Magellian: WuXi AppTec (02359) beats expectations with interim results, reaffirms target price of HK$116.

Morgan Stanley released a research report stating that it reiterated a "outperforming the market" rating on WuXi AppTec (02359) with a target price of 116 Hong Kong dollars. The bank stated that WuXi AppTec's first half performance exceeded market expectations, with revenue reaching 20.8 billion RMB, a year-on-year increase of 20.6%; net profit increased by 1.02 times to 8.6 billion RMB. Excluding the one-time gain of 3.3 billion RMB from selling WUXI XDC (02268) equity, recurring net profit increased by 26.5% to 5.9 billion RMB. The bank pointed out that TIDES business revenue increased by 1.42 times to 5 billion RMB, possibly driven by GLP-1 raw materials, far exceeding the annual growth target of 60%; second quarter gross margin also reached a new high of 46.9%, mainly due to improved production efficiency in the chemical business and an increase in later-stage projects.