2026 Investor Day: CRDMO model capturing next-gen growth
药明康德(603259)
WuXi AppTec (WXAP) held its 2026 Investor Day on 6 Nov. Mgmt. indicated itsCRDMO business model will continue to generate a robust pipeline of high-qualityprojects, supporting the sustainable growth of its Chemistry segment and theCompany overall. Mgmt. also highlighted opportunities in the rising AIDD trend,reinforcing Biology segment as a core gateway to its downstream businesses.
CRDMO model continuing to generate a robust pipeline of highpotential projects. Leveraging the world’s largest early-stage drug R&Dplatform, WXAP is deeply embedded in the frontier of global innovative drugR&D and has used its large-scale manufacturing capacity to support theproduction of several global blockbuster drugs. It manufactured seven of thetop 10 best-selling chemically-synthetized drugs globally in 2025, driving theCompany’s near-term growth. At the same time, it participated in seven of 102025 Molecules of the Year nominees, laying a solid foundation for sustainedaccess to commercially attractive molecules. Specifically, WXAPmanufactures three of the nine globally approved GLP-1 molecules, as wellas three of the seven approved molecules in the KRAS space. Its scale inearly-stage drug R&D allows a broad participation in global innovative drugprograms and provides valuable industry insights. Such visibility supportsproactive capacity planning and enables WXAP to capture opportunities asthey arise, particularly in more complex modalities such as peptides, cyclicpeptides and molecular glues. Mgmt. is confident that its CRDMO model willcontinue to produce a robust and promising pipeline, enabling WXAP torapidly ramp up new capacity to convert bookings into revenue and profit.
AIDD to widen R&D funnel and create incremental business for CRDMOmodel. Mgmt. believes AI-driven drug discovery (AIDD) can expand drugdiscovery demand and project funnel. For instance, one leading AIDDcompany requires DMPK assay throughput up to 50 times that of a traditionalbiotech. AI is expected to generate deeper biological insights, accelerate newprogram launches, and enable more new modalities, thereby bringing newdeal flow into early research. AI-native customers need both data to optimizemodels and execution to advance pipelines. WXAP can meet the demand ofsuch customers with an established capability of a wet-dry closed loop.Because all drug R&D development remains subject to current regulatorystandards, WXAP can also capture translation needs from in vitro to in vivoand from discovery through development down the road. Although AIDDrelated business currently represents a small share of revenue, demand fromAIDD is growing rapidly, per mgmt. Mgmt. indicated that flexible delivery andrapid scale-up capabilities should translate this technological trend into futureorders and pipeline growth, further reinforcing Biology segment as a coregateway to the Company’s downstream businesses.
Maintain BUY. We maintain our DCF-based TP at RMB190.00 (WACC:9.39%, terminal growth: 2.00%; both unchanged). We expect WXAP’srevenue to grow by 35.1%/ 18.7%/ 15.7% YoY (for continuing operations:41.4%/ 18.7%/ 15.7% YoY) and adj. net profit to grow by 68.4%/ 18.8%/14.4% YoY in 2026E/ 27E/ 28E, respectively.
