WuXi Bio reported financial results for 2025, with revenue increasing by 16.7% YoY and adj. attributable net profit rising by 17.9% YoY. Revenue and adj. net profit exceeded our estimates by 1.2% and 9.6%, respectively. Backlog grew by 28.3% YoY to reach US$23.7bn by the end of 2025, marking the second consecutive year of accelerated growth. Mgmt. initiated guidance for 2026, projecting a revenue growth of 13% to 17%, noting this figure would be even higher excluding the potential impact of FX fluctuations.
Resilient global demand for WuXi Bio’s high-quality service. In 2025, the Company added 209 new projects, representing a solid 38.4% YoY increase. Among these, 186 were pre-clinical projects, up 42% YoY, which clearly reflects the strong appetite for early-stage R&D services from global clients. More importantly, the Company's bi- & multi-specific antibody and XDC businesses continued to serve as critical growth engines. Bolstered by three potentially blockbuster commercial projects in the pipeline, revenue from bi- & multi-specifics skyrocketed by 120% YoY in 2025, contributing nearly 20% of the total revenue. Similarly, XDC segment maintained its rapid growth momentum, with revenue increasing by 46.7% YoY alongside a record-breaking 70 newly signed projects. Furthermore, the PhIII and commercial businesses resumed strong growth, posting a 26.4% YoY revenue increase in 2025 (vs a 3.2% decline in 2024). WuXi Bio completed a record-high 28 PPQ projects, with another 34 already scheduled for 2026, signaling robust future growth potential for its manufacturing business. To accommodate the increasing demand, WuXi Bio aims to expand its manufacturing capacity from the current 300k liters to 370k liters by 2029.
Robust operations to hedge against macro headwinds. While Mgmt. cautioned about potential negative impacts from FX fluctuations in 2026, we anticipate the Company will leverage its robust operational efficiency to offset these headwinds through three key avenues: 1) High-margin milestone revenue: leveraging its formidable early-stage R&D capabilities, the Company's “R” services generated US$150mn in upfront and milestone payments in 2025, significantly boosting overall profitability. We expect such revenue to continue making a substantial contribution to the bottom line in 2026. 2) Improving capacity utilization: driven by the continuous progress of PhIII and PPQ projects, the utilization rates of both existing and newly added capacities are expected to rise steadily. Notably, Ireland and the US sites contributed US$230mn in revenue in 2025, highlighting the Company's exceptional overseas operations. 3) Continuous efficiency gains from WBS: In 2025, WuXi Bio Business System (WBS) helped improve the GPM by 1.5ppts. As a managerial philosophy embedded in daily operations, WBS is set to continuously drive margin improvements moving forward, in our view.
Maintain BUY. To reflect an improved growth visibility, we raise our DCFbased TP from HK$35.6 to HK$39.00 (WACC: 9.32%, terminal growth: 2.00%, both unchanged). We forecast WuXi Bio’s revenue to grow by 14.6%/ 16.3%/ 15.0% YoY and adj. attributable net profit to increase by 18.7%/ 17.4%/ 13.6% YoY in 2026E/ 27E/ 28E, respectively.