Yamato: Raise WuXi AppTec (02359) target price to 138 Hong Kong dollars. Third-quarter performance surpasses expectations.

Daiwa Research report stated that WuXi AppTec (02359) third quarter revenue increased by 15% year-on-year to 12.1 billion yuan, net profit increased by 53% year-on-year to 3.5 billion yuan, both higher than market expectations by 5% and 15%, mainly due to a 23% year-on-year growth in the chemical business, and a 7.8 percentage point increase in gross profit margin. The company raised its full-year guidance for operating revenue from a growth of 13-17% to a growth of 17-18%, and the total annual revenue target from 42.5-43.5 billion yuan to 43.5-44 billion yuan. The bank maintains a "buy" rating; based on the forecast increase in gross profit margin, the target price has been raised from 134 Hong Kong dollars to 138 Hong Kong dollars.