Sou Hu Cai Jing·2025-11-11 11:43Core Viewpoint - WuXi AppTec, a leading CXO in the pharmaceutical outsourcing sector, has announced a significant shareholder reduction after reporting an 80% year-on-year increase in net profit for Q3 2025, raising questions about the motivations behind the sell-off despite strong financial performance [2][4]. Financial Performance - For the first three quarters of 2025, WuXi AppTec achieved a net profit of 12 billion yuan, with 3.2 billion yuan (approximately 25% of net profit) attributed to non-operating gains from the disposal of non-current assets, primarily from selling shares in WuXi Biologics [2][3]. - The company's cash reserves reached 29.4 billion yuan by the end of September 2025, an increase of over 11 billion yuan compared to the end of 2024, supported by a 36% year-on-year increase in operating cash flow, totaling 11.4 billion yuan [4]. Shareholder Actions - Since November 2024, WuXi AppTec has executed four rounds of share reductions in WuXi Biologics, totaling a 13.87% stake and generating approximately 6.95 billion Hong Kong dollars (about 6.1 billion yuan) in cash [10][11]. - The latest proposed reduction of up to 2% of shares could yield around 5.66 billion yuan, bringing the total cash generated from reductions to approximately 17.67 billion yuan [11]. Market Reaction - Despite the frequent share reductions by WuXi AppTec, the stock price of WuXi Biologics has shown resilience, increasing by 225% from November 2024 to October 2025, indicating that long-term investors are focused on the company's fundamentals rather than the selling actions of major shareholders [5][8]. Strategic Implications - The repeated sell-offs by WuXi AppTec's major shareholders, including its controlling shareholder Li Ge, have raised concerns about the long-term outlook for the assets being sold, especially given the company's strong cash position [4][9]. - The capital structure of WuXi AppTec, which includes a dual listing and various offshore entities controlled by Li Ge, facilitates these capital operations, suggesting a strategic focus on liquidity and capital recycling rather than long-term asset retention [15][19].