02269

The analyst rating from CLSA for WUXI BIO is based on several key factors: 1. Anticipated US Rate Cuts: CLSA expects potential US rate cuts in the second half of 2025 to create a more favorable funding environment, which is likely to drive market preference for the CXO sector, including WUXI BIO. 2. Increased R&D Investment: Global biotechnology companies, including WUXI BIO, are expected to ramp up their R&D investments in this more favorable funding environment from 2H25 to 2026, which is seen as a positive indicator for growth. 3. Response to Patent Cliffs: Pharma companies are also expected to increase their R&D spending to address patent cliff pressures, which will further benefit WUXI BIO. 4. Growth Projections: CLSA estimates that WUXI BIO will resume accelerated growth in 2025-27, leading to an increase in revenue and net profit forecasts by 0-4% and 0-7%, respectively. 5. Improving Gross Profit Margin: The company's gross profit margin is projected to improve from 28.5% in 2024 to 30.8% in 2027, indicating better profitability. 6. Target Price Increase: CLSA raised its target price for WUXI BIO from HKD34.8 to HKD42.6, reflecting confidence in the company's growth prospects. These factors collectively support CLSA's Outperform rating for WUXI BIO.

Goldman Sachs increased its EPS forecasts for WUXI BIO due to better-than-expected improvements in gross profit margin (GPM), which expanded by 3.6 percentage points year-over-year to 42.7%. This improvement was attributed to reduced employee stock compensation, increased milestone revenue from the R&D segment, and better utilization of new capacity, which helped offset losses from the Ireland project. Management anticipates that GPM improvements will continue into the second half of 2025, driven by higher operational efficiency and capacity utilization, with a long-term GPM target of 50%.

The analyst rating for WUXI BIO (02269.HK) was reiterated as a Buy by Daiwa due to the company's 1H25 results meeting expectations, showcasing strong growth in revenue, gross profit margin (GPM), and backlog orders. Additionally, there is high visibility anticipated for the company's research-development-manufacturing (RDM) segments in 2H25, along with an expected continued improvement in GPM. As a result, Daiwa raised its target price from HKD30 to HKD35.5.

The analyst rating for WUXI BIO was influenced by a 16% year-over-year increase in sales and a 12% increase in adjusted net profit for the first half of 2025, which met market expectations. Additionally, the management's revision of the full-year revenue growth guidance from 12%-15% to 14%-16% indicates anticipated accelerated growth in uncompleted orders, supporting the company's long-term growth prospects. As a result, CLSA raised its target price for WUXI BIO and maintained an Outperform rating.