Goldman Sachs·2025-06-25 13:03Investment Rating - The investment rating for WuXi XDC is Neutral with a 12-month price target of HK$39.00, indicating a downside potential of 7.6% from the current price of HK$42.20 [8]. Core Insights - WuXi XDC's management reiterated a high visibility for FY25 revenue growth guidance of over 35% year-on-year, driven by strong client demand in ADC development, particularly from emerging biotech companies in China [2][6]. - The company maintains technological leadership in ADC and bio-conjugates, with a diversified technology platform that includes various payloads and linkers, and a significant portion of new projects stemming from novel molecules [2][6][7]. - Capacity expansion is on track, with the Singapore site expected to start operations by the end of 2025 and GMP release anticipated in 2026, supported by a capital expenditure allocation of Rmb1.4 billion for FY25 [7]. Summary by Sections Revenue Growth and Client Demand - WuXi XDC expects over 35% revenue growth in FY25, supported by robust client demand in ADC development, with 60% of large-scale out-licensing deals in 2024 coming from its client base [2][6]. - The company has partnered with 13 of the top 20 global pharmaceutical companies, contributing 32% of its revenue [6]. Technological Leadership - WuXi XDC continues to expand its capabilities in ADC and bio-conjugates, with 35% of new projects in 2024 involving novel molecules, totaling 4,200 molecules, including 2,800 in ADCs [6][7]. - The company holds the number one position globally in terms of the number of global IND approvals in 2024 [7]. Capacity Expansion - The Singapore site is set to begin operations by the end of 2025, with a gradual capacity release strategy to manage depreciation and amortization impacts [7]. - The Wuxi DP3 line is expected to launch in the second half of 2025, while the DP5 line is under design and targeted for operation by the end of 2027 [7].