野村证券将药明康德H股目标价从102.77港元上调至130.63港元。 来源：滚动播报 ...

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。 ...

Company Analysis - WuXi AppTec reported strong Q3 2025 financial results, with revenue increasing by 15.3% year-on-year, and adjusted Non-IFRS net profit rising significantly by 42.0% [2] - The company raised its full-year revenue guidance to a range of RMB 43.5 billion to RMB 44 billion, up from the previous guidance of RMB 42.5 billion to RMB 43.5 billion, indicating robust business execution despite macro uncertainties [2] - As of Q3 2025, the company's backlog for its small molecule D&M business reached RMB 59.88 billion, a year-on-year increase of 41.2%, highlighting its role as a key growth driver [6] Market Performance - The Hang Seng Index closed at 26,434, up 1.05% for the day and 31.77% year-to-date, reflecting positive market sentiment [3] - The Chinese stock market saw gains, with sectors such as materials, information technology, and consumer discretionary leading the way, while telecommunications, finance, and energy lagged [5] - The U.S. stock market also experienced upward momentum, with the S&P 500 and Nasdaq rising by 1.23% and 1.86% respectively, driven by improved risk appetite following U.S.-China trade negotiations [5] Industry Insights - The chemical segment of WuXi AppTec showed signs of recovery, with drug discovery services experiencing a slight revenue decline of 2.0% year-on-year, but the decline is narrowing [7] - The company is witnessing early signs of demand recovery in the industry, attributed to improvements in the macro environment, including a rebound in the domestic capital market and favorable global business development transactions [7] - The management anticipates that the revenue growth from the small molecule D&M segment will significantly impact overall revenue growth, as it constitutes 46% of total revenue in 2024 [6]

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]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical and biotechnology sector [6][30]. Core Insights - The pharmaceutical sector underperformed the overall market, with a slight increase of 0.58% in the biopharmaceutical sector compared to a 3.26% rise in the total A-share market [2][33]. - Grail's multi-cancer early detection product, Galleri, achieved significant clinical milestones, with a positive predictive value (PPV) of 61.6%, a substantial increase from 38% in the previous Pathfinder 1 study [3][12]. - The report emphasizes the potential of Galleri to enhance existing screening protocols, with a sevenfold increase in total cancer detection when combined with standard screenings [19][30]. Summary by Sections Market Performance - The overall A-share market rose by 3.26%, with the Shanghai Composite Index increasing by 3.24% and the ChiNext Index rising by 8.05% [2][33]. - The biopharmaceutical sector's price-to-earnings (P/E) ratio stands at 38.35x, which is at the 80.28th percentile of its historical valuation over the past five years [2][38]. Key Company Earnings Forecasts and Investment Ratings - Major companies such as Mindray Medical, WuXi AppTec, and Aier Eye Hospital are rated as "Outperform" with projected earnings growth for 2024 ranging from 35.6 million to 116.7 million yuan [5][44]. - The report highlights the strong financial performance and growth potential of these companies, with Mindray Medical expected to maintain a P/E ratio of 23.0x in 2024 [5][44]. Clinical Developments - Grail's Pathfinder 2 study included approximately 35,000 participants, demonstrating the effectiveness of Galleri in early cancer detection [12][24]. - The study revealed that 53.5% of cancers detected by Galleri were in stages I or II, indicating the product's capability to identify cancers at an early stage [17][22]. Investment Strategy - The report suggests focusing on companies with high-quality innovation capabilities, particularly in the context of the increasing competitiveness of domestic innovative drugs in global markets [42][44]. - It recommends monitoring the clinical progress and commercial value of multi-cancer early detection technologies, particularly Galleri, as it approaches FDA approval [30][44].

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]