Goldman Sachs: WuXi AppTec's earnings last quarter exceeded expectations, focusing on new order momentum and clinical CRO business, target price HKD 109.6
Goldman Sachs released a research report stating that WuXi AppTec's revenue in the third quarter reached 12.1 billion RMB, a year-on-year increase of 15.3%. The company has raised its full-year revenue guidance for 2025 to 43.5 to 44 billion RMB, and the guidance for year-on-year growth in continuing operations has been raised to 17% to 18%. Goldman Sachs has set a target price of HKD 109.6 for its Hong Kong stocks, based on a forward price-to-earnings ratio of 18 times. Management reiterated its commitment to global capacity building, and the free cash flow guidance has been raised to 8 to 8.5 billion RMB
According to the Zhitong Finance APP, Goldman Sachs released a research report stating that the market is expected to respond positively to WuXi AppTec (02359)'s strong performance and new order momentum, although concerns may arise regarding the slowdown in the growth of TIDES (oligonucleotide and peptide) order reserves. WuXi AppTec's revenue in the third quarter reached RMB 12.1 billion, a year-on-year increase of 15.3%, or a year-on-year increase of 19.7% when calculated based on continuing operations. Notably, the TIDES business grew by 91% year-on-year, accounting for 23% of total revenue. Goldman Sachs set a 12-month target price for WuXi AppTec's Hong Kong stock at HKD 109.6, based on a 12-month forward price-to-earnings ratio of 18 times, while the target price for WuXi AppTec (603259.SH) is RMB 105.6.
Goldman Sachs indicated that WuXi AppTec's management has raised its full-year revenue guidance for 2025 to RMB 43.5 billion to RMB 44 billion (previously RMB 42.5 billion to RMB 43.5 billion), with the revenue growth guidance for continuing operations raised to an annual increase of 17% to 18% (previously an annual increase of 13% to 17%), and it is expected that the adjusted net profit margin under non-International Financial Reporting Standards will improve.
Goldman Sachs noted that WuXi AppTec's capital expenditure in the third quarter was RMB 1.47 billion (RMB 3.57 billion for the first nine months). The full-year capital expenditure budget has been lowered to RMB 5.5 billion to RMB 6 billion (previously RMB 7 billion to RMB 8 billion) due to longer-than-expected settlement periods for some projects. Therefore, the free cash flow guidance has been raised to RMB 8 billion to RMB 8.5 billion (previously RMB 5 billion to RMB 6 billion). Management reiterated its commitment to advancing global capacity construction
