US Market Booming! Wuxi AppTec's 2025 Net Income Attributable to Parent Soars 105.2%, Expected 2026 Revenue Growth of 18%–22% | Earnings Insights

WuXi AppTec Continues High Growth Under the “CRDMO Integration” Model

The financial report released on Monday shows that WuXi AppTec achieved revenue of 45.46 billion RMB in 2025, a year-over-year increase of 15.8%. Excluding businesses classified as discontinued operations, recurring business revenue was 43.42 billion RMB, with an even higher YoY growth rate of 21.4%.

Profitability improvements are even more significant. The company’s gross profit for the year was 21.38 billion RMB, up 33.5%, with gross margin rising to 47.0%, an increase of 6.2 percentage points YoY. Net profit attributable to shareholders was 19.19 billion RMB, more than doubling by 105.2%. Net profit margin reached 42.2%. On an adjusted (non-IFRS) basis, net profit was 14.96 billion RMB, up 41.3%, with a net margin of 32.9%, indicating that core operational recovery and one-time gains jointly boosted the financial performance.

Order visibility remains strong: as of the end of 2025, the company’s backlog of ongoing business orders was 58 billion RMB, up 28.8% YoY. Regionally, the US market contributed 31.25 billion RMB, a 34.3% increase, becoming the main growth driver.

The company plans to pay a final dividend of 15.7927 RMB per 10 shares (tax included), totaling approximately 4.712 billion RMB. Management also provided guidance for 2026 revenue of 51.3–53.0 billion RMB, with continued business revenue expected to grow 18%–22% YoY.

Revenue Breakdown: Faster Growth in Recurring Business, Chemical Operations as Main Driver

From the financial structure, the distinction between “ongoing operations” and “discontinued operations” in 2025 is clear: revenue from discontinued operations was 2.035 billion RMB, down 41.4%, while recurring business revenue reached 43.42 billion RMB, up 21.4%, forming the core of the group’s overall growth.

Segment-wise (according to report divisions):

• Chemistry Business (WuXi Chemistry): 36.47 billion RMB, +25.5%, representing the largest portion of the group’s revenue.
• Testing Business (WuXi Testing): 4.04 billion RMB, +4.7%, recovering from fluctuations to positive growth.
• Biology Business (WuXi Biology): 2.68 billion RMB, +5.2%.
• Other Businesses: 236 million RMB, down 23.8%.

In terms of incremental growth, the chemical pharmaceutical business nearly single-handedly supported the expansion; testing and biologics mainly reflect recovery growth, with scale and resilience weaker compared to chemistry.

Regional and Order Insights: US Customers Drive Growth

In 2025, the regional distribution of ongoing business revenue shows an “imbalance”:

• US customers: 31.25 billion RMB, +34.3%
• Europe customers: 4.82 billion RMB, -4.0%
• China customers: 5.47 billion RMB, -3.5%
• Other regions: 1.88 billion RMB, +4.1%

Against this backdrop, the company’s backlog increased 28.8% YoY to 58 billion RMB, indicating that delivery pace and capacity utilization will continue to influence revenue realization in 2026. For investors, this structure suggests two points: first, short-term growth heavily depends on the US market’s health and project progress; second, recovery in Europe and China will impact the breadth and volatility of growth.

Chemical Business: Steady Small Molecule D&M, TIDES Nearly Doubling as Second Growth Curve

Growth in the chemical business is driven by a combination of “R&D pipeline inflow + D&M volume increase + TIDES acceleration.”

1. Continuous R&D pipeline inflow supports steady CRDMO growth
   The company disclosed that in 2025, over 420,000 new compounds were synthesized and delivered for clients; 310 molecules transitioned from R&D to D&M. For the CRDMO model, R&D conversion efficiency determines the robustness of the clinical project pipeline.

2. Small molecule D&M remains strong, pipeline and late-stage projects increase
   In 2025, small molecule D&M revenue was 19.92 billion RMB, up 11.4%. The company added 839 new molecules during the year, ending with a total pipeline of 3,452 small molecules, including:

• 83 commercialized projects
• 91 Phase III clinical projects
• 377 Phase II clinical projects
• 2,901 preclinical and Phase I projects

3. Capacity and compliance: multiple sites achieve “zero defect” FDA inspections; expansion of reaction vessel capacity
   Changzhou, Taixing, and Jinshan API sites all passed FDA inspections with zero defects. By the end of 2025, the total volume of small molecule API reactors exceeded 4,000 kL. In a stage where global clients prioritize supply chain stability and compliance certainty, such information often has more order conversion significance than just expansion plans.

4. TIDES continues rapid expansion, revenue up 96% YoY
   In 2025, TIDES revenue reached 11.37 billion RMB, nearly doubling (+96%), driving a 20.2% increase in backlog orders. The company disclosed that TIDES D&M customer count increased 25%, and the number of molecules served increased 45%. Additionally, in September 2025, the Taixing peptide capacity was expanded ahead of schedule, with solid-phase peptide synthesis reactors exceeding 100,000L in total volume.

From the financial language, TIDES has shifted from “capacity ramp-up to realize revenue” to “capacity expansion driving project and customer penetration,” strengthening growth in the chemical segment.

Testing and Biologics: Revenue Recovery but Gross Margin Declines, Price Pressure Evident

Both testing and biologics segments recovered to single-digit growth in 2025, but profit margins declined simultaneously:

• Testing: 4.04 billion RMB, +4.7%; gross profit 1.176 billion RMB, -14.1%, gross margin down to 29.1% (a decrease of 6.4 percentage points). The company explained this as “market impact and price factors gradually reflected in order conversion.”
• Biologics: 2.68 billion RMB, +5.2%; gross profit 923 million RMB, -3.4%, gross margin down to 34.5% (a decrease of 3.1 percentage points), also indicating pricing pressure.

Notably, both segments mentioned that “new molecule business revenue accounted for over 30%” and maintained advantages in nucleic acids, peptides, conjugates, and bispecific antibodies; they also improved efficiency in automation and software tools (e.g., an 83% increase in drug property evaluation spectral analysis). However, from the financial results, efficiency gains have not yet fully offset the downward price trend—key variables moving forward include whether high-tech barrier projects can further increase their proportion and whether price competition will intensify in 2026.

Gross Margin Surges to 47%: Project Structure Optimization and Capacity Efficiency as Main Drivers

In 2025, the company’s overall gross margin rose to 47.0%, up 6.2 percentage points YoY. The main reason is the increased proportion of late-stage and commercial projects, leading to better capacity utilization, labor efficiency, and operational effectiveness.

Segment-wise, the gross margin improvement is primarily driven by the chemistry business:

• Chemistry gross margin: 51.2%, +5.5 percentage points (gross profit up 40.7%)
• Testing gross margin: 29.1%, -6.4 percentage points
• Biologics gross margin: 34.5%, -3.1 percentage points

In other words, the overall gross margin increase is mainly due to the scale expansion, process optimization, and project structure improvements in the chemistry segment, rather than uniform improvement across all business lines. The focus for 2026 will be whether continued expansion of late-stage and commercial projects can offset pricing pressures in testing and biologics.

Final Dividend Proposal: About 4.7 Billion RMB

In terms of shareholder returns, the board recommends a final dividend of 15.7927 RMB per 10 shares (tax included), totaling approximately 4.712 billion RMB based on the issued share capital as of the announcement date. Coupled with free cash flow of 10.89 billion RMB for the year, this dividend payout has a certain safety margin in cash flow coverage. However, given the company’s ongoing capacity investments and global expansion, future dividend and capital expenditure balance remains a key concern.

2026 Guidance: Revenue of 51.3–53.0 Billion RMB, Key Variables Are Order Conversion, Pricing, and External Environment

The company projects total revenue of 51.3–53.0 billion RMB in 2026, with ongoing business revenue expected to grow 18%–22% YoY. The outlook is based on existing backlog and assumes stability in the global pharmaceutical industry, international trade environment, and regulatory conditions in key operational regions, with inherent uncertainties.

Operationally, the key variables for 2026 include:

1. Conversion efficiency of backlog into revenue (especially for late-stage/ commercialized small molecules and TIDES volume growth);

2. Whether pricing pressures in testing and biologics ease, and if the increasing proportion of “new high-barrier molecules” can stabilize gross margins;

3. The impact of exchange rates, regulatory changes, and international trade on cross-region delivery and customer budgets—2025’s widening foreign exchange losses already highlight external factors’ potential to amplify profit fluctuations.

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