Key Takeaways:
Wuxi AppTec reported H1 2026 net profit of RMB 11.08 billion, up 29.4% year-on-year, as revenue rose 38.9% to RMB 28.9 billion.
"The results were driven by the greater success of multiple customers' products and our unique CRDMO model," Dr. Ge Li, chairman and CEO of Wuxi AppTec, said.
Adjusted non-IFRS net profit jumped 83.2% to RMB 11.57 billion, with the margin expanding 9.7 percentage points to 40.0%. Backlog for continuing operations reached RMB 66.43 billion, up 25.2%. The chemistry business generated RMB 24.99 billion, up 53.3%, while testing rose 31.5% to RMB 2.48 billion and biology gained 11.2% to RMB 1.39 billion.
Management raised full-year revenue growth guidance to 35%-39% from 18%-22%, targeting total revenue of RMB 58.5-60.5 billion. Shares jumped 11.23% to HKD 181.2 on Aug. 4, with turnover of HKD 1.97 billion.
In the second quarter alone, revenue surged 47.7% year-on-year to RMB 16.46 billion, a quarterly record, with net profit up 31.5% to RMB 6.43 billion and gross margin expanding 10.1 percentage points to 55.7%. The chemistry segment led the quarter, with revenue up 61% to RMB 14.4 billion, including a 67% gain in drug substance and manufacturing to RMB 8.1 billion and a 75% jump in TIDES to RMB 4.9 billion.
The board proposed an interim cash dividend of RMB 5.10 per 10 shares, about RMB 1.5 billion in total, up from RMB 3.50 a year earlier. The company distributed RMB 4.71 billion in its 2025 annual dividend.
Nomura raised its target price to HKD 209.99 from HKD 180.22 and kept a Buy rating, saying second-quarter results far exceeded expectations. The broker lifted its fiscal 2026 revenue and earnings forecasts by 11.3% and 15.2%, respectively. JPMorgan said second-quarter growth, margins and full-year guidance all beat expectations.
Management also raised capital expenditure guidance to RMB 7.5-8.5 billion from RMB 6.5-7.5 billion to accelerate global capacity expansion, including early initiation of a new Changzhou facility. Adjusted free cash flow guidance was lifted to RMB 13.5-14.5 billion from RMB 10.5-11.5 billion.
The guidance raise shows management expects pharmaceutical R&D outsourcing demand to keep accelerating. Investors will watch the interim report details and the pace of new capacity ramp-up, along with the company's ongoing legal challenge to its inclusion on the U.S. Department of Defense's 1260H list.
This article is for informational purposes only and does not constitute investment advice.
