In the first half of 2026,WuXi AppTecAchieved revenue of RMB28.9 billion, up 39% year-on-year; The attributable net profit was 11.08 billion yuan, a year-on-year increase of 34%. The gross profit margin jumped by 9.4 percentage points to 53.2%, and the expense ratio narrowed simultaneously, resulting in a qualitative change in profit structure. The management immediately raised the annual revenue guidance from the original 51.3 billion to 53 billion yuan to 58.5 billion to 60.5 billion yuan, and the corresponding recurring revenue growth rate increased from 18% to 22% to 35% to 39%, far exceeding the buyer's previous optimistic expectation of about 30%.
WuXi AppTec surged more than 10% to HK$180.30 on Tuesday, the highest level since September 2021.
Jefferies maintains a buy rating on WuXi AppTec,And raised the target price of A shares from RMB 135 to RMB 165, and the target price of H shares from HK$138 to HK$210, with an increase of 22% and 52% respectively.Jefferies simultaneously raised its 2026 and 2027 EPS forecasts by approximately 39% each. Analysts believe that WuXi AppTec is the core beneficiary of the heavy volume of GLP-1 drugs, with high profit visibility in 2026.
All-round performance exceeded expectations, and the jump in gross profit margin was the key
In terms of revenue structure, the chemical sector is still the main engine, with revenue of 25.3 billion yuan in the first half of the year, a year-on-year increase of 53%. Among them, the revenue from small molecule drug discovery and manufacturing reached 15 billion yuan, a year-on-year increase of 73%, and 699 new molecules were added; The revenue of TIDES business was 7.26 billion yuan, up 44% year-on-year, the number of customers and the number of molecules increased by 39% and 68% respectively, and the gross profit margin of TIDES increased from 48.3% to 55.8%. The revenue of the testing and biology segments increased by 32% and 11% year-on-year, respectively, and the emerging modality business contributed more than 35% of the revenue of the testing segment in the first half of the year.
Oral GLP-1 drives rapid expansion of orders in hand
In terms of orders in hand, orders from continuing operations increased by 25% year-on-year to 66.4 billion yuan, further accelerating from 59.8 billion yuan (up 24% year-on-year) at the end of the first quarter. The capital expenditure guidance was raised simultaneously, and the annual capital expenditure increased from 6.5 billion to 7.5 billion yuan to 7.5 billion to 8.5 billion yuan. Jefferies believes that this signal confirms the certainty of demand in 2027.
Jefferies pointed out in the research report that investors' sensitivity to geopolitical risks is declining. The United States remains the largest market for WuXi AppTec. In the first half of the year, revenue from the United States increased from 14.24 billion yuan to 22.28 billion yuan, showing strong business resilience.
Jefferies raised the target price of A shares to RMB 165 and H shares to HK$210, both based on the DCF valuation, with the corresponding weighted average cost of capital of 11.9% and 10.8% for A shares and H shares, respectively, and the terminal growth rate is assumed to be 3.0%. According to Jefferies Research Report, analysts David Shang, Cui Cui and other synchronizedRaised its 2026 and 2027 revenue forecasts by about 19% to 20% each, and its EPS forecasts by about 39% each.
