue from maintenanceservices increased by 23.8% YoY to RMB617mn, accounting for 11.6%(+2.1ppts YoY) of the total revenue. Currently, United Imaging’s global installedbase has exceeded 20,000 units. With a growing installed base, we expect theservices revenue will continue to increase rapidly. 　　Maintain BUY. We expect hospital procurement to gradually recover from4Q24. Based on a 9-year DCF model, we adjust the target price to RMB 125.83(WACC: 8.8%, perpetual growth rate: 3.0%).

　　药明康德(603259) 　　WuXi AppTec reported 1H24 revenue of RMB17.24bn, down 8.6% YoY,attributable recurring net profit of RMB4.41bn, down 8.3% YoY, and attributableadjusted non-IFRS net profit of RMB4.37bn, down 14.2% YoY. 1H24 revenue /attributable adjusted non-IFRS net income accounted for 45.3%/ 46.0% of our2024 full-year estimates and 43.8%/ 44.7% of Bloomberg consensus, both ofwhich were largely in line with its historical range. The non-COVID D&M revenue(within the Chemistry segment) experienced a slight decline of 2.7% YoY in1H24, following a relatively high base in 1H23. Notably, WuXi AppTec’s backlog,excluding COVID-19 commercial projects, increased by 33.2% YoY in 1H24,indicating strong customer demand amid geopolitical uncertainties. Mgt. hasreiterated its revenue guidance of RMB38.3-40.5bn for 2024, forecasting YoYgrowth of 2.7% to 8.6% for revenues excluding COVID-19 commercial projects.Mgt. expects the adjusted non-IFRS net profit margin to align with the 2023level. 　　Impressive order growth driven by solid demand. As of June 2024, WuXiAppTec's backlog reached RMB43.1bn, marking a robust YoY increase of33.2% excluding COVID-19 commercial projects. Revenue from its globalTop20 pharmaceutical clients reached RMB6.59bn, contributing 38.2% ofthe total revenue and increasing by 11.9% YoY excluding COVID-19commercial projects. Mgt. highlighted that over 80% of the backlog wasexpected to convert into revenue within the next 18 months, which shouldalleviate market concerns about clients' early bookings due to geopoliticalconsiderations (with the ATU segment being an exception). Additionally,mgt. indicated that new orders signed in 1H24 increased by ~25% YoY. Thestrong order growth demonstrates the resilient demand for WuXi AppTec'shigh-quality services, indicating a positive outlook for FY25 growth. 　　TIDES business continued to be a major growth engine. Revenue ofTIDES business reached RMB2.08bn in 1H24, demonstrating robust YoYgrowth of 57.2%, following a significant 64.4% YoY increase in 2023. As ofJune 2024, the TIDES backlog grew substantially by 147% YoY. In January2024, the Company’s new peptide production facilities commencedoperation, which expanded its total capacity to 32,000 liters, positioning theCompany as a leader in global TIDES CDMO. With the robust backlog andreadily available production capacity, mgt. expects TIDES revenue to growby over 60% YoY in 2024 and to maintain the strong momentum in 2025.Our model projects TIDES revenue to exceed RMB8.6bn in 2025,contributing ~20% to WuXi AppTec’s total revenue, a significant increasefrom ~4% in 2022. 　　Maintain BUY. Factoring in the positive trend of customer demand, we liftour TP from RMB53.23 to RMB54.27 (based on a 10-year DCF model withWACC of 10.38% and terminal growth of 2.0%). We forecast revenue togrow by -4.4%/ +10.9%/ +10.8% YoY and adjusted non-IFRS net income togrow by -8.3%/ +11.6%/ +12.1% YoY in 2024E/ 25E/ 26E, respectively