野村将药明康德A股目标价从93.49元上调至118.83元。 ...

格隆汇10月28日｜野村发表研究报告指，药明康德首三季收入按年增长18.6%，纯利按年增长84.8%。 药明康德管理层上调公司2025财年指引，预计持续经营业务收入按年增长17至18%，介乎435亿至440亿 元，并预计自由现金流将升至80亿至85亿元(原本50亿至60亿元)。该行上调药明康德今明两年的收入预 测2.2%和0.4%，以反映第三季业绩胜于预期，并将期内盈测上调33.5%和33.3%。该行重申公司"买 入"评级，目标价由102.77港元上调至130.63港元。 ...

Core Viewpoint - Citigroup has raised the target price for WuXi AppTec from HKD 130 to HKD 142, making it their preferred choice in the CDMO sector [1] Group 1: Financial Guidance and Performance - WuXi AppTec's management has increased the fiscal year 2025 guidance, projecting revenue from continuing operations to reach between CNY 43.5 billion and CNY 44 billion, representing a year-on-year growth of 17% to 18% [1] - The previous guidance was between CNY 42.5 billion and CNY 43.5 billion, with a year-on-year growth of 13% to 17% [1] - Citigroup believes that management is confident in further improving the adjusted net profit margin for 2025, maintaining the guidance for TIDES business revenue to grow over 80% year-on-year [1] Group 2: Revenue and Earnings Forecast Adjustments - Citigroup has slightly raised the revenue forecast for fiscal year 2025, expecting performance to exceed current management expectations [1] - Revenue forecasts for fiscal years 2026 and 2027 have been increased by 1% and 5% respectively, considering higher growth in small molecule drug development and manufacturing, which offsets the impact of the sale of clinical CRO/SMO businesses [1] - Based on the expansion of gross margin driven by chemical business, a decrease in administrative cost ratio, and an increase in investment income, earnings per share forecasts for fiscal years 2025 to 2027 have been raised by 24%, 11%, and 15% respectively [1]

Summary of WuXi AppTec Co. (2359.HK) 3Q25 Earnings Call Company Overview - **Company**: WuXi AppTec Co. (2359.HK) - **Industry**: Biotechnology and Pharmaceutical Services Key Points Financial Performance - **Revenue Guidance**: The company raised its full-year revenue guidance and reiterated its target for TIDES revenue growth of 80% for the year [1][10] - **Gross Margin**: Achieved a record non-IFRS gross margin of 51.5% in 3Q25, up from 42.0% in 2023 and 41.6% in 2024, driven by: - Increased late-stage clinical and commercial projects in the chemistry segment [2] - Process optimization and operational improvements [2] - Ongoing divestment of lower-margin businesses [2] Order Growth and Backlog - **New Orders**: New order growth for 3Q25 was robust at 18%, with significant contributions from small molecule D&M projects [3] - **Pipeline**: The pipeline includes high-potential assets in various therapeutic areas such as GLP-1 and PCSK9 [3] - **Backlog Growth**: TIDES backlog growth was reported at 17%, reflecting a high base and large delivery volumes [3] Market Dynamics - **Sector Recovery**: Early-stage laboratory services are showing signs of recovery, with double-digit new order growth [3] - **Pricing Stability**: Pricing for safety assessments stabilized in 2025, although a full recovery is anticipated to take time [4] Geopolitical Impact - **Limited Impact**: The company noted limited impact from geopolitical uncertainties, with ongoing discussions regarding tariff developments and the Biosecure Act [8] Future Outlook - **Operational Focus**: Emphasis on operational excellence and technological advancements to secure client orders [1] - **Guidance for Next Year**: Management plans to provide guidance for next year's revenue and TIDES growth during the full-year results call [1] Risks and Valuation - **Valuation Adjustments**: FY25-27 non-IFRS EPS estimates revised upwards by 4.7%, 3.7%, and 5.9% due to margin improvements [10] - **Target Price**: The 12-month target price is set at HK$122.5, reflecting a 6.5% upside from the current price [12] - **Key Risks**: Include potential legislative impacts from the US Biosecure Act, pricing pressures, regulatory risks, and uncertainties in the business discovery model [10] Additional Insights - **Technological Advancements**: Increasing importance of technological advancements in securing client orders [1] - **Market Position**: The company is positioned to benefit from a favorable revenue mix and operational improvements, contributing to its competitive edge in the biotechnology sector [2][10]

Core Viewpoint - The company WuXi AppTec, led by Li Ge, is divesting non-core assets to focus on its main business, with a recent announcement to sell two subsidiaries for 2.8 billion yuan, reflecting a strategic shift towards enhancing its core operations and financial strength [2][9]. Group 1: Asset Sale Details - WuXi AppTec plans to sell its subsidiaries, Kangde Hongyi and Jinshi Pharmaceutical, for a total of 2.8 billion yuan, which contributed 1.16 billion yuan in revenue and 90 million yuan in profit from January to September, accounting for 3.5% and 0.7% of WuXi AppTec's total [2][10]. - The subsidiaries are involved in clinical research services, specifically Clinical Research Organization (CRO) and Site Management Organization (SMO) businesses, which have shown signs of fatigue [5][6]. Group 2: Financial Performance and Strategy - The main business of WuXi AppTec, particularly in the CRDMO (Contract Research, Development, and Manufacturing Organization) sector, has shown strong growth, with revenues nearing 26 billion yuan and a year-on-year increase of nearly 30% [11]. - The company has successfully raised approximately 9 billion yuan in cash over the past 12 months through various asset sales, including the recent divestiture [4][23]. Group 3: Future Outlook and Growth - The company aims to use the proceeds from the asset sale to support its global expansion and production capacity, with management stating that the transaction aligns with its long-term strategic goals [9][17]. - As of September 30, WuXi AppTec's order backlog reached 60 billion yuan, a 41% increase year-on-year, indicating strong demand for its services [25]. - The company has raised its revenue guidance for 2025, projecting total revenue between 43.5 billion and 44 billion yuan, with expected free cash flow of 8 billion to 8.5 billion yuan [28].

Macroeconomic Information and Commentary - Recent US-China trade negotiations in Kuala Lumpur focused on key economic issues, including maritime logistics and shipbuilding industry measures, resulting in a basic consensus on addressing mutual concerns [2] - The State Council's financial work report emphasizes high-quality financial services for the real economy, with a focus on technology innovation, consumption, small and micro enterprises, and stabilizing foreign trade [2] Company and Industry Analysis Electronics Industry - The electronics sector saw an 8.49% increase last week, with semiconductor and consumer electronics indices rising by 8.01% and 9.38% respectively [5] - Notable companies in the electronics sector include Yunhan Chip City and Yuanjie Technology, while companies like Abison and Huatian Technology lagged behind [5] - The electronics sector's PE ratio (TTM) is 66.18X, up 5.10X week-on-week, indicating a high valuation relative to historical levels [5] - Storage prices have surged, with DRAM and NAND Flash prices increasing by 15%-20%, driven by AI demand, suggesting a sustained positive outlook for the storage market [6] - Investment opportunities are identified in AI infrastructure, edge SOC, foldable smartphone supply chains, and the storage industry, maintaining an "overweight" rating for the electronics sector [6] Medical Services Industry - WuXi AppTec reported a revenue increase of 18.61% year-on-year for the first three quarters of 2025, with a significant rise in net profit [8] - The company's gross margin improved to 46.62%, driven by operational efficiency and the sale of shares in a joint venture [9] - The chemical business segment showed robust growth, particularly in TIDES (oligonucleotide and peptide drugs), which saw a revenue increase of 121.1% [10] - The company expects a return to double-digit growth in its ongoing business, raising revenue forecasts for 2025-2027 [11] Banking Industry - Policy banks have deployed over 330 billion yuan in new financial tools to stimulate credit demand, with a focus on infrastructure and emerging sectors like AI [12] - The introduction of these financial tools is expected to support medium to long-term corporate loans and improve the loan structure [12] - The banking sector is anticipated to benefit from the increased investment demand, particularly in regional banks, with a recommendation to focus on state-owned banks and select regional banks for their stable dividend yields [13]

Core Insights - The company reported strong financial performance for Q1-3 2025, with revenue of 32.86 billion yuan, a year-on-year increase of 18.6%, and a net profit attributable to shareholders of 12.08 billion yuan, up 84.8% [1] - The company plans to sell assets for a total of 2.8 billion yuan, transferring 100% equity of two subsidiaries [1] Financial Performance - For Q1-3 2025, the company achieved revenue of 32.45 billion yuan from continuing operations, a year-on-year growth of 22.51%, with Q3 alone generating 12.05 billion yuan, up 19.7% [2] - Adjusted net profit attributable to shareholders for Q1-3 2025 was 10.54 billion yuan, reflecting a 43.4% increase, with Q3 adjusted net profit at 4.22 billion yuan, up 42.0% [2] - As of September 2025, the company had a backlog of orders amounting to 59.88 billion yuan, a 41.2% year-on-year increase, indicating a solid foundation for future growth [2] Business Segments - The TIDES business segment reported revenue of 7.84 billion yuan for Q1-3 2025, a significant year-on-year increase of 121.1%, with Q3 revenue at 2.81 billion yuan, up 91.9% [3] - The chemical D&M business generated revenue of 14.24 billion yuan in Q1-3 2025, a 14.1% increase, with Q3 revenue at 5.56 billion yuan, up 9.2% [3] - The laboratory testing and analysis business achieved revenue of 2.96 billion yuan, growing 2.7% year-on-year, while the biology business reached 1.95 billion yuan, up 6.6% [4] Future Outlook - The company has revised its revenue guidance for 2025, increasing the expected growth rate for continuing operations from 13%-17% to 17%-18%, and overall revenue expectations from 42.5-43.5 billion yuan to 43.5-44 billion yuan [2] - The company anticipates continued growth in the laboratory segment due to improving market conditions [4] Investment Considerations - The company adjusted its revenue forecasts for 2025-2027, increasing expected revenues to 44.98 billion yuan, 52.42 billion yuan, and 61.15 billion yuan respectively, with corresponding EPS adjustments [5]

Investment Rating - The report assigns a "Buy" rating for WuXi AppTec (药明康德) based on its strong performance and growth outlook [12]. Core Insights - WuXi AppTec has demonstrated robust revenue growth, with a 18.6% year-on-year increase in revenue for the first three quarters of 2025, reaching 32.86 billion yuan, and a 43.4% increase in adjusted net profit, amounting to 10.54 billion yuan [1][4]. - The company has raised its full-year guidance, increasing the target growth rate for continuing operations from 13-17% to 17-18%, and adjusting the overall revenue target from 42.5-43.5 billion yuan to 43.5-44 billion yuan [4]. Summary by Sections Financial Performance - For Q1-Q3 2025, WuXi AppTec's chemical business generated 25.98 billion yuan in revenue, a 29.3% increase year-on-year, with an adjusted gross margin of 51.3%, up 5.8 percentage points [2]. - The TIDES business within the chemical segment was a significant growth driver, achieving 7.84 billion yuan in revenue, a remarkable 121.1% increase year-on-year [2]. - The testing business reported revenue of 4.17 billion yuan, remaining stable year-on-year, while the biological business generated 1.95 billion yuan, reflecting a 6.6% increase [3]. Order Backlog and Regional Performance - As of September 2025, the company had a backlog of 59.88 billion yuan in continuing operations, a 41.2% increase year-on-year, indicating strong future revenue potential [4]. - Revenue from U.S. clients reached 22.15 billion yuan, a 31.9% increase, contributing approximately 68% of total revenue [4]. Earnings Forecast - The forecast for WuXi AppTec's revenue for 2025-2027 is 45.124 billion yuan, 51.433 billion yuan, and 57.808 billion yuan, respectively, with net profits projected at 14.907 billion yuan, 14.093 billion yuan, and 16.275 billion yuan [6]. - The expected diluted EPS for the same period is 5.00 yuan, 4.72 yuan, and 5.45 yuan, with corresponding P/E ratios of 21.34, 22.58, and 19.55 [6].

Investment Rating - The report maintains a "Buy" rating for WuXi AppTec (603259) [3] Core Insights - The company's performance exceeded market expectations, leading to an upward revision of the 2025 full-year revenue guidance. The revenue for the first three quarters of 2025 reached 32.45 billion yuan, a year-on-year increase of 22.51%. The revenue for Q3 alone was 12.05 billion yuan, growing by 19.7% year-on-year. The adjusted net profit attributable to the parent company for the first three quarters was 10.54 billion yuan, up 43.4% year-on-year, with Q3's adjusted net profit at 4.22 billion yuan, increasing by 42.0% year-on-year. The company also reported a backlog of orders amounting to 59.88 billion yuan, a 41.2% increase year-on-year, indicating a solid foundation for future growth. The revenue growth forecast for 2025 was revised from 13%-17% to 17%-18%, with total revenue expectations raised from 42.5-43.5 billion yuan to 43.5-44 billion yuan [2]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved operating revenue of 32.86 billion yuan, a year-on-year increase of 18.6%, and a net profit attributable to the parent company of 12.08 billion yuan, up 84.8% year-on-year. The adjusted net profit was 10.54 billion yuan, reflecting a 43.4% year-on-year growth [5][10]. Business Segments - The TIDES business segment generated revenue of 7.84 billion yuan in the first three quarters, marking a significant year-on-year growth of 121.1%. In Q3, the revenue was 2.81 billion yuan, up 91.9% year-on-year. The backlog for TIDES orders increased by 17.1% year-on-year, with a rise in the number of clients and service molecules [6]. - The chemical drug D&M business also showed recovery, with revenue of 14.24 billion yuan in the first three quarters, a 14.1% year-on-year increase. Q3 revenue was 5.56 billion yuan, growing by 9.2% year-on-year [7]. Future Outlook - The laboratory services segment showed marginal improvement, with testing and analysis services and biology services achieving revenues of 2.96 billion yuan and 1.95 billion yuan, respectively, in the first three quarters, reflecting year-on-year growth of 2.7% and 6.6% [7]. - The company adjusted its revenue forecasts for 2025-2027, with expected revenues of 44.979 billion yuan, 52.416 billion yuan, and 61.147 billion yuan, respectively. The EPS estimates were adjusted to 5.26 yuan, 5.69 yuan, and 6.73 yuan for the same period [8][10].

Core Viewpoint - WuXi AppTec plans to sell two clinical service subsidiaries, Kangde Hongyi and Jinshi Pharmaceutical, to Hillhouse Capital for a base price of 2.8 billion yuan, as part of its strategy to focus on its core CRDMO business [1][4][8] Financial Performance - For the first three quarters of 2025, the combined revenue of Kangde Hongyi and Jinshi Pharmaceutical was approximately 1.16 billion yuan, accounting for 3.5% of WuXi AppTec's total revenue [5] - The net profit of these subsidiaries was about 90 million yuan, representing 0.7% of the company's net profit for the same period [5] - WuXi AppTec reported a total revenue of 32.857 billion yuan for the first three quarters of 2025, a year-on-year increase of 18.61%, with a net profit of 12.076 billion yuan, up 84.84% [6][7] Business Strategy - The sale of the subsidiaries is part of WuXi AppTec's strategy to concentrate on drug discovery, laboratory testing, and production, while accelerating global capacity expansion [5][8] - The company aims to optimize its financial structure and respond to industry challenges, including increased competition and pricing pressures from peers [9] Market Dynamics - WuXi AppTec's revenue from the U.S. market was 22.15 billion yuan, a year-on-year increase of 31.9%, while revenue from the Chinese market grew only 0.5% [6] - The company has been adjusting its strategy in response to external risks, including the U.S. Biosecurity Act, which has raised concerns about its operations [8][9]