Nomura raises WUXI XDC's target price to 87.73 yuan, expects profit to rise by 47% this year

Nomura has lowered the revenue and profit forecasts for WuXi XDC (02268.HK) for 2025 by 4.5% and 8.7% respectively, reflecting the actual data released by the company last month.

Looking ahead to 2026, revenue is expected to increase by 37% year-on-year to RMB 8.1 billion, roughly in line with market expectations, as more projects enter the later stages of clinical trial applications, which will accelerate revenue growth in this segment. At the same time, the bank expects revenue from commercialized projects to be RMB 181 million, while revenue from the acquisition of Dongyao Pharmaceutical (01875.HK) is expected to be RMB 150 million.

In terms of profit, the bank anticipates a 47% increase in earnings for 2026; the gross profit margin is expected to expand by 0.7 percentage points year-on-year to 36.5%, based on economies of scale, although depreciation from the Singapore facility will have a slight drag; the operating profit margin is expected to expand by 1.1 percentage points year-on-year to 29.3%, reflecting improved efficiency. The bank has raised the target price for WuXi XDC from HKD 82.72 to HKD 87.73, maintaining a "Buy" rating