BOCOM INTL: Maintains Buy rating on Asymchem Laboratories (06821), raises target price to 123.2 Hong Kong dollars.

BOCOM INTL released a research report stating that based on Asymchem Laboratories' 2026 performance guidance, the profit forecast for 2026-27 has been revised upwards. The target price has been raised by 8% to 123.2 Hong Kong dollars / 145.3 RMB based on the exit valuation discount method and a 21 times exit P/E ratio, with a maintained buy rating. The company's performance in key emerging business tracks in 2025 was impressive, with significant international layout achievements. The revenue growth guidance of around 20% for 2026 exceeds the expectations of the bank and the market. The company's forward-looking capacity layout in high-visibility tracks is rapidly expanding and is expected to bring strong long-term high-growth certainty. The main points of BOCOM INTL are as follows: The performance in 2025 returned to a high growth channel, with the 2026 guidance exceeding expectations The company's revenue in 2025 was 6.67 billion RMB, a year-on-year increase of 14.9%; Adjusted net profit attributable to the mother increased by 56% to 1.25 billion RMB, exceeding the bank's expectations. In which: 1) small molecule CDMO business increased by 4% year-on-year, with a gross margin of 47%, leading the industry; the company delivered a total of 445/70/59 pre-clinical and clinical early/Phase III/commercial projects throughout the year (vs. 383/73/48 in 2024), with an expected 16 more PPQ projects in 2026, laying the foundation for future commercial orders; 2) revenue from emerging businesses increased by 57% year-on-year, accounting for about 8 percentage points of revenue, with gross profit margin significantly increased by 8.5 percentage points to 30%; overseas revenue increased by over 240% year-on-year, indicating significant international expansion. As of the end of March 2026, the company's total order backlog increased by 32% year-on-year to 1.39 billion US dollars. Looking ahead to 2026, management expects full-year revenue to increase by 19-22% year-on-year (taking into account the potential negative impact of exchange rate fluctuations on growth of around 2-3 percentage points), with capital expenditures expected to increase significantly to around 2.1 billion RMB (about 70-80% of which will be used for the expansion of chemical/biological large molecule CDMO business). The explosive growth of key emerging business tracks and the rapid global capacity layout drive medium to long-term high-growth visibility In 2025, the company's emerging businesses showed strong growth: 1) Revenue from chemical large molecule CDMO business increased by 124% year-on-year to 1.03 billion RMB, with a 128% increase in order backlog; the first peptide project was launched in 2025 and started commercial supply, with expectations of advancing 4 more peptide PPQ projects in 2026; 20 oligonucleotide projects are in late-stage clinical trials; the first ADC drug has entered commercialization, with expectations of another 4 ADC projects entering commercialization in 2026; 2) Revenue from biological large molecule CDMO business increased by 96% year-on-year to 290 million RMB, with a 56% increase in order backlog. In high-visibility tracks such as peptides, oligonucleotides, and ADCs, the company is proactively deploying capacity to support rapid order filling and performance growth: the total production capacity of solid-phase peptide synthesis is expected to increase to 69,000L by the end of 2026 (up from 45,000L at the end of 2025); oligonucleotide capacity has reached 120mol, with expectations of increasing to 180mol by the end of 1H26; the commercial ADC workshop in Fengxian Phase I is expected to be delivered in 2Q26.