Financial Data and Key Metrics Changes - Revenue from continuing operations grew 23.1% year over year to RMB9.39 billion, while total revenue achieved RMB9.65 billion, representing a 21% year over year growth [9] - Adjusted non-IFRS net profit grew 40% year over year to RMB2.68 billion, with a record backlog for continuing operations of RMB52.33 billion, growing 47.1% year over year [9][10] - Adjusted IFRS gross profit margin reached 41.9%, with net profit attributable to the owners of the company increasing by 89.1% year over year [26][27] Business Line Data and Key Metrics Changes - Wuxi Chemistry's CRDMO business revenue grew 32.9% year over year to RMB7.39 billion, with adjusted non-IFRS gross profit margin improving 4.2 percentage points year over year to 47.5% [11][12] - Small molecule DNM business revenue grew 13.8% year over year to RMB3.85 billion, with both Changzhou and Taishin API manufacturing sites passing FDA inspections [13] - Tides business achieved RMB2.24 billion revenue in the first quarter, representing a strong growth of 187.6% year over year [14] Market Data and Key Metrics Changes - Revenue from the U.S. market grew 28.4% year over year, while revenue from Europe grew 26.2% year over year; however, China showed a slight decline [10] - Revenue generated from clinical CRO and SMO business was down 2.2% year over year to RMB0.61 billion, attributed to market price impact [21][22] Company Strategy and Development Direction - The company will continue to focus on the CRDMO business model with an emphasis on operational efficiency and exceptional services [29] - Full year guidance is maintained, expecting revenue from continuing operations to resume double-digit growth of 10% to 15% year over year, targeting total revenue of RMB41.5 billion to RMB43 billion [30] - The company plans to accelerate global D and M capacity expansion, with CapEx expected to reach RMB7 billion to RMB8 billion [30] Management Comments on Operating Environment and Future Outlook - Management acknowledges the dynamic and complex global environment, emphasizing the need for operational resilience [29] - Despite external uncertainties, the company maintains confidence in its business model and operational capabilities [30] - The management team is committed to enhancing shareholder value through dividends and share repurchase plans [31][32] Other Important Information - The company plans to maintain a 30% annual cash dividend payout ratio of net profit, totaling approximately RMB2.8 billion, along with a one-time special cash dividend of RMB1 billion [31] - The company will repurchase and cancel RMB1 billion worth of A shares when appropriate in 2025 [32] Q&A Session Summary Question: What are the key drivers behind the robust growth in Tides? - The growth is attributed to both strong demand and capacity ramping up from a low base last year [37] Question: How does the company view the impact of tariffs on business segments? - Tariffs are seen as a systemic challenge, with less than 10% of total revenue coming from exports to the U.S. [45][46] Question: What is the expected CapEx distribution for 2025? - CapEx will focus on expanding new modality and small molecule capacities in China, Singapore, and the U.S., with over 70% allocated to D and M manufacturing capacity expansion [54] Question: How does the company plan to address pricing pressures in testing and biology segments? - The company aims to focus on contracts with higher margins and differentiation strategies to improve margins gradually [68] Question: What is the expected revenue contribution from late-stage D and M projects? - Specific numbers are difficult to provide, but the company expects sustained growth from its CRDMO business model [71]

Core Viewpoint - Nomura maintains a target price of HKD 84.59 and a "Buy" rating for WuXi AppTec (02359.HK) following strong performance in Q1 2025, with revenue and profit growth returning to double digits and a 47% year-on-year increase in order backlog [1] Financial Performance - WuXi AppTec's Q1 revenue increased by 21% year-on-year to RMB 96.5 billion, which is considered optimistic despite a low base in Q1 2024 [1] - By business segment: - Chemical business revenue reached RMB 7.39 billion, up 32.9%, driven by strong growth in TIDES business, which saw a revenue increase of 187.6% to RMB 2.24 billion [1] - Testing business sales decreased by 4.9% year-on-year to RMB 1.29 billion, reflecting ongoing pricing pressure [1] - Biological business revenue was RMB 607 million, showing an 8.2% year-on-year increase [1]

Investment Rating - The report maintains a "Buy" rating for the company [7][8] Core Views - The company reported a significant revenue growth of 20.96% year-over-year (yoy) in 1Q25, reaching 9.655 billion RMB, with a net profit increase of 89.06% yoy to 3.672 billion RMB [1] - The company expects a revenue growth acceleration in 2025-2026, driven by a strong order backlog and the performance of its TIDES business [1][2] - The TIDES segment showed remarkable growth, with a revenue increase of 187.6% yoy in 1Q25, contributing to the overall positive outlook for the company's performance [3] Summary by Sections Financial Performance - In 1Q25, the company achieved a revenue of 9.655 billion RMB, with a net profit of 3.672 billion RMB, and an adjusted non-IFRS net profit of 2.68 billion RMB, reflecting a 40.0% yoy increase [1] - The company’s order backlog reached 52.33 billion RMB in 1Q25, representing a 47.1% yoy increase [2] Business Segments - WuXi Chemistry's revenue in 1Q25 was 7.39 billion RMB, up 32.9% yoy, with a non-IFRS gross margin of 47.5% [3] - The TIDES business saw a significant increase in orders, with a backlog growth of 105.5% yoy in 1Q25 [3] Profitability and Valuation - The report forecasts net profits of 11.794 billion RMB for 2025, with a projected growth of 24.80% yoy [5] - The company’s valuation is based on a sum-of-the-parts (SOTP) approach, estimating a fair value of 269.44 billion RMB for A-shares and 278.28 billion HKD for H-shares [12]

Group 1 - The core viewpoint of the articles highlights the positive performance of the biopharmaceutical sector, particularly driven by the strong earnings report from WuXi AppTec, which reported a revenue of 9.655 billion yuan, a year-on-year increase of 20.96%, and a net profit of 3.672 billion yuan, up 89.06% [1] - The National Biopharmaceutical Index (399441.SZ) saw an increase of 0.61%, with key stocks like Kylin and WuXi AppTec rising over 6% and 5% respectively [1] - The Biopharmaceutical ETF (159859) experienced a slight increase of 0.59%, with a trading volume of 42.4373 million yuan and a total circulation size of 3.412 billion yuan, making it the largest and most liquid product in its category [1] Group 2 - The Innovation Drug Hong Kong-Shenzhen ETF (517380) rose by 0.52%, while the Medical Equipment ETF (159873) saw a slight decline [2] - Minsheng Securities indicated that the pharmaceutical sector is experiencing a sustained upward recovery, with a focus on innovative drug growth, particularly in areas such as anti-tumor, autoimmune, GLP-1, stem cells, and gene therapy [2] - Huafu Securities noted that innovative drugs are the most consensus-driven direction for increased holdings, with the pharmaceutical sector showing signs of a bottom reversal trend after four years of adjustment, making it a key area for investment [2]

Core Viewpoint - WuXi AppTec (药明康德) reported strong Q1 2025 results, with revenue of 9.65 billion yuan, a 21% year-on-year increase, and adjusted non-IFRS net profit of 2.68 billion yuan, up 40% year-on-year [1][3] Group 1: Financial Performance - The company maintained its annual performance guidance of 10%-15% growth for 2025, expecting total revenue to reach 41.5-43 billion yuan despite a challenging market environment [3][4] - In Q1 2025, WuXi AppTec's adjusted non-IFRS gross profit and net profit grew by 31% and 40% respectively, with operating cash flow reaching 3.03 billion yuan, a 41.8% increase year-on-year [7][10] Group 2: Business Model and Strategy - WuXi AppTec's integrated CRDMO platform allows it to provide high-quality services across all stages of drug development, which is a significant competitive advantage [4][10] - The company plans to invest 7-8 billion yuan in capital expenditures in 2025, focusing on expanding its capabilities and production capacity globally, including new facilities in Middleton, USA, and Singapore [10] Group 3: Shareholder Returns - The company has executed three share buybacks since last year, totaling 3 billion yuan, reflecting its strong management and strategic choices [5][10] - Over the past three years, WuXi AppTec has returned over 11.3 billion yuan to shareholders, with more than 70% of its free cash flow directed towards investor returns [10]

Core Viewpoint - UBS has raised the target price for WuXi AppTec to HKD 82.5 and maintains a "Buy" rating based on the company's strong Q1 performance and consistent guidance for the year [1] Financial Performance - WuXi AppTec's Q1 performance exceeded expectations, with the company maintaining its revenue guidance for the year, projecting a year-on-year growth of 10% to 15%, amounting to RMB 41.5 billion to RMB 43 billion [1] - The company has set its capital expenditure target at RMB 7 billion to RMB 8 billion and free cash flow at RMB 4 billion to RMB 5 billion [1] Earnings Forecast - UBS has slightly adjusted its earnings model, lowering the earnings per share (EPS) forecast for this year from RMB 4.15 to RMB 4.12, while maintaining the EPS forecast for next year at RMB 4.71 [1] - The EPS forecast for 2027 has been slightly increased from RMB 5.37 to RMB 5.38 [1]

Group 1 - WuXi AppTec, a leading player in the CXO sector, reported better-than-expected performance with double-digit growth in both revenue and net profit, maintaining a revenue guidance of RMB 41.5 billion to RMB 43 billion for 2025 [1] - In 2024, WuXi AppTec generated RMB 16.64 billion from the top 20 global pharmaceutical companies, highlighting its significant role in the global CXO market [1] - The Hong Kong innovation drug index saw a significant drop in P/E ratio from 64 times on February 21 to 27 times on April 28, indicating a strong value proposition for investors [1] Group 2 - The innovation drug ETF (159992) tracks an index that includes leading companies in the innovation drug industry, benefiting from trends such as AI-enabled drug development and the international expansion of domestic innovative drugs [2] - According to Insight database, there were 79 new drug license-out transactions in 2024, with 24 transactions completed in the first five months of 2025, totaling over USD 2 billion, showcasing the growing international recognition of Chinese innovative drugs [2] - Chinese pharmaceutical companies are demonstrating strong competitiveness in the global market through high-standard R&D, particularly in areas like antibodies and ADCs [2]

Group 1 - WuXi AppTec (603259) has seen its stock price increase by 5.08% [1] - The Biopharmaceutical ETF (159839) holds 12.31% of WuXi AppTec's shares, currently showing a gain of 0.94% [1] - The trading volume for WuXi AppTec reached 6.449 million yuan, with an increase of 27.3 million shares in the past month [1] Group 2 - The market is focusing on leading companies, suggesting that investors should consider buying index ETFs to capitalize on rebounds [1]

Core Viewpoint - The healthcare sector is experiencing a strong upward trend, with significant growth in key companies and ETFs, particularly driven by the performance of WuXi AppTec and the overall positive market sentiment towards innovative pharmaceuticals [3][4]. Group 1: Market Performance - The Hang Seng Healthcare Index (HSHCI) rose by 1.54%, with notable increases in stocks such as WuXi AppTec (up 4.98%) and Kelun-Biotech (up 4.17%) [3]. - The Hang Seng Healthcare ETF (513060) increased by 1.26%, with a latest price of 0.48 yuan and a turnover rate of 2.11%, amounting to a transaction volume of 226 million yuan [3]. - Over the past month, the average daily trading volume of the Hang Seng Healthcare ETF reached 1.986 billion yuan, ranking first among comparable funds [3]. Group 2: Company Financials - WuXi AppTec reported a strong Q1 performance with revenue of 9.655 billion yuan, a year-on-year increase of 20.96%, and a net profit of 3.672 billion yuan, up 89.06% [3]. - This marks the first time since Q4 2022 that WuXi AppTec achieved double-digit growth in both revenue and net profit [3]. Group 3: ETF Performance and Metrics - The Hang Seng Healthcare ETF has a current scale of 10.648 billion yuan, ranking in the top third among comparable funds [4]. - The ETF's net value increased by 32.62% over the past year, with a maximum monthly return of 28.34% since inception [4]. - The ETF's Sharpe ratio for the past year is 1.73, indicating strong risk-adjusted returns [5][6]. Group 4: Valuation and Holdings - The Hang Seng Healthcare Index has a current price-to-earnings ratio (PE-TTM) of 24.1, which is below 95.29% of the historical data over the past year, indicating a low valuation [6]. - The top ten weighted stocks in the index account for 57.31% of the total, with significant contributions from companies like WuXi Biologics and BeiGene [6][8].

Market Performance - The CSI Hong Kong Stock Connect Healthcare Index (930965) increased by 1.66% as of April 29, 2025, with notable gains from WuXi AppTec (02359) up 5.07%, and 3SBio (01530) up 4.41% [1] - The Hong Kong Healthcare ETF (159718) rose by 1.84%, closing at 0.72 yuan, with a weekly increase of 4.28% as of April 28, 2025 [1] - The CSI Pharmaceutical and Medical Device Innovation Index (931484) saw a rise of 0.51%, with significant increases from companies like Xingqi Eye Hospital (300573) up 9.55% and WuXi AppTec (603259) up 3.80% [4][10] Liquidity and Scale - The Hong Kong Healthcare ETF had a turnover rate of 4.77% with a transaction volume of 12.78 million yuan, averaging daily transactions of 152 million yuan over the past week [1] - The Medical Innovation ETF had a turnover rate of 0.23% with a transaction volume of 3.81 million yuan, averaging daily transactions of 52.36 million yuan over the past month [5] Investment Trends - The upcoming ASCO conference from May 30 to June 3, 2025, is expected to showcase over 70 oral presentations and 10 significant studies from domestic innovative drug companies [2] - According to Guotou Securities, global and U.S. VC & PE investment in innovative drugs is projected to grow by 1.93% and 5.29% respectively in 2024, indicating a recovery in the investment environment for innovative drugs [2] - Demand for research and development in areas such as peptides and ADCs is increasing, leading to improved order conditions for CXO listed companies like WuXi AppTec and others [2] Index Composition - The top ten weighted stocks in the CSI Hong Kong Stock Connect Healthcare Index account for 59.76%, with WuXi Biologics (02269) holding the highest weight at 11.32% [7][9] - The top ten weighted stocks in the CSI Pharmaceutical and Medical Device Innovation Index represent 66.49%, with WuXi AppTec (603259) at 11.68% [10][12]