Investment Rating - The report maintains a "Buy" rating for WuXi AppTec (02268) with a target price not specified [5][13]. Core Views - WuXi AppTec reported strong revenue growth of 62.2% year-on-year, reaching 2.701 billion yuan in the first half of 2025, driven by an increase in both customer and project numbers [1]. - The gross margin improved from 32.1% in H1 2024 to 36.1% in H1 2025, reflecting a 4.0 percentage point increase [1]. - The net profit for the same period was 746 million yuan, a year-on-year increase of 52.7% [1]. Customer & Order Growth - The total number of global customers expanded to 563, with 64 new customers added in the first half of 2025 [2]. - Among the top 20 global pharmaceutical companies by revenue in 2024, 13 have established partnerships with WuXi AppTec [2]. - The total number of integrated CMC (iCMC) projects reached 225, with 37 new iCMC projects signed in H1 2025, marking a historical high [2]. - The total unfulfilled order amount increased to 1.329 billion USD (approximately 9.542 billion yuan), representing a year-on-year growth of 57.9% [2]. Market Positioning - In the first seven months of 2025, WuXi AppTec contributed over 75% of the total value in ADC licensing deals exceeding 1 billion USD globally [3]. - The company's market share increased from 9.9% in 2022 to 22.2% in H1 2025 [3]. - WuXi AppTec enabled its clients to obtain the highest number of IND approvals globally in the first half of 2025, solidifying its industry leadership [3]. Capacity Expansion and Globalization - The completion of GMP release for the DP3 formulation workshop in July 2025 enhanced the integrated production capacity at the Wuxi base [4]. - The DP5 formulation workshop is under construction and is expected to achieve GMP release by 2027 [4]. - The Singapore base reached a mechanical completion milestone in June 2025 and is in the equipment and facility testing phase, with GMP release anticipated in the first half of 2026 [4]. Profit Forecast and Valuation - The report adjusts the revenue growth forecast for 2025, expecting revenues of 5.906 billion yuan (previously 4.668 billion yuan), with projected growth rates of 45.75% for 2025 [5]. - The forecast for net profit for 2025 is adjusted to 1.499 billion yuan (previously 918 million yuan), with continued growth expected in subsequent years [5].

Investment Rating - The investment rating for WuXi AppTec (02268.HK) is "Buy" (maintained) [1] Core Views - The company's performance exceeded expectations, with a significant increase in revenue and net profit. The revenue for H1 2025 reached 2.701 billion yuan, representing a year-on-year growth of 62.2%. The adjusted net profit (excluding interest income and expenses) was 733 million yuan, up 69.6% year-on-year [7] - The company has a strong order backlog, with total unfulfilled orders amounting to 1.329 billion yuan, a year-on-year increase of 57.9%. The North American region accounts for more than half of the unfulfilled orders, with new contract amounts growing by 48.4% [7] - The company is expanding its production capacity, with significant capital expenditures planned, including 1.56 billion yuan in 2025 and over 7 billion yuan by 2029. This expansion aims to support future growth and meet increasing demand [7] Financial Projections - Total revenue is projected to grow from 4.052 billion yuan in 2024 to 10.305 billion yuan in 2027, with a compound annual growth rate (CAGR) of 25.68% [1] - The net profit attributable to the parent company is expected to increase from 1.070 billion yuan in 2024 to 2.758 billion yuan in 2027, reflecting a strong growth trajectory [1] - Non-GAAP net profit is forecasted to rise from 1.174 billion yuan in 2024 to 2.908 billion yuan in 2027, indicating robust operational performance [1] Market Position - The company's market share is expected to increase to 22.2% by H1 2025, driven by a growing customer base and expanding project pipeline [7] - The company has established a strong presence in the North American market, which is anticipated to continue outpacing growth in other regions [7] Capital Expenditure - The company plans to invest significantly in capital expenditures, with 15.6 billion yuan expected in 2025 to enhance domestic and international production capacity [7] - New production facilities are set to come online, including a new park in Singapore expected to achieve GMP certification by 2026 [7]

Core Viewpoint - WuXi AppTec (02268) has demonstrated exceptional performance in the bioconjugate drug CRDMO sector, with a revenue growth of 62.2% in the first half of 2025, significantly surpassing annual growth guidance, and achieving a compound annual growth rate (CAGR) of 98% from the first half of 2022 to the first half of 2025, solidifying its leading position in the industry [1][2][4]. Financial Performance - The company's revenue for the first half of 2025 reached 2.701 billion yuan, a year-on-year increase of 62.2%, with a gross profit of 975 million yuan, up 82.2%, and a gross margin of 36.1%, reflecting a 5.5 percentage point increase from the full year of 2024 [2][4]. - Adjusted net profit, excluding interest income and expenses, was 733 million yuan, representing a 69.6% year-on-year growth [2]. Market Position and Growth - WuXi AppTec's market share in the bioconjugate drug CRDMO sector has surged from 9.9% in 2022 to approximately 22% in the first half of 2025, indicating strong market penetration and growth [7][11]. - The company signed a record 37 new iCMC projects in the first half of 2025, with a focus on innovative ADC molecules, including bispecific ADCs and multi-load ADCs [4][12]. Client Engagement and International Expansion - The number of global clients increased to 563, with 64 new clients added in the first half of 2025, including 13 of the top 20 global pharmaceutical companies [4][11]. - Approximately 82% of the company's revenue in the first half of 2025 came from international markets, highlighting its role as a preferred partner for overseas pharmaceutical companies [11]. Production Capacity and Infrastructure - The new DP3 production facility in Wuxi has been successfully GMP released, with an annual capacity of 7 million bottles, increasing the overall DP capacity to 15 million bottles [15][19]. - The company is also advancing its global strategy with a new production base in Singapore, expected to achieve GMP release by the first half of 2026 [19][22]. Technological Advancements - WuXi AppTec has made significant investments in technology, launching new payload linker technologies, WuXiTecan-1 and WuXiTecan-2, to enhance its service offerings [29]. - The company has advanced 1,000 molecules in early research for XDC, with a focus on high-difficulty ADC types, ensuring a robust pipeline for future growth [25][29]. Conclusion - WuXi AppTec's strong project reserves, efficient capacity construction, and strategic focus on innovative ADC and bioconjugate drug development position it as a leader in the CRDMO sector, driving sustained high growth [32].

Investment Rating - The report initiates coverage with a "Buy" rating for WuXi XDC [1][3][4] Core Insights - The global ADC CRDMO market is expanding, with the company benefiting from a growing order pipeline and a dual-factory strategy that enhances capacity and customer retention. The company is also entering the XDC market to create a second growth curve [3][4][5] Summary by Sections Company Overview - WuXi XDC is a leading end-to-end ADC CRDMO provider, benefiting from high industry demand and a growing order book. The projected EPS for 2024-2026 is 0.89, 1.24, and 1.66 CNY respectively, with a target price of 43.4 CNY based on a 35X PE for 2025 [4][16] Market Dynamics - The global ADC drug market is expected to grow to 64.7 billion USD by 2030, with a CAGR of 30% from 2022 to 2030. The outsourcing market for ADC and broader bioconjugates is projected to reach 11 billion USD by 2030, with a CAGR of 28% [4][40] Financial Performance - The company has shown strong revenue growth, with revenues increasing from 311 million CNY in 2021 to an estimated 2.124 billion CNY in 2023, representing a CAGR of 180.7%. The net profit is expected to grow significantly, reaching 1.067 billion CNY in 2024 [8][31] Production Capacity and Strategy - The company is implementing a dual-factory strategy to enhance global production capacity, with new facilities in Singapore expected to be operational by the end of 2025. The company has 18 clinical stage III projects and is advancing its ADC pipeline [5][19][37] Growth Opportunities - The XDC market is emerging, with significant potential in non-oncological indications. The company is strategically positioned to capitalize on this growth by leveraging its existing technology and expanding its project and client base [5][21][22]