BOCI has upgraded its earnings forecast for WUXI APPTEC (02359) by 2.4% to 6.4% for 2025–2027 and raised its H-share target price from HK$122 to HK$127, maintaining an 18x forward P/E multiple for next year. The "Buy" rating was reiterated.

The bank noted that WUXI APPTEC's Q3 results exceeded expectations, continuing its strong first-half performance. Revenue rose 15% year-on-year to RMB 12.1 billion, while net profit surged 53% to approximately RMB 3.5 billion, driven by late-stage clinical and commercial project ramp-ups. Gross margin expanded by 7.8 percentage points to 49.8%.

Excluding forex impacts, new orders grew 18% YoY. The backlog reached RMB 60 billion, up 41% YoY, with conversion expected within 18 months, supporting 2026 growth visibility. Management raised full-year ongoing revenue growth guidance to 17%–18% (from 13%–17%).

Free cash flow guidance for 2025 was revised upward to RMB 8–8.5 billion, while capital expenditure was lowered to RMB 5.5–6 billion due to project adjustments. Global expansion remains on track, including Singapore's API plant (2027 startup), a U.S. formulation facility (late 2026), and Swiss site expansion. Cross-border client demand remains stable.