2025-10-31 00:59Summary of Wuxi Apptec Conference Call Company Overview - Company: Wuxi Apptec - Industry: Pharmaceutical R&D services - Market Position: Largest chemical drug contract research, development, and manufacturing organization (CRDMO) in China [12][13] Key Financial Highlights - Q3 2025 Performance: - Revenue: Rmb12.1 billion, up 15.3% YoY and 8.2% QoQ, exceeding estimates [2] - Net Profit: Rmb3.5 billion, up 53.3% YoY, also beating estimates [2] - Adjusted non-IFRS net profit: Rmb4.2 billion, up 42.0% YoY [2] - Adjusted non-IFRS gross margin: 44.5%, improved by 6.1 percentage points YoY [2] - Backlog for continuing operations: Rmb59.9 billion, a strong 41.2% YoY increase [2] Business Segment Performance - Wuxi Chemistry: - Revenue: Rmb9.7 billion, up 15.3% YoY and 8.6% QoQ - TIDES business revenue: Rmb2.8 billion, up 91.2% YoY, contributing 29% to Wuxi Chemistry revenue [3] - TIDES backlog: Increased by 17.1% YoY [3] - Wuxi Testing: - Revenue: Rmb1.5 billion, up 2.1% YoY and 6.1% QoQ - CRO/SMO segment revenue: Down 6.4% YoY [3] - Wuxi Biology: - Revenue: Rmb696 million, up 5.9% YoY [3] Geographic Performance - US Market: Key growth driver with revenue up 31.9% YoY to Rmb22.2 billion [3] - Europe: Revenue increased by 13.5% YoY to Rmb3.8 billion [3] - China: Returned to positive growth with revenue of Rmb5.0 billion, up 0.5% YoY [3] Future Guidance and Strategic Moves - Revenue Guidance for 2025: Raised from Rmb42.5-43.5 billion to Rmb43.5-44.0 billion [4] - Continuing Revenue Growth Guidance: Increased from 13%-17% to 17%-18% YoY [4] - Divestiture: Announced divestiture of clinical CRO/SMO business for Rmb2.8 billion, allowing focus on core CRDMO business [4] Valuation and Investment Outlook - Price Target: Increased to HK$138.4 from HK$136.1, rated as "Buy" [5] - EPS Forecast Adjustments: Increased by 23.4% for 2025, with slight adjustments for subsequent years [5][10] - Market Capitalization: Approximately HK$326 billion (US$42.0 billion) [7] Risks and Considerations - Key Risks: Include potential project delays, geopolitical uncertainties, and lower-than-expected R&D spending by pharmaceutical companies [13] - Market Sentiment: Positive outlook with expectations of improved global biopharma funding [15] Additional Insights - Analyst Ratings: 12-month rating of "Buy" with a forecast stock return of 27.1% [11][19] - Market Performance: Stock price as of October 24, 2025, was HK$110.50, within a 52-week range of HK$121.40-45.65 [7]