WuXi Apptec (603259.SH; 02359.HK) shares experienced a simultaneous surge on both its A-share and H-share markets, with prices reaching new recent highs. As of the latest trading, its H-shares jumped over 14% to HKD 186.60, the highest level since July 2021. Meanwhile, its A-shares hit the daily 10% upper limit, reaching RMB 141.35, a level not seen since October 2021.
The rally was ignited by the company's semi-annual report for 2026, released on the evening of August 3, which comprehensively beat market expectations. For the first half of 2026, WuXi Apptec reported total revenue of RMB 28.897 billion, representing a 38.93% year-over-year increase. Net profit attributable to shareholders reached RMB 11.080 billion, up 29.43% from the same period last year. This marks the first time the company's half-year net profit has surpassed the RMB 10 billion threshold. The second quarter was particularly strong, with revenue of RMB 16.462 billion, up 47.71% year-over-year and 32.37% quarter-over-quarter, and net profit of RMB 6.429 billion, up 31.49% year-over-year and 38.21% quarter-over-quarter. The company's gross margin for the first half reached 53.9%, an improvement of 9.46 percentage points year-over-year, setting a new record for the period. The board has proposed a cash dividend of RMB 5.10 for every 10 shares, with a total payout of approximately RMB 1.506 billion.
Where to Begin Your Analysis
From a business segment perspective, the chemistry division continued to be the primary growth engine. This segment generated RMB 24.986 billion in revenue for the first half, a 53.28% increase. Within this, the small-molecule D&M (development and manufacturing) business contributed RMB 14.99 billion, up 72.7% year-over-year. As of the end of June, the total number of small-molecule D&M projects reached 3,731, with a net addition of 15 commercial and Phase III projects during the half. The highly anticipated TIDES (oligonucleotide and peptide) business maintained rapid growth, achieving revenue of RMB 7.26 billion, a 44.3% increase. The company projects full-year TIDES revenue growth of approximately 45%. The testing segment posted revenue of RMB 2.481 billion, up 31.53%, with the drug safety evaluation business growing 42.8%. The biology segment contributed RMB 1.391 billion, an 11.21% increase. All three core business segments achieved double-digit growth. Furthermore, the company's order backlog for continuing operations stood at RMB 66.43 billion as of June 30, 2026, a 25.2% increase year-over-year, reaching a new all-time high.
Driven by its strong first-half performance, WuXi Apptec has significantly raised its full-year guidance for 2026. The company now expects full-year revenue to be between RMB 58.5 billion and RMB 60.5 billion, a substantial increase from the previous range of RMB 51.3 billion to RMB 53.0 billion. The year-over-year growth rate for continuing operations revenue has been revised up to 35%–39% from the prior 18%–22%. To accelerate its global capacity expansion, the company has initiated the early construction of a new base in Changzhou. Capital expenditure guidance for 2026 has been raised from RMB 6.5–7.5 billion to RMB 7.5–8.5 billion, while adjusted free cash flow guidance has been lifted from RMB 10.5–11.5 billion to RMB 13.5–14.5 billion.
Several brokerages are optimistic about WuXi Apptec's prospects and have raised their target prices. CICC noted that the first-half results exceeded expectations, driven by the CRDMO model's strength, process optimization, an increase in late-stage and commercial projects, and improved capacity efficiency. CICC has raised its net profit forecasts for 2026/2027 by 19.8%/32.2% to RMB 20.4 billion/RMB 25.3 billion and increased its A-share target price by 28.5% to RMB 167 and its H-share target price by 42.6% to HKD 211.
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