Daiwa lifts WuXi AppTec target price to HK$232 after another Q3 beat

Stock News10-29 16:32

Daiwa has issued a research report noting that WuXi AppTec (HK: 02359) once again beat expectations in the third quarter and raised its guidance again, reaffirming a "Buy" rating and slightly lifting its target price from HK$230 to HK$232. The brokerage reiterated the stock as its top pick among CXO names.

The firm also raised its 2026 to 2028 earnings per share forecasts for WuXi AppTec by 4% to 7% to reflect stronger growth prospects.

Daiwa pointed out that the biggest positive surprise was a significant acceleration in backlog growth in the third quarter, which rose 36.4% year on year, outpacing the 25.2% year-on-year increase in the first half.

The company has also stepped up capacity expansion to support backlog growth, with the lower end of its 2026 capital expenditure guidance raised from RMB 7.5 billion to RMB 8 billion.

Daiwa noted that the third-quarter gross margin was 54.1%, holding at a historical high. However, management said the ramp-up of new capacity and macroeconomic uncertainties, such as a weaker U.S. dollar, could cause short-term gross margin volatility, and therefore maintained a cautious net profit guidance.

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Comments

  • badumdum
    09:51
    badumdum
    "Daiwa pointed out that the biggest positive surprise was a significant acceleration in backlog growth in the third quarter, which rose 36.4% year on year, outpacing the 25.2% year-on-year increase in the first half."
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