CICC has released a research report stating that, considering increased costs from the integration of TOT Biopharm and the commencement of production in Singapore, it has kept its 2027 forecast for WUXI XDC (02268) largely unchanged. To better reflect core business trends, the report adopts a new adjusted net profit metric and introduces forecasts of RMB 21.25 billion for 2026 and RMB 28.93 billion for 2027. At the current share price, this corresponds to an adjusted P/E ratio of 26.5x for 2026 and 19.5x for 2027. CICC maintains its Outperform rating and target price of HK$88.0, implying adjusted P/E ratios of 47.0x for 2026 and 34.5x for 2027, which represents a potential upside of 56.7%. The key points from CICC are as follows:
2025 performance was in line with expectations. The company reported revenue of RMB 59.44 billion, a year-on-year increase of 46.7%. Gross margin stood at 36%, up 5.4 percentage points. Adjusted net profit attributable to shareholders was RMB 15.59 billion, rising 69.9% year-on-year. The improvement in profitability was primarily driven by enhanced operational efficiency and higher capacity utilization.
The company demonstrated strong order growth and smooth project pipeline progression. As of the end of 2025, the backlog of orders reached US$1.489 billion, up 50.3% year-on-year. New orders signed in 2025 totaled US$1.33 billion, an increase of 41%. In terms of project numbers, the company signed 70 new iCMC projects during the year, a record high, and added 10 new PPQ projects. By year-end, the cumulative number of iCMC and PPQ projects reached 252 and 18, respectively, with one commercial project, building potential for future commercial scale-up.
Global capacity expansion is accelerating, with mergers and acquisitions and overseas布局 progressing simultaneously. Overseas, the company expects its Singapore facility to receive GMP approval in the first half of 2026. By the end of 2025, it had already received applications for more than 10 late-stage iCMC projects. Domestically, the company anticipates GMP approval for the DP5/DP6 formulation lines at the Wuxi base by the end of 2027 or early 2028, and for the Jiangyin base (payload linker) in 2027. Regarding the Suzhou base, the acquisition of TOT Biopharm is expected to be completed by the end of March 2026. Capital expenditure for 2026, including the TOT acquisition, is projected to be approximately RMB 3.1 billion, with total investment from 2026 to 2030 estimated at around RMB 8 billion. The company's free cash flow turned positive in 2025, with cash and financial products totaling approximately RMB 7.5 billion by year-end.
The technology platform continues to expand, consolidating its leading innovative position. The company possesses proprietary technology platforms including WuXiDARx, X-LinC, WuXi Tecan1, and WuXi Tecan2. In February 2026, it entered into a strategic collaboration with Earendil Labs for the licensing of its self-developed WuXiTecan-2 payload linker technology, with a potential total transaction value of up to US$855 million. CICC expects this technology licensing to create opportunities for the company's medium- to long-term development.
Risks include drug development risks, slower-than-expected capacity ramp-up, intensified competition, and currency fluctuations.