Release Date: March 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Genscript Biotech Corp (GNNSF, Financial) achieved a significant net profit of around $2.9 billion, primarily due to a one-time investment gain from the deconsolidation of Legend Biotech.
- The Life Sciences group's revenue grew by 10.2% year over year, driven by strong demand from AI-related applications and antibody drug research.
- The company has a robust R&D focus, with 10% of its workforce dedicated to research and development, leading to over 250 patents and more than 480 patents in the application process.
- Genscript Biotech Corp (GNNSF) has made significant strides in ESG, joining the United Nations Global Compact and receiving a bronze medal from the Pharmaceutical Supply Chain Initiative.
- The protein segment experienced nearly 50% revenue growth, attributed to operational excellence and a proactive marketing strategy.
Negative Points
- Probio's revenue declined by 13.2% year over year, primarily due to a challenging biotech funding environment.
- The company faced geopolitical tensions and industry challenges, impacting the first half of 2024.
- There was a significant rise in administrative expenses due to the new facility in Hopewell, US, which was not yet fully operational in 2024.
- The aggressive market pricing strategy led to a flat gross margin outlook for 2025, despite expected revenue growth.
- The deconsolidation of Legend Biotech resulted in a loss being recorded under discontinued operations, impacting the financial statements.
Q & A Highlights
Q: What are the recent trends and outlook for 2025 in domestic and overseas markets, and is there any ongoing pricing pressure? Also, could you provide a net margin outlook for the major business segments?
A: We expect faster growth in Europe and the US, while growth in China and Asia Pacific will be more moderate. For 2025, we target 10-15% growth for the life sciences business with a flat gross margin. The profile business, excluding the Lenovo deal, is expected to grow 15-20%. We are not providing margin guidance for Profile at this moment. For Best Time, we target 20-25% growth with a 45% gross margin.
Q: What is the mid to long-term outlook for the BSG business, given its strong growth in recent years?
A: We are confident in maintaining the growth trend, driven by continuous R&D investments, new product launches, and expansion in overseas markets. We expect to sustain over 20% year-on-year growth in the next three years.
Q: How do global tariffs impact your business, and what drives the aggressive marketing pricing strategy for the Life Science group?
A: Tariffs do not significantly impact our business as we compete on quality, delivery speed, and value. Our aggressive pricing strategy is driven by global competition and the need to gain market share. The protein business has higher margins due to its value-added services.
Q: Can you explain the differences in gross profit margins between the protein business and the gene synthesis business?
A: The protein business offers higher margins due to its ability to deliver from sequence to purified proteins quickly and with premium quality. This value addition allows us to capture higher profits compared to the gene synthesis business.
Q: What is the CapEx plan for 2025, and how should we think about CapEx spending in the next few years?
A: For 2025, CapEx spending will be roughly flat compared to 2024. Probu CapEx will decrease, while Life Sciences will see some increase outside China. Best Time will see significant CapEx increases to accommodate growth. Over the next three years, CapEx will gradually decrease as utilization increases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
