Financial Data and Key Metrics Changes - The company's total revenue for the first three quarters of 2025 reached RMB 32.86 billion, with revenue from continuing operations growing 22.5% year-over-year to RMB 32.45 billion [6][7] - Adjusted non-IFRS net profit increased by 43.4% to RMB 10.54 billion, with a non-IFRS net profit margin improving to 32.1% [7][20] - The adjusted non-IFRS gross profit reached RMB 15.46 billion, with the gross profit margin improving from 41.6% in 2024 to 47% [19][20] Business Line Data and Key Metrics Changes - WuXi Chemistry's revenue grew 29.3% to RMB 25.98 billion, with an adjusted non-IFRS gross profit margin improving 5.8 percentage points to 51.3% [8][9] - Small molecule D&M business revenue grew 14.1% to RMB 14.24 billion, with a total react volume of small molecule APIs exceeding 4,000 cu m [9][10] - WuXi TIDES revenue surged 121.1% year-over-year to RMB 7.84 billion, with a backlog growth of 17.1% [10][11] Market Data and Key Metrics Changes - Revenue from the U.S. grew 31.9%, while Europe saw a 13.5% increase, and revenue from China remained flat [8] - The company reported a record backlog for continuing operations of RMB 59.88 billion, growing 41.2% year-over-year [7][8] Company Strategy and Development Direction - The company is focusing on enhancing its core CRDMO capabilities and expanding global capacity to meet customer demand [7][25] - A strategic decision was made to sell 100% of its China-based clinical research services business to Hillhouse Investment Management, which will be classified as a discontinued operation [23][24] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in continuing operations revenue for 2025, raising the growth rate expectation to 17%-18% [25][26] - The company anticipates total revenue for 2025 to be between RMB 43.5 billion and RMB 44.0 billion, up from previous guidance [26] Other Important Information - The company has implemented a total of RMB 6.88 billion in cash dividends, share repurchases, and cancellations, representing over 70% of the net profit in 2024 [27][28] - The company is actively advancing global capacity expansion, with CapEx payments reaching RMB 3.57 billion in the first three quarters [22] Q&A Session Summary Question: What is driving the backlog growth, particularly in small molecules? - Management indicated that the backlog growth is primarily driven by small molecule D&M, especially from late-stage clinical and commercial projects, with a historical high backlog approaching RMB 60 billion [30][32] Question: What is the outlook for margins, especially for WuXi Chemistry? - The margin increase is attributed to continuous optimization of manufacturing processes and a higher proportion of late-phase and commercial projects, with expectations to maintain strong margins moving forward [35][36] Question: How does the new BIOSECURE bill affect customer sentiment? - Management noted that customers have not shown a significant change in demand patterns despite the geopolitical uncertainties, maintaining strong service demand [40][42] Question: What is the expected timing for the disposal of the clinical research services business? - The revenue guidance for continuing operations has excluded the clinical research services business, which will be reclassified as discontinued operations in the annual report [47] Question: What are the key drivers for the small molecule CDMO business? - The small molecule pipeline includes several high-potential projects, including GLP-1 and PCSK9, with a strong focus on capturing late-phase and commercial opportunities [70]

Financial Data and Key Metrics Changes - The company's total revenue for the first three quarters of 2025 reached RMB 32.86 billion, with revenue from continuing operations growing 22.5% year-over-year to RMB 32.45 billion [6][7] - Adjusted non-IFRS net profit increased by 43.4% to RMB 10.54 billion, with a non-IFRS net profit margin improving to 32.1% [7][20] - The adjusted non-IFRS gross profit margin improved from 41.6% in 2024 to 47% in the first three quarters of 2025 [19][20] Business Line Data and Key Metrics Changes - WuXi Chemistry's revenue grew 29.3% to RMB 25.98 billion, with an adjusted non-IFRS gross profit margin improving 5.8 percentage points year-over-year to 51.3% [8][9] - WuXi TIDES revenue surged 121.1% year-over-year to RMB 7.84 billion, with a backlog growth of 17.1% [10] - WuXi Testing revenue remained flat at RMB 4.17 billion, while lab testing service revenue grew 7.2% year-over-year [13][14] - WuXi Biology revenue increased by 6.6% to RMB 1.95 billion, with a slight decline in gross profit margin due to market pricing impacts [17] Market Data and Key Metrics Changes - Revenue from the U.S. grew 31.9%, while Europe saw a 13.5% increase, and revenue from China remained relatively flat [8] - The company's backlog for continuing operations reached a record high of RMB 59.88 billion, growing 41.2% year-over-year [7][32] Company Strategy and Development Direction - The company is focusing on enhancing its core CRDMO capabilities and expanding global capacity to meet customer demand [7][25] - A strategic decision was made to sell 100% of its China-based clinical research services business to Hillhouse Investment Management, which will be classified as a discontinued operation [23][24] - The company expects to achieve double-digit growth in continuing operations revenue for 2025, raising the growth rate guidance to 17% to 18% [25][26] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the robust demand for enabling services and the resilience of the CRDMO business model [25] - The company anticipates improved operating efficiency and financial management capabilities to sustain growth momentum [19][22] Other Important Information - The company has implemented a total of RMB 6.88 billion in cash dividends, share repurchases, and cancellations, representing over 70% of the net profit in 2024 [27][28] - The company is actively advancing global capacity expansion, with CapEx payments reaching RMB 3.57 billion in the first three quarters [22] Q&A Session Summary Question: What is driving the backlog growth, particularly in the small molecule segment? - Management indicated that the backlog growth is primarily driven by late-stage clinical and commercial projects, with a significant contribution from small molecule DNM [30][32] Question: What is the outlook for margins, especially for WuXi Chemistry? - The high margins are attributed to continuous optimization of manufacturing processes and an increase in late-phase and commercial projects, which improve utilization efficiency [35][36] Question: How do U.S. customers view the new BioSecure bill and its impact on sourcing? - Management noted that U.S. customers continue to demand services from global sites, and there has not been a significant change in sourcing patterns due to the new bill [40][42] Question: How will the disposal of the clinical research services business affect overall margins? - The margin mix for WuXi Testing is expected to improve following the divestiture of the clinical CRO business [86] Question: What are the plans for using the proceeds from recent disposals? - The proceeds will be reinvested into global growth and capacity building, supporting the company's CRDMO strategy [86]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative performance increase of over 15% against the benchmark index in the next 6 to 12 months [3][13]. Core Insights - The company has shown a gradual recovery in its business operations, with a significant increase in backlog orders, which are expected to drive revenue growth of 10%-15% in 2025. The TIDES business continues to perform strongly, contributing to overall revenue stability [5]. - In 2024, the company reported a slight decline in revenue to 39.24 billion yuan, down 2.73% year-on-year, but excluding COVID-19 related projects, revenue increased by 5.20%. The net profit attributable to the parent company was 9.45 billion yuan, a decrease of 1.63% year-on-year [5]. - The company’s gross margin for 2024 was 41.48%, with a net profit margin of 24.38%, indicating stable profitability despite slight revenue declines [5]. Financial Summary - Revenue projections for 2025-2027 are 42.33 billion, 48.38 billion, and 57.11 billion yuan, reflecting year-on-year growth rates of 7.86%, 14.29%, and 18.05% respectively [5][12]. - The net profit attributable to the parent company is forecasted to be 11.16 billion, 13.30 billion, and 16.01 billion yuan for 2025-2027, with growth rates of 18.10%, 19.14%, and 20.43% respectively [5][12]. - The company’s P/E ratio is projected to decrease from 21.39 in 2025 to 12.62 by 2027, indicating an improving valuation over time [5][12]. Business Segments Performance - The TIDES business segment achieved a revenue of 5.80 billion yuan in 2024, marking a robust growth of 70.1% year-on-year, with backlog orders increasing by 103.9% [5]. - The chemical business segment reported a revenue of 29.05 billion yuan, with a growth rate of approximately 11.2% when excluding COVID-19 related revenues [5]. - The testing business segment saw a revenue of 5.67 billion yuan, with a slight decline of 4.8%, while the clinical CRO and SMO services grew by 2.8% [5]. Order Backlog - The company’s order backlog reached 49.31 billion yuan, representing a significant increase of 47.0% year-on-year, indicating strong future revenue potential [5]. Conclusion - The company's integrated, end-to-end strategy is expected to solidify its competitive advantages and drive long-term growth, justifying the "Buy" rating [5].