【True Insight Institutional View】WuXi AppTec (02359.HK): 2026 Revenue Outlook in Line with Market Expectations

$WUXI APPTEC(02359.HK) achieved operating revenue of RMB 45.456 billion in 2025, a year-on-year increase of 15.8%, slightly exceeding market expectations of RMB 45.047 billion. Benefiting from improved capacity utilization and substantial investment income, net profit attributable to owners of the parent company reached RMB 19.195 billion, surging 105.2% year-on-year, significantly outperforming market expectations of RMB 16.51 billion. The overall gross profit margin also climbed to 47.0%, better than the expected 45.36%.

By segment, the chemical business was the main growth driver, with revenue rising 25.5% year-on-year to RMB 36.466 billion. However, the testing and biology businesses showed weak growth, increasing only 4.7% and 5.2% respectively. It is noteworthy that the doubling of annual profit mainly relied on over RMB 6.3 billion in one-time gains from the sale of equity in associates and business divestments. Moreover, revenue from both European and Chinese customers declined, reflecting growth pressures in some core operational segments.

Looking ahead to 2026, the company expects overall revenue to target RMB 51.3 to 53.0 billion. Although current ongoing business has orders in hand amounting to RMB 58.0 billion, the intensifying competition in the pharmaceutical outsourcing industry, coupled with persistent risks from international policy changes affecting global operations, means the outlook remains challenging. In summary, while the company's surface-level performance is impressive and exceeds market expectations, its high profit growth heavily depends on non-recurring gains. Investors should carefully assess the sustainability of its core profitability and macro risks.

Source: KGI Securities