UBS: Raises WuXi AppTec's target price to HK$164 and maintains a "buy" rating.

UBS released a research report stating that it has raised the target price of WuXi AppTec (02359) by 6.4%, from 154.1 Hong Kong dollars to 164 Hong Kong dollars, while maintaining a "buy" rating. UBS has adjusted its models based on WuXi AppTec's performance in the first quarter of 2026, raising revenue and profit margin expectations, and increasing earnings per share forecasts for the years 2026-2028 by 10-11%. The bank pointed out that WuXi AppTec's first quarter revenue increased by 28.8% to 12.4 billion yuan, exceeding the bank's expectation of 11.2 billion yuan and the market's general expectation of 10.8 billion yuan. The performance of the company's core operating business was strong, with a year-on-year increase of 39.4%. Adjusted net profit increased by 71.6% year-on-year to 4.6 billion yuan. In terms of profit margin, the adjusted gross margin increased by 8.5 percentage points to 50.4% year-on-year, and the adjusted net margin increased by 9.2 percentage points to 37%. The company reiterated its full-year guidance for 2026, with core operating business expected to grow by 18-22% year-on-year; total revenue of 51.3-53.0 billion yuan, an increase of 12.9-16.6% year-on-year; and capital expenditure of 6.5-7.5 billion yuan. Management is confident in achieving these targets and actively seeking opportunities to upgrade performance. Expectations for the company's TIDES business revenue growth in 2026 have been raised to around 40% (previously expected to be over 30%), in line with the bank's expectations.