Core Viewpoint - The report from Citi indicates that WuXi Biologics (02269) is expected to accelerate growth again between 2025 and 2027, with revenue forecasts raised by 0% to 4% and net profit forecasts increased by 0% to 7% [1] Group 1: Financial Projections - Gross margin is projected to improve from 28.5% in 2024 to 30.8% in 2027 [1] - The target price for the company has been raised from HKD 34.8 to HKD 42.6, maintaining an outperform rating [1] Group 2: Industry Insights - The profitability and valuation of the Contract Research Organization (CRO) industry are sensitive to changes in the funding environment [1] - A potential interest rate cut in the US in the second half of the year is expected to enhance market preference for the CRO sector [1] - Global biotech companies are anticipated to increase R&D investments in a more favorable funding environment, while pharmaceutical companies will also expand R&D spending to alleviate patent barrier pressures, benefiting WuXi Biologics [1]

Investment Rating - The investment rating for WuXi Biologics (02269.HK) is "Buy" (maintained) [4][13] Core Views - The company achieved a robust revenue growth of 16.08% year-on-year in H1 2025, with total revenue reaching 9.953 billion yuan and a net profit of 2.339 billion yuan, reflecting a significant increase of 56.05% [4] - The company has raised its full-year revenue guidance for 2025 to a growth range of 14%-16%, supported by a backlog of unfulfilled orders amounting to approximately 20.34 billion USD [4] - The report highlights the strong growth momentum in preclinical services and anticipates future growth in CMO (Contract Manufacturing Organization) business [5] Financial Performance - In H1 2025, the company reported a gross margin of approximately 42.73%, an increase of about 3.6 percentage points year-on-year [4] - The adjusted net profit for H1 2025 was 2.840 billion yuan, representing a year-on-year growth of 11.60% [4] - The company’s earnings per share (EPS) for 2025-2027 are projected to be 1.1, 1.3, and 1.5 yuan respectively, with corresponding price-to-earnings (P/E) ratios of 26.7, 23.9, and 19.5 times [4] Business Growth and Strategy - The preclinical business achieved revenue of 4.147 billion yuan in H1 2025, marking a year-on-year growth of approximately 35.2% [5] - The company has a total of 864 projects in various stages, with 429 in preclinical, 259 in Phase I, 85 in Phase II, 67 in Phase III, and 24 in commercialization [5] - WuXi Biologics is expanding its global capacity with five research service centers, eight drug development centers, and eight commercial production centers [6] Regional Performance - Revenue growth in North America was robust at 20.1%, while Europe and China saw growth rates of 5.7% and a decline of 8.5% respectively [6] - The company’s strategic expansion in North America is expected to continue driving revenue growth [6]

盈利预测、估值与评级：公司整体经营状况良好，早期研发端与晚期临床及商业化生产端收入提升明 显。由于减值费用有所提升，其他收入略低于我们此前预期，我们给予更加保守的盈利预测，下调25- 27 年归母净利润预测为42.7/46.7/53.5亿元（前值为42.8/49.3/57.5 亿元，分别下调0.26%/5.32%/7.02%） 对应PE 为27/25/22 倍，维持"买入"评级。 风险提示：公司产能扩张计划或不及预期；生物药CDMO 市场的竞争程度加剧；地缘政治风险或影响 海外收入。 整体项目数再创新高，海外市场收入快速增加。25H1 公司新增86 个项目，总体项目数达864 个，其 中"赢得分子"项目9 个，包括2 个临床III 期项目，且绝大多数是复杂药物分子，体现公司专业能力强 大。25H1 公司临床前收入同比增 35.2%，业务回暖迅速；临床早期阶段收入同比降 29.7%，系数个大 型项目推进至后期开发或商业化阶段及订单时间安排所致。从地区来看，北美地区收入同比增长 20.1%，为公司收入主要推动力；欧洲地区与中国地区收入整体稳健，分别同比增长5.7%和下滑8.5%； 其他地区收入同比快速增长136% ...

Core Viewpoint - WuXi Biologics has raised its full-year revenue guidance following its interim report, indicating a gradual recovery in the global biopharmaceutical R&D and production landscape, with the CRDMO model expected to contribute revenue across various stages of R&D [1][2] Group 1: Financial Projections - The company projects EPS for 2025, 2026, and 2027 to be 1.11, 1.28, and 1.49 CNY respectively [1] - A PE valuation method is applied, with a target PE multiple of 40 for 2025, leading to a target price of HKD 48.18 per share, maintaining a "Buy" rating [1] Group 2: Project Pipeline and Orders - The number of projects in the pipeline is expanding, with a record high of 86 new projects added in the first half of 2025, over half of which are from the U.S. [1] - The company has 864 projects as of the first half of 2025, including 67 in Phase III clinical trials and 24 in commercial production, laying a solid foundation for future revenue growth [1] - The total unfulfilled orders amount to USD 20.3 billion, with approximately USD 11.4 billion in service orders, driven by the advancement of Phase III projects and early-stage clinical progress [1] Group 3: Revenue Growth and Market Resilience - Revenue from the M-end continues to grow rapidly, with North America showing resilience, as preclinical revenue increased by 35.2% year-on-year, driven by research services and preclinical development projects [2] - Clinical Phase III and commercial revenue rose by 24.9% year-on-year, reflecting the maturation of early-stage projects and the ongoing ramp-up of existing commercial projects [2] - North American revenue grew by 20.1% year-on-year, demonstrating sustained demand resilience amid a dynamic trade environment [2] Group 4: CRDMO Model and Profit Potential - The CRDMO model is rare, with proprietary technology molecules expected to contribute revenue at various R&D stages [2] - For every USD 1 billion in proprietary technology drug sales, WuXi Biologics is expected to earn USD 100 million annually, with 100% of projects produced by WuXi exempt from cell line royalties [2] - Projects not produced by WuXi will incur a cell line royalty typically at 0.5% of drug sales, with gross margins exceeding 80%, potentially generating significant profits, and over 600 projects expected to generate potential cell line royalties by the end of 2025 [2]

Investment Rating - The report upgrades the revenue growth guidance for the year from 12%-15% to 14%-16% based on the strong performance in the first half of 2025 [5] Core Insights - The company achieved a revenue of 9.953 billion yuan in H1 2025, representing a year-on-year growth of 16.1%. The gross profit reached 4.253 billion yuan, with a gross margin of 42.7%, up by 3.6 percentage points year-on-year [1] - The growth was primarily driven by overseas markets, with North American revenue increasing by 20.1% to 6.018 billion yuan, while revenue from European clients grew by 5.7% to 1.969 billion yuan. However, revenue from Chinese clients declined by 8.5% to 1.297 billion yuan [2][3] - The company signed a record 86 new projects in H1 2025, including 9 "winning molecule" projects, indicating a robust project and order reserve [4][5] Financial Performance Summary - For H1 2025, the company reported a net profit attributable to shareholders of 2.339 billion yuan, a significant increase of 56.0% year-on-year. The adjusted net profit was 2.840 billion yuan, up by 11.6% [1] - The company expects to complete 25 PPQ projects in 2025, contributing to a strong growth foundation [4][5] - The financial projections for 2025-2027 indicate revenues of 21.503 billion yuan, 24.572 billion yuan, and 27.580 billion yuan, respectively, with net profits of 4.405 billion yuan, 5.082 billion yuan, and 5.756 billion yuan [6][7]

Investment Rating - The report maintains an "Accumulate" rating for WuXi Biologics (2269) [5][6] Core Insights - WuXi Biologics has raised its full-year revenue guidance, reflecting a gradual recovery in the global biopharmaceutical R&D and manufacturing landscape. The CRDMO model is expected to leverage proprietary technology molecules to contribute revenue across various stages of R&D [2][3] Financial Summary - Total revenue projections for WuXi Biologics are as follows (in million RMB): - 2023: 17,051 (+12%) - 2024: 18,675 (+10%) - 2025E: 21,612 (+16%) - 2026E: 24,483 (+13%) - 2027E: 27,329 (+12%) - Gross profit and net profit forecasts are: - Gross profit for 2025E: 9,293 million RMB - Net profit for 2025E: 4,510 million RMB (+34%) [3][11] Project and Order Trends - The number of projects in the pipeline is expanding, with 86 new projects added in the first half of 2025, marking a historical high for 1H. Over half of these new projects are from the United States, with bispecific antibodies, multi-specific antibodies, and antibody-drug conjugates making up over 70% of new projects [9][10] - As of the first half of 2025, the company has 864 projects, including 67 in Phase III clinical trials and 24 in commercial production, laying a solid foundation for future revenue growth [9][10] Revenue Growth and Market Resilience - Revenue from the M segment is growing rapidly, with North America showing resilience in revenue growth. Preclinical revenue increased by 35.2% year-on-year in the first half of 2025, driven by research services and preclinical development projects [9][10] - The North American revenue grew by 20.1% year-on-year, demonstrating sustained demand and project ramp-up in a dynamic trade environment [9][10] CRDMO Model and Profit Potential - The CRDMO model is rare, and proprietary technology molecules have the potential to contribute revenue at various stages of R&D. For every $1 billion in proprietary technology drug sales, WuXi Biologics is expected to earn $100 million annually [9][10]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company achieved a revenue of 9.953 billion CNY, representing a year-over-year increase of 16.1%, and a net profit of 2.339 billion CNY, up 56.0% year-over-year, with a gross margin improvement of 3.6 percentage points to 42.7% [1][2] - The total number of projects reached a new high of 864, with 86 new projects added in the first half of 2025, indicating strong professional capabilities [2] - The company has a substantial order backlog of 20.3 billion USD, including 11.4 billion USD in service orders and 9 billion USD in potential milestone payments, supporting future revenue growth [3] Summary by Sections Financial Performance - Revenue for 2025 is projected at 21.46 billion CNY, with a growth rate of 14.9% [5] - The net profit forecast for 2025 is 4.273 billion CNY, reflecting a growth rate of 27.3% [5] - The company expects to complete 25 PPQs in 2025, significantly up from 16 in 2024, with a 98% success rate [3] Market and Regional Performance - North America remains the primary revenue driver with a year-over-year growth of 20.1%, while Europe and China showed stable performance with growth of 5.7% and a decline of 8.5%, respectively [2] - Other regions experienced rapid revenue growth of 136%, indicating increased market penetration in emerging markets [2] Valuation and Earnings Forecast - The revised net profit forecasts for 2025-2027 are 4.273 billion CNY, 4.668 billion CNY, and 5.348 billion CNY, respectively, with corresponding P/E ratios of 27, 25, and 22 [3][5]

Core Viewpoint - WuXi Biologics reported its mid-year performance for 2025, showing a slight outperformance against market expectations with a revenue of 9.95 billion yuan, a gross margin of 42.7%, and an adjusted net profit of 2.84 billion yuan, reflecting a year-on-year growth of 16.1%, 3.6 percentage points, and 11.6% respectively [1] Summary by Category Financial Performance - The company achieved a revenue of 9.95 billion yuan in the first half of 2025, representing a year-on-year increase of 16.1% [1] - Adjusted net profit reached 2.84 billion yuan, up 11.6% year-on-year [1] - Gross margin improved to 42.7%, an increase of 3.6 percentage points compared to the previous year [1] Business Segmentation - Revenue from preclinical projects was 4.15 billion yuan, up 35.2% year-on-year, driven by research services and preclinical development project revenue conversion [1] - Early clinical projects generated 1.33 billion yuan, down 29.7% year-on-year, mainly due to the transition of large projects to later development/commercialization stages and order execution timing [1] - Revenue from late-stage clinical and commercial projects was 4.29 billion yuan, reflecting a year-on-year increase of 24.9%, supported by the steady advancement of early projects and ongoing growth of existing commercial projects [1] Regional Performance - North America showed strong growth with a revenue increase of 20.1% year-on-year, accounting for 60.5% of total revenue [2] - European market revenue grew by 5.7%, representing 19.8% of total revenue [2] - Revenue from China declined by 8.5%, making up 13.0% of total revenue [2] - Other regions, including Singapore, Japan, and South Korea, saw a significant revenue increase of 136.1%, contributing 6.7% to total revenue [2] Project Pipeline - The total number of projects reached 864, a year-on-year increase of 16.4%, with 429 in preclinical, 259 in Phase I, 85 in Phase II, 67 in Phase III, and 24 in commercialization [3] - The company signed 86 new projects in the first half of 2025, with over 50% coming from the U.S. market [3] - The total uncompleted order amount reached 20.3 billion USD, with uncompleted service orders around 11.4 billion USD and potential milestone payment orders at a historical high of 9.0 billion USD [3] Investment Outlook - WuXi Biologics is positioned for steady growth driven by a robust order backlog and increasing utilization of backend capacity [3] - Projected net profits for 2025-2027 are expected to be 4.37 billion, 4.81 billion, and 5.27 billion yuan, with year-on-year growth rates of 30.2%, 10.1%, and 9.6% respectively [3]

招银国际发表研报指，药明生物上半年收入99.5亿元，按年升16.1%，占该行全年预测的46.6%；调整后 净利润23.9亿元，按年升6.2%，占全年预测的42.9%；毛利率按年升3.7个百分点至42.73%。该行预计， 集团今年、明年及2027年收入分别按年升15.3%、18.4%及17.9%，同时净利润分别按年升7.6%、28.8% 及18.9%；目标价由30.94港元上调至35.6港元，评级为"买入"。 ...

Summary of WuXi Biologics Cayman Inc Conference Call Company Overview - **Company**: WuXi Biologics Cayman Inc - **Industry**: Biopharmaceuticals - **Date of Call**: August 21, 2025 Key Highlights 1. **Financial Performance**: - 1H25 revenue increased by 16% YoY, and earnings rose by 55% YoY. Excluding WuXi XDC, revenue growth was approximately 9% YoY [1][2] - Full-year revenue growth guidance revised from 12-15% to 14-16%, with WuXi XDC's guidance raised from 35% to over 45% [1] 2. **Project Acquisition**: - Acquired 86 new integrated projects in 1H25, totaling 864 projects, with over half from US biotech companies. Approximately 50 projects are eligible for royalties, and 2-3 have blockbuster potential [2] - First-in-class drug candidates account for about 40% (338 programs) of the total projects [2] 3. **Market Performance**: - North America was the strongest market, with revenue up 20% YoY, driven by pre-IND and expanded late-stage/CMO contracts. Out-licensing of Chinese drug assets to American biotechs was significant [3] - Revenue in China decreased by 9% YoY due to changes in contract-signing parties for out-licensed assets [3] 4. **Backlogs**: - Service backlog reached US$11.4 billion (+13.5% YoY) and milestone backlog at US$9.0 billion (+26.6% YoY, non-probability adjusted). The service backlog was supported by all development stages, while milestone backlog was driven by research phase projects [4] 5. **Clinical Trials**: - 67 projects in Phase 3 trials and 24 at commercial stage contributed 43% of total revenue in 1H25, with a goal of 50% by 2030 [5] 6. **Bioreactor Capacity**: - Current bioreactor capacity is approximately 300,000L, with plans to reach ~491,000L in a few years. The supply chain is diversified across multiple countries to mitigate geopolitical risks [6] 7. **High-Concentration Biologics**: - WuXiHigh 2.0 has achieved titers of up to 230mg/ml, with about 20% of FDA-approved biologics and ~40% in the pipeline being high-concentration [7] 8. **Investor Sentiment**: - Investor concerns regarding geopolitics have lessened, as recent amendments to the Biosecure Act do not target Chinese companies in the biotech sector [11] Financial Metrics - **Market Capitalization**: HK$129,436 million - **Current Share Price**: HK$30.62 - **Price Target**: HK$35.00 (14% upside) [8] - **EPS Estimates**: - 2025: Rmb0.93 - 2026: Rmb1.15 - 2027: Rmb1.40 [8] Risks and Opportunities - **Upside Risks**: - Faster pharmaceutical market growth and increased outsourcing of R&D globally [14] - **Downside Risks**: - Potential slowdown in biologics programs and geopolitical risks [14] Conclusion WuXi Biologics is positioned for growth with strong revenue performance, a robust project pipeline, and strategic market positioning, particularly in North America. However, challenges in the Chinese market and geopolitical factors remain critical considerations for investors.