Goldman Sachs: Raises target price for Pharmaron Beijing (03759) to HK$33.2, maintains "Buy" rating.

Goldman Sachs released a research report stating that the target price for Pharmaron Beijing (03759) has been raised from HKD 29.2 to HKD 33.2, maintaining a "Buy" rating. The upward guidance reflects improvements in fundamentals and enhanced earnings visibility, leading to a corresponding increase in Pharmaron Beijing's adjusted net profit forecasts for 2026 to 2028 by 3%, 5.1%, and 4.9%. The company's revenue in the second quarter grew by 20.2% year-on-year, primarily driven by the continued strength of its CDMO business; the adjusted net profit margin increased from 12.2% in the same period last year and 11.4% in the first quarter of this year to 12.5%. The profit margins for CDMO and clinical development business reached 26.8% and 12.1%, respectively, with quarter-on-quarter improvements that helped offset the decline in profit margins for laboratory services affected by exchange rate factors. Goldman Sachs noted that the momentum for new project orders at Pharmaron Beijing remains strong, with a total year-on-year growth of 30%, including a 50% increase in CDMO. The robust backlog and improvements in project conversion are driving the company to raise its full-year revenue growth guidance from 12%-18% to 15%-20%, with expectations that profit margins will continue to improve quarter-on-quarter in the second half of the year as more late-stage CDMO projects are delivered.