Daiwa: Slightly raises WuXi AppTec (02359) target price to HK$232; third-quarter results again beat expectations

Daiwa released a research report stating that WuXi AppTec's (02359) third-quarter results again beat expectations, and the company once again raised its guidance. The report reiterates a "Buy" rating, slightly raises the target price from HK$230 to HK$232, and reiterates the stock as its top pick among CXO shares. The bank also raised WuXi AppTec's earnings per share forecasts for 2026 to 2028 by 4% to 7% to reflect stronger growth prospects. The bank noted that the biggest positive surprise was the significant acceleration in backlog growth in the third quarter, up 36.4% year-on-year, higher than the 25.2% year-on-year growth in the first half. The company also accelerated capacity expansion to support backlog growth, and the lower end of its 2026 capital expenditure guidance was raised from RMB7.5 billion to RMB8 billion. The bank noted that the third-quarter gross profit margin was 54.1%, maintaining a historical high level, but management said that the commissioning of new capacity and macroeconomic uncertainties such as U.S. dollar depreciation may cause short-term fluctuations in the gross profit margin, so it maintained prudent net profit guidance.