Core Viewpoint - WuXi AppTec (603259) is focusing on its CRDMO (Contract Research, Development, and Manufacturing Organization) business model by divesting its 100% stakes in Kangde Hongyi and Jinshi Pharmaceutical for a base transfer price of RMB 2.8 billion, aiming to enhance its global capabilities and production capacity [1] Group 1: Transaction Details - The divestiture involves a transfer of 100% equity stakes in Kangde Hongyi and Jinshi Pharmaceutical to a newly established company by Hillhouse Capital through its private equity fund [1] - The transaction is aligned with WuXi AppTec's strategy to concentrate on drug discovery, laboratory testing, and process development and manufacturing services [1] Group 2: Financial Impact - The target companies generated approximately RMB 1.16 billion in total revenue from January to September 2025, accounting for about 3.5% of WuXi AppTec's total revenue for the same period [1] - The net profit of the target companies for the same period is approximately RMB 90 million, representing about 0.7% of WuXi AppTec's net profit [1]

Core Insights - WuXi AppTec reported a revenue of 32.857 billion yuan for the first three quarters of 2025, representing an 18.61% year-on-year increase, and a net profit of 12.076 billion yuan, up 84.84% year-on-year [1] - The company attributes its growth to a focus on the CRDMO business model, optimization of production processes, and increased efficiency from large-scale projects [1] - The company expects its revenue growth rate for ongoing operations to be adjusted from 13%-17% to 17%-18% for 2025 [1] Revenue Breakdown - As of September 30, 2025, the company had a backlog of orders worth 59.88 billion yuan, a 41.2% increase year-on-year [2] - For the first three quarters of 2025, revenue from ongoing operations was 32.45 billion yuan, with revenue from U.S. clients at 22.15 billion yuan (31.9% increase), European clients at 3.84 billion yuan (13.5% increase), Chinese clients at 5.04 billion yuan (0.5% increase), and other regions at 1.42 billion yuan (9.2% increase) [2] Future Projections - The company has raised its full-year revenue forecast from 42.5 billion-43.5 billion yuan to 43.5 billion-44 billion yuan [2] - WuXi AppTec plans to focus on its core CRDMO business and improve operational efficiency [2] Strategic Moves - The company announced the transfer of 100% equity in its subsidiaries to Shanghai Shihe Rong Enterprise Management Consulting Co., Ltd. and Shanghai Shihe Mu Enterprise Management Consulting Co., Ltd. for a transaction price of 2.8 billion yuan [2] - This move aims to enhance focus on the CRDMO business model and accelerate global capabilities and capacity deployment [2] - The anticipated gains from this transaction are expected to exceed 10% of the company's most recent audited net profit, positively impacting the net profit for 2025 [2]