20260429-招银国际-药明康德-603259.SH-1Q26_results_small_molecule_D_M_fuelling_overall_growth_6页_1021kb

WuXi AppTec (603259 CH) 1Q26 Summary

Core Financial Performance

• 1Q26 Revenue: RMB12.4 billion, up 28.8% YoY.
• Continuing Operations Revenue: RMB12.4 billion, up 39.4% YoY.
• Adj. Non-IFRS Attributable Net Profit: RMB4.6 billion, up 71.7% YoY.
• Full-Year Revenue Forecast: 1Q26 revenue represents 24.1% of the full-year forecast, higher than the historical average of 18-20%.
• Backlog Growth: Backlog for continuing operations increased by 23.6% YoY (or 29% YoY excluding FX fluctuations) to RMB59.8 billion.
• New Orders: New orders in 1Q26 grew by over 25%.

Business Highlights

• CRDMO Model: WuXi AppTec's CRDMO model continues to drive growth by funneling projects from drug discovery to development. The company delivered +420,000 new compounds over the past 12 months and converted 83 projects from R to D.
• TIDES Segment: TIDES saw a modest 6.1% YoY increase in 1Q26 due to product delivery pacing, but management expects ~40% full-year growth based on a strong backlog.
• Small Molecule D&M Growth: Revenue from small molecule D&M surged by 80.1% YoY in 1Q26, driven by oral GLP-1 drugs, becoming a new growth engine.
• Capacity Expansion: The company is accelerating construction of the new Changzhou site, which will include both small molecule and TIDES capacity. Management targets 130,000 liters of solid-phase synthesis reactor volume by end of 2026, up from 100,000 liters in 2025.
• Strategic Cooperation: A strategic agreement with the Saudi government is progressing, supporting long-term global capacity expansion.
• Capex Forecast: 2026 capital expenditure is expected to be RMB6.5-7.5 billion, a 17.3-35.4% YoY increase.

Earnings and Forecasts

• Earnings Revision: CMBIGM has revised its earnings forecasts upward, reflecting strong performance and growth momentum.
• 2026E Revenue Growth:
  • Continuing operations: 15.2% YoY
  • Full-year: 15.8% YoY
• 2026E Adj. Net Profit Growth:
  • Continuing operations: 26.2% YoY
  • Full-year: 26.2% YoY
• 2027E and 2028E Forecasts:
  • Revenue: 16.3% / 14.8% YoY
  • Adj. Net Profit: 18.0% / 15.8% YoY
• Adjusted EPS:
  • 2026E: RMB6.33
  • 2027E: RMB7.47
  • 2028E: RMB8.65
• Consensus EPS:
  • 2026E: RMB5.71
  • 2027E: RMB6.76
  • 2028E: RMB7.89

Valuation and Target Price

• Target Price (TP): Raised from RMB133.00 to RMB143.00, based on DCF valuation.
• WACC: 9.39%, unchanged.
• Terminal Growth Rate: 2.00%, unchanged.
• Equity Value (DCF): RMB426,689 million.
• P/E (Adjusted):
  • 2026E: 17.5x
  • 2027E: 14.8x
  • 2028E: 12.8x
• Price per Share: RMB143.00.
• Current Price: RMB110.57.
• Up/Downside: 29.3%.

Shareholding and Market Data

• Market Cap: RMB329,914 million.
• Avg 3 Mths Turnover (RMB mn): 3,526.0.
• 52-Week High/Low (RMB): 112.85 / 58.25.
• Total Issued Shares (mn): 2,983.8.
• Shareholding Structure:
  • HK Investors: 22.9%
  • Ge Li and Concerted Parties: 16.4%

Share Performance

• 12-Month Price Performance:
  • Absolute: 14.0%
  • Relative: 9.4%
• 3-Month Price Performance:
  • Absolute: 15.5%
  • Relative: 17.6%
• 6-Month Price Performance:
  • Absolute: 6.4%
  • Relative: 4.0%

Analyst Recommendations

• Analyst Rating: BUY (Maintain).
• Reasoning: Strong momentum in small molecule D&M business and revised forecasts justify the target price increase.
• DCF-Based TP: RMB143.00, reflecting confidence in future growth and profitability.

Profitability Metrics

• Gross Profit Margin:
  • 2026E: 50.16%
  • 2027E: 50.11%
  • 2028E: 49.82%
• Operating Margin:
  • 2026E: 39.92%
  • 2027E: 40.63%
  • 2028E: 41.13%
• Adj. Net Profit Margin:
  • 2026E: 36.05%
  • 2027E: 36.59%
  • 2028E: 36.92%
• ROE:
  • 2026E: 22.4%
  • 2027E: 22.4%
  • 2028E: 22.0%

Liquidity and Financial Health

• Net Debt to Equity:
  • 2026E: 0.4x
  • 2027E: 0.4x
  • 2028E: 0.5x
• Current Ratio:
  • 2026E: 3.5x
  • 2027E: 3.8x
  • 2028E: 4.2x
• Working Capital:
  • 2026E: RMB-337 million
  • 2027E: RMB-1,843 million
  • 2028E: RMB-1,971 million

Valuation Ratios

• P/E (Adjusted):
  • 2026E: 17.5x
  • 2027E: 14.8x
  • 2028E: 12.8x
• P/B:
  • 2026E: 3.5
  • 2027E: 3.0
  • 2028E: 2.6
• P/CFPS:
  • 2026E: 16.1x
  • 2027E: 14.5x
  • 2028E: 12.5x
• Dividend Yield:
  • 2026E: 1.8%
  • 2027E: 2.1%
  • 2028E: 2.4%

Risk and Disclaimer

• Investment Risk: There are risks involved in trading securities. Past performance does not guarantee future results.
• CMBIGM Disclaimer: The report is for informational purposes only and does not constitute investment advice. CMBIGM is not liable for any losses arising from reliance on the information.
• Analyst Certification: The analyst certifies that the views expressed are personal and not influenced by compensation.
• Conflict of Interest: CMBIGM may have investment banking relationships with the companies mentioned, which could affect the objectivity of the report.