BOCI Research: Raises Target Price of WuXi AppTec (02359) to 127 Hong Kong Dollars, Third Quarter Performance Exceeds Expectations.

CICC International released a research report, raising WuXi AppTec (02359) 2025 to 2027 profit forecast by 2.4 to 6.4%, H-share target price from 122 Hong Kong dollars to 127 Hong Kong dollars, corresponding to a forecasted P/E ratio of 18 times for next year. Maintaining a "buy" rating. The bank stated that WuXi AppTec's third-quarter performance exceeded expectations, continuing the strong momentum from the first half of the year, with revenue increasing by 15% year-on-year to 12.1 billion RMB, and net profit increasing by 53% year-on-year to approximately 3.5 billion RMB, mainly benefiting from the volume increase in later-stage clinical and commercial projects. The gross profit margin increased by 7.8 percentage points year-on-year to 49.8%. The report noted that excluding the impact of foreign exchange, WuXi AppTec's new orders increased by 18% year-on-year. The backlog size reached 60 billion RMB, an increase of 41% year-on-year, and is expected to gradually convert within 18 months, supporting growth visibility in 2026. Management has raised the full-year revenue growth guidance to 17% to 18% (previously 13% to 17%). WuXi AppTec's management has raised the 2025 free cash flow guidance to 8 to 8.5 billion RMB; and reduced capital expenditure to 5.5 to 6 billion RMB due to schedule adjustments. Global expansion is steadily progressing, including the expected production of the Singapore API factory in 2027, the expected production of the US formulation factory by the end of 2026, and the expansion of the Swiss base. Management pointed out that cross-border customer demand remains stable.