Citi has released a research report, raising the target price for the H-shares of WUXI LEAD from HK$62 to HK$67. This new target implies a forecasted price-to-earnings ratio of 39 times for the current year, with a "Buy" rating maintained.
The report also notes that the company has secured solid-state battery orders totaling RMB 1 billion for 2025. Management anticipates these orders will double to RMB 2 billion in 2026, with overseas and domestic Chinese clients each accounting for half of the total.
Furthermore, the company has entered into a strategic cooperation agreement with the Beijing Humanoid Robot Innovation Center. This partnership will focus on data collection and collaboration on humanoid robot assembly equipment. Citi believes this move will help WUXI LEAD expand into an equipment market segment with a rapidly growing total addressable market (TAM).
Following the company's participation in its 2026 China Elite Corporate Day, Board Secretary Yao Yao expressed the view that, considering the capacity expansion plans of leading battery manufacturers and the contributions from new technology pathways such as solid-state and sodium-ion batteries, 2026 is unlikely to represent the peak of the current upward cycle.
Management indicated that new order growth in 2026 could reach 40% to 50% year-over-year, surpassing the previous guidance of 30%.
The report points out that orders from the fourth quarter of 2024 are expected to convert into revenue starting from the second quarter of 2026. These orders have already shown improvement compared to the low point in the third quarter of 2024. Consequently, revenue and profit growth are anticipated to gradually improve after the first quarter of 2026.
Citi has raised its profit forecasts for WUXI LEAD for 2026 and 2027 by 10% and 9% respectively, reflecting the expected gradual improvement in revenue recognition.
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