JP Morgan raises WUXI BIO's target price to 51 yuan as performance exceeds expectations and order momentum is strong

JP Morgan published a research report indicating that WuXi Biologics (02269.HK) has exceeded market consensus and JP Morgan's expectations for its 2025 performance forecast. The company expects full-year revenue to be RMB 21.8 billion, a year-on-year increase of 16.7%, which is roughly in line with market consensus and JP Morgan's forecast. Net profit is expected to reach RMB 4.9 billion, approximately 11% and 17% higher than market consensus and JP Morgan's forecast, respectively. After adjusting for one-time costs, the non-International Financial Reporting Standards net profit is expected to rise by 22% to RMB 6.59 billion.

This earnings forecast, along with the sustained project momentum emphasized at JP Morgan's recent global healthcare conference, enhances the bank's confidence in WuXi Biologics' growth prospects for this year and beyond.

JP Morgan has raised its sales forecasts for 2025 to 2027 by 2% to 5%, and for 2028 and beyond by 6% to 9%, due to better-than-expected momentum in acquiring new orders. The bank now predicts sales growth of 17.3% and 18.0% for 2026 and 2027, respectively. Due to gross margin expansion exceeding expectations, the bank has also raised its gross margin assumptions by 2 to 3 percentage points, expecting gross margins of 46.0%, 46.2%, and 46.5% for 2025, 2026, and 2027, respectively. These updates translate into a 13% to 23% upward revision of earnings forecasts for 2025 to 2027. JP Morgan now predicts that adjusted net profit attributable to shareholders will grow by 17.4% and 20.9% in 2026 and 2027, respectively.

The bank has raised its target price from RMB 37 to RMB 51 and extended the target price deadline by six months to December 2026, maintaining an "Overweight" rating