HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Li Ge has begun increasing his holdings, but we’re not sure whether this move is really confident about the prospects of WuXi Bio, or another buy low sell high/capital operation.</li>
<li>The actual situation of WuXi Bio is not necessarily optimistic. Due to geopolitical risks, WuXi Bio has to start striving for more domestic orders. However, price reduction seems inevitable.</li>
<li>Although WuXi Bio released optimistic expectations for 2024 project number/outlook, there may be another announcement of lower-than-expected performance in the future,which would be a devastating blow to investors’ confidence/management's credibility.</li>
</ul>


Li Ge has begun increasing his holdings, but we’re not sure whether this move is really confident about the prospects of WuXi Bio, or another buy low sell high/capital operation.
The actual situation of WuXi Bio is not necessarily optimistic. Due to geopolitical risks, WuXi Bio has to start striving for more domestic orders. However, price reduction seems inevitable.
Although WuXi Bio released optimistic expectations for 2024 project number/outlook, there may be another announcement of lower-than-expected performance in the future,which would be a devastating blow to investors’ confidence/management's credibility.


Wuxi Biologics (2269.HK) - The Latest Updates Related to 2024 Performance Worth the Attention

<ul>
<li>WuXi Bio’s profit was disappointing.The 41 new orders added last December were small orders, which cannot contribute decent revenue/profits.The goal of gross margin to reach 45% by 2026 seems challenging.</li>
<li>The management has become more cautious in its guidance for 2024. 2024H1’s performance could be disappointing. The key is to see whether the performance in 2024 full-year would meet expectations.</li>
<li>Due to BIOSECURE Act, foreign CXOs are planning to seize WuXi Bio’s market share. We are not sure whether Europe (the US’s ally), will follow suit and enact similar legislation.</li>
</ul>


WuXi Bio’s profit was disappointing.The 41 new orders added last December were small orders, which cannot contribute decent revenue/profits.The goal of gross margin to reach 45% by 2026 seems challenging.
The management has become more cautious in its guidance for 2024. 2024H1’s performance could be disappointing. The key is to see whether the performance in 2024 full-year would meet expectations.
Due to BIOSECURE Act, foreign CXOs are planning to seize WuXi Bio’s market share. We are not sure whether Europe (the US’s ally), will follow suit and enact similar legislation.


Wuxi Biologics (2269.HK) - The Crisis Is Not Over

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>WuXi Biologics (Wuxi Bio) reported 2023 revenue of RMB17.03bn, up 11.6% YoY, attributable net income of RMB3.40bn, down 23.1% YoY, and adjusted attributable net income of RMB4.70bn, down 4.6% YoY.</li><li>Both revenue and adjusted attributable net income were in-line with our forecasts.</li><li>If excluding COVID revenue, total revenue would increase by 37.7% YoY, and revenue from late-stage and CMO projects would surge by 101.7% YoY. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

WuXi Biologics (Wuxi Bio) reported 2023 revenue of RMB17.03bn, up 11.6% YoY, attributable net income of RMB3.40bn, down 23.1% YoY, and adjusted attributable net income of RMB4.70bn, down 4.6% YoY.Both revenue and adjusted attributable net income were in-line with our forecasts.If excluding COVID revenue, total revenue would increase by 37.7% YoY, and revenue from late-stage and CMO projects would surge by 101.7% YoY. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

WuXi Biologics (2269 HK) - Expand Overseas Capacity to Mitigate Risks

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Emcure Pharmaceuticals / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/emcure-pharmaceuticals-ltd" target="_blank" data-smartkarma-citation="entities:35585:1" rel="noopener">Emcure Pharmaceuticals</a> is looking to raise around US$240m in its upcoming India IPO.</li>
<li>Emcure Pharmaceuticals (EP) is an Indian Pharmaceutical company engaged in the developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas.</li>
<li>We have looked at the company’s past performance, in our earlier note. In this note, we talk about the RHP updates and take a quick look at valuations.</li>
</ul>



Emcure Pharmaceuticals is looking to raise around US$240m in its upcoming India IPO.
Emcure Pharmaceuticals (EP) is an Indian Pharmaceutical company engaged in the developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas.
We have looked at the company’s past performance, in our earlier note. In this note, we talk about the RHP updates and take a quick look at valuations.


Emcure Pharmaceuticals Pre-IPO - Refiling Updates and Valuations

<ul>
<li>WuXi Bio’s optimism about new orders failed to generated expected surge in its stock price. Many investors raised great doubts about the credibility and professionalism in communication of WuXi Bio.</li>
<li>It’s easy/cost-effective for WuXi Bio to “adjust” order number. However, it’s more difficult to inflate revenue/cash flow. We have to wait for future financial results to know the real situation.</li>
<li>XBI is essentially “a bond”.Recent surge of XBI is driven by the expectations of Fed's rate cut + US soft landing, rather than virtual improvement of external environment.Much remains unclear.  </li>
</ul>


WuXi Bio’s optimism about new orders failed to generated expected surge in its stock price. Many investors raised great doubts about the credibility and professionalism in communication of WuXi Bio.
It’s easy/cost-effective for WuXi Bio to “adjust” order number. However, it’s more difficult to inflate revenue/cash flow. We have to wait for future financial results to know the real situation.
XBI is essentially “a bond”.Recent surge of XBI is driven by the expectations of Fed's rate cut + US soft landing, rather than virtual improvement of external environment.Much remains unclear.  


Wuxi Biologics (2269.HK) - Dramatic Changes in Management Forecasts Fail to Bring Back Confidence

China

WuXi Biologics (Cayman) Inc. is a leading open-access R&D capability and technology platform company serving the pharmaceutical, biotechnology, and medical device industries, with operations in China, U.S., and Iceland.  We provide a broad and integrated portfolio of laboratory and manufacturing services throughout the drug and medical device R&D process.  Our services are designed to help our global partners in shortening the cycle and lowering the cost of drug and medical device R&D through cost-effective and efficient solutions. 

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Wuxi Biologics (2269 HK)