Huaxi Securities Co.,Ltd. has published a research report stating that WUXI XDC (02268), as an integrated CDMO company specializing in XDC services, is expected to become a core global XDC CDMO supplier in the future, leveraging domestic engineering talent advantages and integrated synergies. The firm forecasts revenues of 60.3/82.1/107.7 billion yuan for 2025-2027 respectively, with corresponding EPS of 1.27/1.74/2.37 yuan. Based on the closing price of HK$74.5 per share on September 26, 2025 (HKD/RMB exchange rate of 0.92), the PE ratios are 54/39/29x respectively. Considering the company's position as a core XDC CDMO supplier and continued high-speed growth over the next three years, Huaxi Securities initiates coverage with a "Buy" rating.

Key investment highlights from Huaxi Securities:

ADC R&D remains highly active, with ADC CDMO market expected to exceed $10 billion by 2030

Antibody-drug conjugates (ADC) have become one of the most promising and rapidly developing therapeutic approaches, particularly benefiting from sustained activity in global financing, mergers and acquisitions, and business development deals. As of H1 2025, the global XDC pipeline totaled 2,167 programs, up 43.5% year-over-year, including 461 novel ADC pipelines (+87.4% YoY), accounting for 21.3%, all showing significant growth.

Currently, 19 ADC products have been approved globally, generating combined revenues of $13.6 billion in 2024, up 35% year-over-year, with a 2020-2024 revenue CAGR of 37%, demonstrating rapid revenue scale expansion. Given the sustained activity in ADC/XDC R&D pipelines and future high-speed growth in terminal revenue scale, the firm estimates the ADC CDMO market size at $2.47 billion in 2024, reaching $10.24 billion by 2030, representing a CAGR of 26.7%.

Global integrated XDC CDMO core supplier with strong capital expenditure adding certainty to future performance growth

Based on the company's global engineering talent advantages and integrated service advantages spanning "Mab intermediates + Linker/payload + DS + DP," the company has become a core global supplier in the CMC business stage. As of H1 2025, WUXI XDC serves 103 global XDC clinical pipelines, currently capturing 30%-35% of global XDC clinical pipelines.

Considering the company's continued upward pipeline growth trend, sustained high-speed growth in order backlog, and ongoing strong capital expenditure, the firm expects the company to maintain high-speed short-term performance growth. With 19 Phase III projects and 11 PPQ projects (as of mid-2025 interim report), and current partnerships with 13 of the world's top 20 pharmaceutical companies, the firm expects the company to gradually launch core blockbuster commercial products over the next few years, contributing core performance upside for the next 3-5 years.