Citigroup: WuXi AppTec (02359) mid-term results significantly exceed expectations, raising the target price to HK$215.

Citibank published a research report stating that it has raised the target price of WuXi AppTec (02359) from HKD 183 to HKD 215, maintaining a "Buy" rating. It has also increased the revenue forecasts for 2026 to 2028 by 8% respectively, and raised the earnings per share forecasts by 18%, 19%, and 15% to reflect higher revenue guidance and improvements in profit margins. The bank believes that the demand across all business segments of WuXi AppTec is strong, with more late-stage CMO projects contributing to significant outperformance in the mid-year results this year. Management has adjusted the revenue guidance for 2026 to between RMB 58.5 billion and RMB 60.5 billion, with continuing operations expected to grow revenue year-on-year by 35% to 39%, accounting for the impact of US dollar depreciation of 3 to 5 percentage points. In the first half of the year, the companys continuing operations saw a growth of approximately 30% in unfulfilled orders, with newly signed orders increasing by over 40% year-on-year. Small molecule CDMO has become the engine of accelerated growth, with small molecule development and production business increasing by 73% year-on-year. Revenue from mid to late-stage pipelines now accounts for over 50% of total revenue, with over 80% of late-stage and commercialization projects coming from internal early-stage pipelines.