Bank of America Securities: Raises WuXi AppTec (02359) target price to HKD 204.3 and upgrades earnings forecast, with interim results exceeding expectations.
The bank believes that this interim performance demonstrates solid demand for small molecules and peptide business, an accelerated pace of commercialization, and improved operational leverage. Additionally, the strong growth of projects in the U.S. has alleviated market concerns about the biomanufacturing safety bill.
Bank of America Securities released a research report stating that WuXi AppTec (02359) saw strong revenue and profit growth in the first half of the year, surpassing the bank's full-year expectations. All business segments experienced growth, with the continuing operations' backlog reaching 66.43 billion yuan, a year-on-year increase of 25.2%, providing good visibility for revenue growth. The bank reiterated its "Buy" rating.
Considering the stronger commercialization of pipeline products, sales growth, and better-than-expected margin improvements, Bank of America Securities raised its revenue and adjusted profit forecasts for WuXi AppTec by 12.9% and 37.5%, respectively. The target price for H shares was increased from 171.7 HKD to 204.3 HKD. The report noted that the interim results indicated robust demand in small molecules and peptide businesses, accelerated commercialization, and favorable operational leverage. Additionally, the strong growth of projects in the U.S. alleviated market concerns regarding the Biosecurity Act.
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