JPM: WUXI APPTEC Issues Strong Profit Forecast; Market Expected to Respond Favorably

The analyst rating of Outperform for WUXI APPTEC (02359.HK) by CLSA is based on several key factors. The broker anticipates that WUXI APPTEC will benefit from a rebound in outsourcing demand and reduced policy uncertainty, leading to significant earnings growth in 2026. Additionally, three major catalysts in the first quarter of 2026 are expected to drive the company's share price performance: 1. An industry summit from January 12-15 that will provide updates on the CRO industry and boost market confidence. 2. The announcement of the US Department of Defense's 1260H list between January and February, which is expected to alleviate concerns about policy uncertainties. 3. The company's 2026 results guidance in March, which will further confirm its earnings growth potential. These factors contribute to the positive outlook and the raised target price of $143.4.

The analyst rating for WUXI APPTEC was influenced by the company's strong financial performance in its 3Q25 results, which exceeded expectations. BOCI highlighted a year-over-year increase of 15% in revenue and 53% in net profit, driven by the scaling up of late-stage clinical and commercialization projects. Additionally, the company's gross profit margin (GPM) improved significantly, rising by 7.8 percentage points to 49.8%. As a result of this positive performance, BOCI raised its target price for the stock and maintained a Buy rating.