WuXi XDC reported 2025 financial results, delivering a robust 46.7% YoY increase in revenue with a significant YoY growth of 69.9% for adj. attributable net profit. The Company's 2025 revenue slightly beat our forecast by 0.6%, whereas its adj. net profit came in marginally below our estimate by 1.6%. As of the end of 2025, its backlog surged by 50.3% YoY to reach US$1.49bn, while newly signed orders during the year grew by 41% YoY to US$1.33bn, sustaining the rapid growth momentum. Driven by this strong order book, mgmt. anticipated 2026 revenue to grow by more than 40% YoY (USD-denominated), with the GPM expected to remain at least flat compared to 2025.
Strong momentum of conjugated drug R&D and manufacturing demand continued. Fueled by robust demand from both Chinese and US clients, WuXi XDC signed a record-breaking 70 new iCMC projects in 2025, up 32% YoY. Note that 22 of these projects were transferred from external sources, highlighting WuXi XDC's growing customer trust and competitive edge within the global XDC CDMO industry. Furthermore, novel XDC projects accounted for nearly 50% of newly signed projects, implying WuXi XDC's active role in the frontier fields of conjugated drugs. In addition, PPQ projects skyrocketed by 125% to 18 in 2025, signaling strong potential for commercial business in the near future. Given the company's robust "D" capabilities and the highly encouraging outlook for its commercialization business, mgmt. anticipated that by 2030, 20% of total revenue will be derived from novel XDC projects, and another 20% will come from commercial-stage projects.
Significantly strengthened global manufacturing network. In Jan 2026, WuXi XDC announced the acquisition of BioDlink (1875.HK, NR). Beyond expanding customer reach and project pipeline, the acquisition will rapidly boost its production capacities, particularly the highly sought-after ADC DS and DP capacities. For instance, BioDlink's annual DP capacity of 8 million vials slightly exceeds WuXi XDC's current largest drug product facility, DP3, which has an annual capacity of 7 million vials. Domestically, the Company is constructing a new payload-linker site in Jiangyin, with a planned capacity five times the current level of its existing Wuxi site. Internationally, its Singapore site is expected to achieve GMP release in 1H26, while the US site is currently in site-selection phase. This continuous expansion of global capacity network will enable WuXi XDC to better serve its worldwide client base. WuXi XDC plans to invest a total of RMB8.0bn in Capex between 2026 and 2030. For 2026 alone, Capex is projected to reach RMB3.1bn, representing a massive 158% YoY jump over 2025. Out of this 2026 budget, RMB1.68bn is earmarked specifically for BioDlink facilities to ensure seamless integration and operational excellence.
Maintain BUY. To factor in the updated guidance, we reduce our forecasts for bottom line. We project WuXi XDC’s revenue to grow by 36.2%/ 31.7%/ 29.9% YoY and adj. net profit to increase by 34.5%/ 31.7%/ 32.5% YoY in 2026E/ 27E/ 28E, respectively. Hence, we cut our DCF-based TP from HK$88.0 to HK$82.0 (WACC: 9.67%, terminal growth: 2.00%; both unchanged). We are still positive on the long-term growth of WuXi XDC.