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2025-07-30 13:23:38
Citigroup Raises WuXi AppTec's Target Price to HK$130, Rating Buy. Citigroup released a report stating that WuXi AppTec (02359.HK) management raised its 2025 guidance, primarily due to rapid capacity expansion rather than a surge in orders prior to the tariff war. Revenue from continuing operations is expected to reach RMB 42.5 to 43.5 billion, representing a year-over-year increase of 13% to 17% (previous guidance was RMB 41.5 to 43.0 billion, representing a year-over-year increase of 10% to 15%). Management expects continuing operating revenue to achieve double-digit year-over-year and first-half growth in the second half of 2025. The new full-year guidance implies a year-over-year increase of 5% to 10% and a year-over-year increase of 6% to 11%. Management expressed confidence in further improving its adjusted non-IFRS net profit margin in 2025. Citigroup did not significantly raise its revenue forecast for WuXi AppTec, as it had already raised its expectations after the release of its first-quarter results. Based on the gross profit margin expansion driven by the chemical business, the decline in administrative and management expenses, and higher investment returns, the bank raised its earnings per share forecast for WuXi AppTec by 3%, 6%, and 7% in 2025, 2027, and 2028, respectively. Therefore, given the more optimistic earnings outlook, the target price of its H shares was raised from HK$95 to HK$130. WuXi AppTec is the bank's top pick in the contract research and development manufacturing organization (CDMO) sector, with a buy rating.
