Goldman Sachs slightly lowered the target price for WUXI XDC to 85.9 yuan, with this year's guidance in line with expectations

Goldman Sachs published a research report indicating that WuXi XDC (02268.HK) performed roughly in line with its earlier profit warning announcement in the second half of last year, with revenue increasing by 35.9% year-on-year and net profit rising by 26.4% to RMB 735 million (the same below). During the same period, adjusted net profit grew by 55% year-on-year to RMB 811 million, with the adjusted net profit margin expanding from 22% to 25%, benefiting from operational leverage and efficiency improvements.

Management's guidance for this year meets expectations, with revenue projected to grow by approximately 35% in 2026 based on fixed exchange rates and comparable benchmarks (including BioDlink CDMO business for two years); under the pro forma benchmark (assuming the BioDlink acquisition is completed by the end of March, compared to WuXi XDC's standalone business in 2025), the growth is expected to be 40%. At the same time, management expects gross margins to remain relatively stable, with domestic gross margins expected to improve further.

The firm raised its adjusted net profit forecasts for WuXi XDC for 2026 to 2028 by 1.8%, 1.4%, and lowered it by 0.1%, respectively, to reflect the commissioning of the Singapore plant, although this is partially offset by the majority of depreciation and amortization costs being recognized in 2027; it maintains a "Buy" rating with a target price slightly reduced from HKD 87.1 to HKD 85.9