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

How does WuXi AppTec’s CRDMO model achieve double the net profit?

WuXi AppTec continues to experience high growth driven by the “CRDMO integration” model.

The financial report released on Monday shows that WuXi AppTec aims for revenue of 45.46 billion RMB in 2025, a 15.8% increase year-over-year; excluding businesses classified as discontinued operations, recurring revenue is 43.42 billion RMB, with an accelerated growth rate of 21.4%.

Profitability improvements are even more significant. The company’s gross profit for the year is 21.38 billion RMB, up 33.5%, with gross margin rising to 47.0%, an increase of 6.2 percentage points year-over-year; net profit attributable to shareholders is 19.19 billion RMB, doubling by 105.2%, with a net profit margin of 42.2%. When measured on an adjusted (non-IFRS) basis, net profit attributable to shareholders is 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 is also strong: as of the end of 2025, the company’s backlog of ongoing business orders is 58.0 billion RMB, up 28.8%. Regionally, the US market contributed 31.25 billion RMB, a 34.3% increase, becoming the main source of growth.

The company plans to distribute a final dividend of 15.7927 RMB per 10 shares (tax included), totaling approximately 4.712 billion RMB. Management also provided a revenue guidance of 51.3–53.0 billion RMB for 2026, with an expected year-over-year growth of 18%–22% for ongoing business revenue.

Revenue Breakdown: Faster growth in ongoing operations, chemical business as main engine

From the financial structure, the differentiation between “ongoing” and “discontinued” operations in 2025 is clear: revenue from discontinued operations is 2.035 billion RMB, down 41.4%, while ongoing operations reach 43.42 billion RMB, up 21.4%, serving as the core driver of overall group growth.

By business segment (according to report divisions):

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

From a “growth contribution” perspective, the chemical pharmaceutical business nearly single-handedly drives growth; testing and biologics mainly show recovery-type growth, with scale and resilience weaker than chemical operations.

Regional and Order Insights: US clients drive strong growth

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

• US clients: 31.25 billion RMB, +34.3%
• European clients: 4.82 billion RMB, -4.0%
• Chinese clients: 5.47 billion RMB, -3.5%
• Other regions: 1.88 billion RMB, +4.1%

Against this backdrop, the company’s backlog of orders increased 28.8% to 58.0 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 relies more on the US market and project progress; second, recovery in Europe and China will impact the breadth and volatility of growth.

Chemical Business: Solid small-molecule D&M, TIDES nearly doubled to become second growth driver

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

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

2. Small-molecule D&M remains robust, 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, with a total pipeline of 3,452 small molecules at year-end, 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 phase where global clients prioritize supply chain stability and compliance certainty, such information often has more order conversion significance than 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 clients increased by 25%, molecules served increased by 45%; additionally, in September 2025, Taixing peptide capacity was expanded early, 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 pressures reflected in financials

Both testing and biologics segments recovered 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 6.4 percentage point decrease). 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 3.1 percentage point decrease), also indicating pricing pressure.

Notably, both segments mentioned that “new molecule revenue share increased to over 30%,” maintaining 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 financial results, efficiency gains have not fully offset the downward pricing trend in the short term—key variables moving forward include whether high-tech barrier projects can further increase their share and whether price competition will intensify in 2026.

Gross margin jumps to 47%: mainly due to project structure optimization and capacity efficiency improvements

In 2025, the company’s overall gross margin rose to 47.0%, a 6.2 percentage point increase year-over-year, primarily driven by a higher proportion of late-stage and commercial projects, leading to better capacity utilization, labor efficiency, and operational effectiveness.

Segment-wise, the gross margin improvement mainly stems from the chemical business:

• Chemical gross margin: 51.2%, up 5.5 percentage points (gross profit up 40.7%)
• Testing gross margin: 29.1%, down 6.4 percentage points
• Biologics gross margin: 34.5%, down 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 chemical segment, rather than uniform improvement across all business lines. For 2026, the focus will be on 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) for 2025, totaling approximately 4.712 billion RMB based on the issued share capital at the announcement date. Coupled with free cash flow of 10.89 billion RMB for the year, this dividend payout is supported by solid 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 Outlook: Revenue of 513–530 billion RMB, dependent on order conversion, pricing, and external factors

The company projects total revenue of 513–530 billion RMB in 2026, with ongoing business revenue expected to grow 18%–22% year-over-year. This outlook is based on existing order backlog and assumes stability in the global pharmaceutical industry, international trade environment, and regulatory conditions in key markets, with inherent uncertainties.

Operationally, the key variables for 2026 include:

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

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

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