Nomura: WuXi XDC's performance in the second half of 2025 may fall short of expectations

Nomura published a report, expecting WuXi XDC (02268.HK) to underperform expectations in the second half of 2025. The company issued a profit warning, anticipating that revenue, gross profit, adjusted net profit, and net profit attributable to shareholders for the fiscal year 2025 will grow by more than 45%, 70%, 45%, and 38% year-on-year, respectively. The firm has given it a "Buy" rating with a target price of HKD 82.72.

The firm estimates that the company's sales revenue in the second half of 2025 will grow by 33% year-on-year to RMB 3.18 billion, lower than the market expectation of RMB 3.33 billion and the firm's previous estimate of RMB 3.48 billion. Gross profit is expected to reach RMB 1.13 billion, indicating a year-on-year increase in gross margin of 6.2 percentage points to 35.7%. Management attributes this to product structure optimization and strengthened cost control, with net profit attributable to shareholders and adjusted net profit expected to grow by 26% (dragged down by foreign exchange impacts) and 25% year-on-year, reaching RMB 730 million (significantly lower than the firm's and market expectations) and RMB 801 million, respectively