20260326-招银国际-药明生物-02269.HK-Resilient_demand_amid_macro_uncertainties_6页_660kb

WuXi Biologics (2269 HK) Summary

Core Content

WuXi Biologics reported strong financial performance in 2025, with revenue increasing by 16.7% YoY and adjusted attributable net profit rising by 17.9% YoY. The company exceeded revenue and net profit estimates by 1.2% and 9.6%, respectively. Backlog increased by 28.3% YoY to reach $23.7bn, indicating a second consecutive year of accelerated growth. The company also provided guidance for 2026, projecting revenue growth between 13% to 17%, which could be even higher excluding FX fluctuations.

Main Points

Revenue Growth

• 2025A: Revenue reached RMB 21,790 million, up 16.7% YoY.
• 2026E: Revenue is forecasted to grow by 14.6% YoY, with a target of RMB 24,974 million.
• 2027E: Revenue is expected to increase by 16.3% YoY to RMB 29,033 million.
• 2028E: Revenue is projected to grow by 15.0% YoY to RMB 33,387 million.

Adjusted Net Profit

• 2025A: Adjusted net profit reached RMB 5,640 million, up 17.9% YoY.
• 2026E: Adjusted net profit is forecasted to increase by 18.7% YoY to RMB 6,697 million.
• 2027E: Adjusted net profit is expected to grow by 17.4% YoY to RMB 7,859 million.
• 2028E: Adjusted net profit is projected to increase by 13.6% YoY to RMB 8,927 million.

Earnings Per Share (EPS)

• 2025A: Adjusted EPS was RMB 1.40.
• 2026E: Adjusted EPS is forecasted to reach RMB 1.62.
• 2027E: Adjusted EPS is expected to increase to RMB 1.90.
• 2028E: Adjusted EPS is projected to be RMB 2.16.

Adjusted P/E Ratio

• 2025A: Adjusted P/E ratio was 21.4.
• 2026E: Adjusted P/E ratio is expected to be 18.5.
• 2027E: Adjusted P/E ratio is projected to reach 15.8.
• 2028E: Adjusted P/E ratio is expected to be 13.9.

Key Business Drivers

• Bi- & Multi-Specific Antibodies and XDC Business: These segments continued to be key growth engines. Revenue from bi- & multi-specifics increased by 120% YoY, contributing nearly 20% of total revenue. XDC revenue grew by 46.7% YoY with 70 new projects signed.
• Pre-Clinical Projects: WuXi Bio added 209 new projects in 2025, representing a 38.4% YoY increase, with 186 being pre-clinical.
• PPQ Projects: The company completed 28 PPQ projects in 2025 and has 34 scheduled for 2026, indicating robust manufacturing growth potential.
• Capacity Expansion: WuXi aims to expand manufacturing capacity from 300k liters to 370k liters by 2029.

Operational Efficiency

• High-Margin Milestone Revenue: The "R" services generated US $150 million in upfront and milestone payments in 2025, significantly boosting profitability.
• Capacity Utilization: Improved utilization of existing and newly added capacities is expected to support growth.
• WBS (WuXi Bio Business System): Continued efficiency gains from WBS improved gross profit margin (GPM) by 1.5 ppts in 2025 and are expected to maintain margin improvements.

Key Financial Metrics

Revenue Growth Rate

• 2023A: 11.6%
• 2024A: 9.6%
• 2025A: 16.7%
• 2026E: 14.6%
• 2027E: 16.3%
• 2028E: 15.0%

Gross Profit Margin

• 2023A: 40.1%
• 2024A: 41.0%
• 2025A: 46.0%
• 2026E: 45.5%
• 2027E: 46.5%
• 2028E: 46.8%

Operating Margin

• 2023A: 27.4%
• 2024A: 28.5%
• 2025A: 34.4%
• 2026E: 33.6%
• 2027E: 35.9%
• 2028E: 36.7%

Adjusted Net Profit Margin

• 2023A: 27.6%
• 2024A: 25.6%
• 2025A: 25.9%
• 2026E: 26.8%
• 2027E: 27.1%
• 2028E: 26.7%

Return on Equity (ROE)

• 2023A: 9.0%
• 2024A: 8.2%
• 2025A: 11.0%
• 2026E: 9.1%
• 2027E: 12.0%
• 2028E: 12.0%

Valuation and Investment Outlook

Target Price

• Previous Target Price (HK$): 35.60
• Current Target Price (HK$): 39.00
• Up/Downside: 17.7%
• Current Price (HK$): 33.14

DCF Valuation

• 2026E: Equity value is estimated at HK$ 145,800 million.
• Terminal Value (2035E): HK$ 219,507 million.
• Terminal Growth Rate: 2.00%
• WACC: 9.32%

Sensitivity Analysis

• The DCF model's valuation is sensitive to changes in WACC and terminal growth rate.
• At a WACC of 9.32% and terminal growth rate of 2.00%, the valuation is HK$ 39.00 per share.

Analyst Ratings

• BUY: Maintained, with a target price of HK$ 39.00.
• HOLD: Represents a potential return of +15% to -10%.
• SELL: Indicates a potential loss of over 10%.
• NOT RATED: The stock is not rated by CMBIGM.
• OUTPERFORM: The industry is expected to outperform the relevant broad market benchmark.
• MARKET-PERFORM: The industry is expected to perform in-line with the relevant broad market benchmark.
• UNDERPERFORM: The industry is expected to underperform the relevant broad market benchmark.

Shareholding and Stock Data

• Market Cap (HK$ million): 137,118.1
• Average 3 Months Turnover (HK$ million): 1,282.9
• 52-Week High/Low (HK$): 42.18 / 17.82
• Total Issued Shares (million): 4,137.5
• WuXi Biologics Holdings: 8.7%
• BlackRock: 5.7%

Analyst Certification

• The analyst certifies that the views expressed in the report reflect their personal views.
• The analyst has not traded in the stock covered in the report within 30 days prior to the report's issue and will not trade within 3 business days after the issue.

Risk and Disclaimer

• The report contains general information and is not tailored to individual investors.
• Past performance is not indicative of future performance.
• CMBIGM is not liable for any loss or damage resulting from reliance on the report.
• Investors are encouraged to consult with a professional financial advisor before making investment decisions.

Conclusion

WuXi Biologics has demonstrated strong resilience in its financial performance amid macroeconomic uncertainties. Its focus on high-quality services, operational efficiency, and capacity expansion positions it well for continued growth. The company's guidance for 2026 and the DCF-based target price of HK$ 39.00 suggest a positive outlook for its future performance.