Investment Rating - The report initiates coverage with a "Buy" rating for WuXi XDC [3][5][15] Core Insights - WuXi XDC is a global leader in bioconjugate drug CRDMO services, with a projected revenue CAGR of 102% from 2022 to 2024, driven by strong industry demand and capacity constraints [1][5] - The company plans to increase its capital expenditures (CAPEX) to over 7 billion RMB by 2029 to expand its production capacity, with significant investments in both domestic and international facilities [1][12] - The report highlights the rapid growth in project numbers and backlog orders, with a total of 13.29 billion USD in unfinished orders as of June 30, 2025, reflecting a year-on-year increase of 57.9% [2][12] Summary by Sections Company Overview - WuXi XDC provides comprehensive CRDMO services for bioconjugate drugs, facilitating the entire process from concept to commercialization [22] - The company has executed a total of 858 drug discovery projects since its inception, with 225 ongoing comprehensive projects as of mid-2025 [25] Market Dynamics - The ADC market is experiencing explosive growth, with ADC drugs becoming a prominent treatment modality, accounting for approximately 15.4% of FDA-approved biopharmaceuticals from 2019 to 2022 [40][42] - The global ADC market size has expanded from 2 billion USD in 2018 to 10.4 billion USD in 2023, with a projected CAGR of 38.6% [46] Financial Projections - Revenue forecasts for WuXi XDC are 60.01 billion RMB, 81.13 billion RMB, and 107.36 billion RMB for 2025, 2026, and 2027, respectively, with corresponding growth rates of 48.1%, 35.2%, and 32.3% [3][15] - The net profit estimates for the same years are 16.07 billion RMB, 21.71 billion RMB, and 29.10 billion RMB, reflecting growth rates of 50.3%, 35.1%, and 34.1% [3][15] Strategic Initiatives - The company is implementing a "global dual-plant production" strategy to enhance supply chain competitiveness, with significant investments in facilities in Shanghai, Wuxi, and Singapore [1][12] - WuXi XDC's advanced WuXiDARx™ technology aims to shorten the development cycle for ADC projects, achieving IND readiness in as little as 15 months [2][12]

Industry Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1]. Core Viewpoints - The nuclear medicine market is expected to grow significantly, with a projected global market size of USD 10.65 billion in 2023, reaching USD 31.44 billion by 2033, indicating a compound annual growth rate (CAGR) of 11.45% from 2024 to 2033 [4][19]. - The rise of Radionuclide Drug Conjugates (RDC) is a key driver for the nuclear medicine industry, with notable products like Pluvicto showing strong sales performance, achieving USD 1.392 billion in revenue in 2024, a 42% increase [19][22]. - China's nuclear medicine market is expected to grow from CNY 22 billion in 2017 to CNY 93 billion by 2025, with a CAGR of 32.4%, and further to CNY 260 billion by 2030, maintaining a high growth rate of 22.7% [26][28]. Summary by Sections Industry Overview - The closing index for the industry is 7754.01, with a 52-week high of 8490.25 and a low of 6070.89 [1]. Market Dynamics - The nuclear medicine sector is characterized by high barriers to entry and strong regulatory oversight, with significant advantages for companies with a comprehensive industry chain layout [6][29]. - The domestic nuclear medicine application level is significantly lower than that of developed countries, with a market primarily composed of traditional generic nuclear drugs [5][24]. Key Companies and Financial Projections - China Isotope & Radiation Corporation (1763.HK) and East China Pharmaceutical (002675.SZ) are leading players in the market, with extensive nuclear pharmacy networks and product pipelines [49][50]. - The financial performance of key companies indicates a robust growth trajectory, with China Isotope achieving a revenue of CNY 75.75 billion in 2024, and East China Pharmaceutical reporting CNY 10.12 billion in nuclear medicine revenue [49][50]. Regulatory Environment - Recent policies have been implemented to promote the development of the nuclear medicine industry, including the "Long-term Development Plan for Medical Isotopes (2021-2035)" which aims to enhance technology research and industry growth [26][27]. Future Outlook - The increasing focus on nuclear medicine, particularly in the context of precision therapy, is expected to drive further investment and innovation in the sector, with more domestic products anticipated to enter the market [19][24].