Investment Rating - The investment rating for WuXi AppTec is maintained as "Buy" [10][47]. Core Insights - The global CRDMO network of WuXi AppTec is continuously strengthening, benefiting from the development of small molecule CRO services [3]. - The R&D segment is effectively driving new customer acquisition, contributing significantly to the company's growth [5]. - The D&M segment is experiencing substantial capacity release and management improvements, leading to a significant increase in per capita revenue [4]. Summary by Sections Global CRDMO Network and Market Trends - WuXi AppTec has established 15 operational bases globally, covering regions such as China, the USA, Switzerland, and Singapore. The global R&D pipeline is thriving, with a continuous increase in both the types and numbers of new molecules. By 2024, small molecules, including peptides and oligonucleotides, will account for 54.3% of the overall pipeline [3]. - Global R&D spending is projected to rise from $277.6 billion in 2024 to $476.1 billion by 2030, with a significant increase in the use of CRO outsourcing services, expected to exceed 65% by 2034 [3]. D&M Segment Performance - The backlog of unfulfilled orders has surged from 7 billion yuan at the end of 2018 to 56.7 billion yuan by mid-2025. The capital expenditure for the D&M segment is expected to rise from 28% in 2018 to 85% in 2025, resulting in a doubling of per capita revenue from 542,000 yuan in 2018 to an estimated 1,118,000 yuan in 2025 [4]. - Management efficiency has improved, with the management expense ratio decreasing from 15.3% in 2018 to 7.5% in mid-2025 [4]. R&D Segment Contributions - The R&D segment, which includes chemistry, biology, and preclinical testing, has been pivotal in attracting new clients, contributing over 70% of new customer acquisitions in 2024. Among these new clients, 35% have successfully secured financing in the past five years, indicating strong project potential [5]. - Since 2018, the overall order growth has achieved a compound annual growth rate (CAGR) of 38%, with the D&M segment experiencing a remarkable CAGR of 55% [5]. Pipeline and Innovation - The R&D segment has successfully delivered over 440,000 new compounds, with the D&M segment adding 412 new molecules in the first half of 2025, bringing the total pipeline to over 3,400 molecules, including 76 commercial projects [6]. - WuXi AppTec has supported 20% of the 40 small molecule drugs approved by the FDA in 2024, showcasing its significant role in the industry [6]. Financial Projections - Revenue forecasts for 2025-2027 have been revised upwards to 434.72 billion yuan, 501.78 billion yuan, and 573.21 billion yuan, respectively. The net profit estimates have also been increased to 148.53 billion yuan, 140.30 billion yuan, and 161.41 billion yuan for the same period [10][47].

Core Viewpoint - The global drug development model has fundamentally shifted from a "solo" approach to a collaborative one, with the rise of the CXO industry accelerating new drug development processes [1] Group 1: CRDMO Model - WuXi AppTec's CRDMO model integrates the entire drug development process from research (R) to development (D) and commercialization (M), allowing the company to capture industry innovation trends and provide downstream business support [2] - The CRDMO model has enabled WuXi AppTec to establish partnerships with over 150 companies in the targeted protein degradation (TPD) field, synthesizing more than 188,000 complex TPD compounds, with over 70 entering preclinical stages and more than 10 in late-stage development [2] Group 2: Operational Efficiency - The integrated CRDMO model facilitates seamless collaboration among multiple teams, reducing costs and project transfer risks, thus enhancing the efficiency of new drug development [3] - WuXi AppTec has expanded its global footprint from a single 650-square-meter lab to nearly 30 R&D and production bases worldwide, optimizing facility utilization and lowering investment costs and risks [4] Group 3: Financial Performance - WuXi TIDES reported a revenue of 5.03 billion yuan in the first half of 2025, reflecting a year-on-year growth of 141.6%, making it one of the fastest-growing segments for WuXi AppTec [5] - The company is also expanding its small molecule production capacity, with projections indicating that the total reactor volume at its Changzhou and Taixing facilities will exceed 4 million liters by the end of 2025 [5] Group 4: Quality and Compliance - WuXi AppTec's global operations adhere to high-quality standards, as evidenced by its two API production bases in Changzhou and Taixing passing FDA inspections without any non-compliance issues [6] Group 5: Workforce and Culture - The company has grown its team from 100 process chemists to over 3,000, enhancing its ability to meet diverse client needs without delays [7] - WuXi AppTec emphasizes its commitment to supporting drug discovery, development, and production, aiming to benefit the industry, clients, and ultimately patients [7]