Summary of WuXi AppTec Co. (2359.HK) Earnings Call Company Overview - **Company**: WuXi AppTec Co. (2359.HK) - **Industry**: Healthcare Services, specifically focusing on clinical research and contract development manufacturing Key Financial Highlights - **3Q25 Revenue**: Rmb12.1 billion, representing a **15.3% year-over-year increase** (vs. guidance of Rmb11.5 billion) and **19.7% growth** for continuing operations [1] - **TIDES Business Growth**: Grew **91% year-over-year**, contributing **23%** of total revenue [1] - **Adjusted Non-IFRS Net Profit**: Rmb4.2 billion, up **42% year-over-year**, exceeding guidance of Rmb3.4 billion [1] - **Gross Margin**: Improved to **49.8%**, compared to guidance of **45.0%**, driven by operational efficiency and higher-margin projects [1] - **FY25 Revenue Guidance**: Raised to Rmb43.5-44.0 billion from Rmb42.5-43.5 billion, with expected revenue growth for continuing operations adjusted to **17-18% year-over-year** [1] Order Dynamics and Backlog - **New Order Growth**: Continued strong momentum with a **37% year-over-year increase** in new orders for continuing operations [2] - **Backlog**: Increased to Rmb59.9 billion, up **41.2% year-over-year** [2] - **TIDES Backlog Growth**: Grew by **17.1% year-over-year** in the first nine months, moderating from **48.8%** in the first half of the year [2] - **Future Insights Expected**: Management to provide insights on order growth drivers beyond peptides/GLP-1, trends in US/EU demand, and developments in small molecule CDMO pipelines [2] Capital Expenditure and Free Cash Flow - **3Q25 Capex**: Rmb1.47 billion, with a total of Rmb3.57 billion for the first nine months [3] - **Full Year Capex Budget**: Lowered to Rmb5.5-6 billion from Rmb7-8 billion due to longer settlement cycles [3] - **Free Cash Flow Guidance**: Raised to Rmb8-8.5 billion from Rmb5-6 billion [3] Strategic Moves - **Disposal of Clinical CRO Business**: Agreement signed to divest 100% of the China-based clinical research services business for Rmb2.8 billion, which accounted for **3.5%** of total revenue and **0.7%** of net profit in 9M25 [4] - **Focus on Core Operations**: This divestiture follows previous disposals, indicating a strategic shift towards core operations [4] Market Valuation and Risks - **12-Month Target Price**: HK$109.6 based on a forward P/E of 18x [9] - **A-Share Target Price**: Rmb105.6, derived from the H-share target price [10] - **Downside Risks**: Include potential legislative changes, pricing pressures, regulatory risks, and slower-than-expected business ramp-up [9] Additional Insights - **Investor Focus Areas**: Anticipated discussions on early-stage project recovery, geopolitical risks, and further asset disposal plans during the upcoming earnings call [8] This summary encapsulates the key financial metrics, strategic decisions, and market outlook for WuXi AppTec Co., providing a comprehensive overview for potential investors and stakeholders.