27 Oct 2026 CMB International Global Markets | Equity Research | Company Update

WuXi AppTec (603259 CH) Accelerated backlog growth with

WuXi AppTec (603259 CH)

Accelerated backlog growth with further further guidance raise in 3Q26 guidance raise in 3Q26

WuXi AppTec (WXAT) delivered another strong quarter: 3Q26 revenue rose 38.0% YoY, with continuing-operations revenue up 43.5% YoY, while adj. nonIFRS net profit increased 61.3% YoY. Notably, backlog as of end-3Q26 reached RMB76.74bn, up 36.4% YoY, accelerating from 25.2% YoY as of end-2Q26. Per mgmt., 9M26 new bookings increased over 60% YoY, providing further fundamental support for earnings outlook. Once again, mgmt. raised 2026 revenue guidance to RMB61.0–61.9bn from RMB58.5–60.5bn and continuingoperations growth to 40–42% YoY from 35–39% YoY. Mgmt. maintained its stable adj. non-IFRS net-margin outlook, and narrowed capex guidance to RMB8.0–8.5bn from RMB7.5–8.5bn.

 Continuously exceptional growth and pipeline expansion within WuXi Chemistry. WuXi Chemistry remained the principal growth engine for WXAT, with 3Q26 revenue up 48.6% YoY. Small-molecule D&M revenue grew 54.5% YoY, moderating from 72.7% in 1H26 but still benefiting from high-quality molecule inflows, pipeline progression into later stages and proactive capacity deployment. Mgmt. expects Small-molecule D&M revenue to grow over 50% YoY in 2026. TIDES revenue rose 51.6% YoY, accelerating from 44.3% in 1H26 and leading mgmt. to guide up TIDES growth to ~47% in 2026. The segment added eight Phase III or commercial projects in 3Q26, bringing 9M26 additions to 23, the highest in Company’s history. The start of the new Changzhou site underscores mgmt's confidence in sustained demand. Overall, WXAT now has 20 plants for small molecules and peptide projects at various stages of design preparation, construction or launch readiness.

 Broad-based acceleration of early-stage services. WuXi Testing's 3Q26 revenue grew 32.7% YoY, versus 31.5% in 1H26, underpinned by robust safety-assessment revenue growth of 40.6% in 9M26. WuXi Biology revenue rose 14.4% YoY in 3Q26, improving from 11.2% in 1H26. Small-molecule drug discovery within Chemistry grew 16.8% YoY, sharply above 1H26's 5.6% YoY. Together, these trends indicate improving early-stage R&D demand, with AIDD customers and new modalities providing incremental opportunities for WXAT as global biotech funding continues to recover.

 Normal volatility of quarterly margins. Although 3Q26 GPM and NPM declined sequentially from 2Q26, 9M26 GPM/ adj. NPM still expanded 7.6ppt/ 8.3ppt YoY, respectively. Quarterly fluctuations are normal in our view, given the project mix, delivery schedules of key projects, new-capacity ramp-up and FX movements. Mgmt. aims to share part of its efficiency gains with customers and employees rather than maximizing near-term margins. We therefore view the sequential margin moderation in 3Q26 as normal quarterly volatility, with profitability remaining resilient.

 Maintain BUY. To factor in the strong momentum of Chemistry segment, we raise our earnings forecasts, expecting revenue 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. Hence, we raise our DCF-based TP from RMB170.00 to RMB190.00 (WACC: 9.39%, terminal growth: 2.00%; both unchanged).

Earnings Summary

(YE 31 Dec) FY24A FY25A FY26E FY27E FY28E Revenue (RMB mn) 39,241 45,456 61,395 72,864 84,334

YoY growth (%) (2.7) 15.8 35.1 18.7 15.7 Adjusted net profit (RMB mn) 10,583 14,957 25,185 29,907 34,209

YoY growth (%) (2.5) 41.3 68.4 18.8 14.4 EPS (Adjusted) (RMB) 3.67 5.23 8.64 9.85 11.27 Consensus EPS (RMB) na na 7.78 9.16 10.69 P/E (Adjusted) (x) 38.6 27.0 17.0 14.4 12.6 Source: Company data, Bloomberg, CMBIGM estimates

Target Price RMB190.00

(Previous TP RMB170.00)

Up/Downside 34.3% Current Price RMB141.48

China Healthcare Jill WU, CFA

(852) 3900 0842 jillwu@cmbi.com.hk

Benchen HUANG, CFA huangbenchen@cmbi.com.hk

Stock Data

Mkt Cap (RMB mn) 429,378.2 Avg 3 mths t/o (RMB mn) 7,520.0 52w High/Low (RMB) 167.96/87.62 Total Issued Shares (mn) 3034.9

Source: FactSet

Shareholding Structure

HK investors 28.5% Ge Li and concerted parties 16.1%

Source: Company report

Share Performance

Absolute Relative 1-mth -12.9% -7.1% 3-mth 13.5% 20.0% 6-mth 40.7% 57.6%

Source: FactSet

12-mth Price Performance

Source: FactSet

PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk

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Figure 1: Earnings revision

Source: Company data, CMBIGM estimates

Figure 2: CMBIGM estimates vs consensus

Source: Bloomberg, CMBIGM estimates

Figure 3: Risk-adjusted DCF valuation DCF Valuation (in RMB mn) 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E

EBIT 32,209 34,583 39,322 44,451 49,806 55,307 60,862 66,367 71,706 76,758 Tax rate 17.69% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% EBIT*(1-tax rate) 26,511 29,395 33,424 37,784 42,335 47,011 51,733 56,412 60,950 65,244 + D&A 3,040 3,707 4,285 4,799 5,327 5,860 6,387 6,898 7,381 7,824

• - Change in working capital -2,011 -2,488 -2,563 -2,870 -3,186 -3,505 -3,820 -4,126 -4,414 -4,679
• - Capex -18,250 -9,000 -8,000 -8,000 -8,000 -8,000 -8,000 -8,000 -8,000 -8,000

FCFF 9,291 21,615 27,146 31,713 36,476 41,366 46,300 51,185 55,917 60,389 Terminal value 834,081

Terminal growth rate 2.00% WACC 9.39% Cost of Equity 11.95% Cost of Debt 4.00% Equity Beta 0.90 Risk Free Rate 3.00% Market Risk Premium 10.00% Target Debt to Asset ratio 30.00% Effective Corporate Tax Rate 15.00%

PV of terminal value (RMB mn) 340,119 Total PV (RMB mn) 556,262 Net debt (RMB mn) -20,366 Equity value (RMB mn) 576,629 # of shares (mn) 3,035 Price per share (RMB per share) 190.00 Source: CMBIGM estimates

Figure 4: Sensitivity analysis of DCF model (RMB)

Source: CMBIGM estimates

Risks:

1) Uncertainties in the recovery trend of global biotech funding and demand from biotech clients; 2) uncertainties in the demand trend of global mid- and large-size pharmaceutical companies amid the challenging macro and geopolitical environment; 3) slower-thanexpected delivery of PhIII and commercial projects, leading to slower revenue growth in the future; 4) failure in obtaining key projects due to various factors, such as the lack of necessary technologies and customers’ concerns about geopolitical uncertainties.

Financial Summary

INCOME STATEMENT 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Revenue 40,341 39,241 45,456 61,395 72,864 84,334 Cost of goods sold (23,729) (22,965) (23,801) (27,677) (33,475) (40,062) Gross profit 16,612 16,277 21,655 33,718 39,389 44,272 Operating expenses (5,318) (5,164) (4,949) (5,946) (6,006) (6,150) Selling expense (701) (745) (807) (863) (878) (932) Admin expense (2,879) (2,879) (2,661) (3,329) (3,338) (3,357) R&D expense (1,441) (1,239) (1,119) (1,253) (1,268) (1,299) Others (297) (301) (361) (501) (522) (562) Operating profit 11,294 11,112 16,706 27,772 33,383 38,122 Gain/loss on financial assets at FVTPL (38) 187 (137) 284 200 200 Investment gain/loss 234 604 8,588 4,228 600 600 Net Interest income/(expense) 338 787 (398) (56) 486 618 Other income/expense 4 (1,150) (853) (75) 400 400 Pre-tax profit 11,832 11,540 23,906 32,153 35,069 39,939 Income tax (2,132) (1,972) (4,573) (5,688) (5,260) (5,991) After tax profit 9,700 9,568 19,333 26,465 29,809 33,949 Minority interest (94) (117) (182) (79) (89) (101) Net profit 9,607 9,450 19,151 26,386 29,719 33,847 Adjusted net profit 10,854 10,583 14,957 25,185 29,907 34,209 Gross dividends 2,882 2,835 6,755 7,916 8,916 10,154

BALANCE SHEET 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Current assets 30,422 38,690 61,677 66,560 81,549 103,130 Cash & equivalents 13,764 18,322 35,131 37,571 48,873 66,530 Account receivables 7,922 8,044 7,281 10,350 12,283 14,217 Inventories 4,736 5,400 8,993 8,368 10,121 12,113 Prepayment 244 226 247 247 247 247 Financial assets at FVTPL 11 1,234 5,806 5,806 5,806 5,806 Other current assets 3,746 5,464 4,218 4,218 4,218 4,218 Non-current assets 43,247 41,636 41,444 60,987 67,090 71,666 PP&E 17,190 18,784 20,000 25,517 31,119 35,143 Deferred income tax 367 473 531 531 531 531 Investment in JVs & assos 2,216 2,326 2,145 2,145 2,145 2,145 Intangibles 1,864 1,575 1,281 1,148 1,016 883 Goodwill 1,821 972 864 864 864 864 Financial assets at FVTPL 8,626 8,943 8,131 22,506 23,306 24,106 Other non-current assets 11,164 8,562 8,492 8,275 8,109 7,992 Total assets 73,669 80,326 103,121 127,548 148,640 174,796

Current liabilities 14,756 16,226 19,235 21,668 23,867 26,229 Short-term borrowings 3,667 1,243 5,986 7,986 8,986 9,986 Account payables 1,645 1,764 2,450 2,882 4,082 5,444 Tax payable 1,374 1,211 2,763 2,763 2,763 2,763 Other current liabilities 8,070 12,008 8,037 8,037 8,037 8,037 Non-current liabilities 3,396 5,014 3,638 10,582 10,582 10,582 Long-term borrowings 687 2,960 1,819 1,819 1,819 1,819 Bond payables 0 0 0 6,944 6,944 6,944 Obligations under finance leases 1,099 547 455 455 455 455 Other non-current liabilities 1,610 1,508 1,364 1,364 1,364 1,364 Total liabilities 18,152 21,240 22,873 32,250 34,450 36,812

Share capital 2,969 2,888 2,984 2,984 2,984 2,984 Capital surplus 28,401 24,338 33,077 51,548 72,351 96,044 Other reserves 23,753 31,407 43,651 40,151 38,151 38,151 Total shareholders equity 55,122 58,633 79,712 94,683 113,486 137,179 Minority interest 395 453 535 615 704 805 Total equity and liabilities 73,669 80,326 103,121 127,548 148,640 174,796

CASH FLOW 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Operating Profit before taxation 11,832 11,540 23,906 32,153 35,069 39,939 Depreciation & amortization 2,288 2,769 3,387 2,903 3,520 4,048 Tax paid (2,132) (1,972) (4,573) (5,688) (5,260) (5,991) Change in working capital (105) (926) (94) (2,011) (2,488) (2,563) Others 1,504 996 (5,423) (4,141) (1,109) (1,241) Net cash from operations 13,387 12,407 17,203 23,217 29,732 34,193

Investing Capital expenditure (5,517) (4,003) (5,538) (8,250) (9,000) (8,000) Acquisition of subsidiaries/ investments (22) 0 0 0 0 0 Net proceeds from disposal of short-term investments

(2,321) (2,013) 132 (10,000) 0 0 Others 299 498 3,461 0 0 0 Net cash from investing (7,561) (5,518) (1,945) (18,250) (9,000) (8,000) Financing Dividend paid (2,756) (3,085) (4,992) (7,972) (8,430) (9,537) Net borrowings 178 3,320 3,563 8,944 1,000 1,000 Proceeds from share issues 247 196 7,046 0 0 0 Others (1,610) (4,264) (4,493) (3,500) (2,000) 0 Net cash from financing (3,941) (3,832) 1,124 (2,527) (9,430) (8,537) Net change in cash Cash at the beginning of the year 7,984 10,001 13,445 35,131 37,571 48,873 Exchange difference 132 388 (370) 0 0 0 Cash at the end of the year 10,001 13,445 29,456 37,571 48,873 66,530

GROWTH 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

Revenue 2.5% (2.7%) 15.8% 35.1% 18.7% 15.7% Gross profit 13.2% (2.0%) 33.0% 55.7% 16.8% 12.4% Operating profit 21.4% (1.6%) 50.3% 66.2% 20.2% 14.2% Net profit 9.0% (1.6%) 102.6% 37.8% 12.6% 13.9% Adj. net profit 15.5% (2.5%) 41.3% 68.4% 18.8% 14.4%

PROFITABILITY 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

Gross profit margin 41.2% 41.5% 47.6% 54.9% 54.1% 52.5% Operating margin 28.0% 28.3% 36.8% 45.2% 45.8% 45.2% Adj. net profit margin 26.9% 27.0% 32.9% 41.0% 41.0% 40.6% Return on equity (ROE) 18.9% 16.6% 27.7% 30.3% 28.6% 27.0%

GEARING/LIQUIDITY/ACTIVITIES 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

Net debt to equity (x) (0.2) (0.2) (0.3) (0.2) (0.3) (0.3) Current ratio (x) 2.1 2.4 3.2 3.1 3.4 3.9 Receivable turnover days 63.2 74.3 61.5 61.5 61.5 61.5 Inventory turnover days 80.0 80.6 110.4 110.4 110.4 110.4 Payable turnover days 75.6 74.6 75.5 75.5 75.5 75.5

VALUATION 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

P/E (diluted) 38.2 38.6 27.0 17.0 14.4 12.6 P/B 7.5 6.9 5.0 4.3 3.8 3.1 P/CFPS 31.0 32.9 23.5 17.8 14.4 12.6 Div yield (%) 0.7 0.7 1.7 1.9 2.1 2.4

Source: Company data, CMBIGM estimates. Note: The calculation of net cash includes financial assets.

Disclosures & Disclaimers

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CMBIGM Ratings

BUY : Stock with potential return of over 15% over next 12 months HOLD : Stock with potential return of +15% to -10% over next 12 months SELL : Stock with potential loss of over 10% over next 12 months NOT RATED : Stock is not rated by CMBIGM

OUTPERFORM : Industry expected to outperform the relevant broad market benchmark over next 12 months MARKET-PERFORM : Industry expected to perform in-line with the relevant broad market benchmark over next 12 months UNDERPERFORM : Industry expected to underperform the relevant broad market benchmark over next 12 months

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