Goldman Sachs: WuXi Appptec (603259) Buy (on CL) with TP of HK$149.7 / RMB137.3
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Goldman Sachs maintains a Buy rating on WuXi AppTec for both its A-shares (603259.SS) and H-shares (2359.HK), assigning 12-month target prices of RMB 137.3 and HK$149.7, respectively. These targets are based on a 12-month forward P/E multiple of 19x. The firm highlights that WuXi AppTec's product cycle and technological depth in TIDES provide clear revenue visibility beyond 2026.
The analysis forecasts GLP-1-related sales will achieve a 38% compound annual growth rate (CAGR) from 2025 to 2028. However, potential market share erosion, driven by capacity expansions from Eli Lilly and peer CDMOs, may decelerate the 2025-2030 GLP-1 sales CAGR by approximately 3%. Goldman Sachs models WuXi's GLP-1 market share declining from 50% to 40%. Overall continuing operations sales are projected to grow 20% year-over-year in 2026, followed by mid-teens growth in 2027-2028. Non-IFRS net profit is expected to deliver a 16% CAGR from 2025 to 2028.
Despite robust earnings growth translating into stronger cash generation, WuXi AppTec currently trades at a significant discount to global peers. The A-shares and H-shares trade at 2026 P/E multiples of 17.2x and 14.1x, respectively, compared to 53.2x for Samsung Biologics and 29.0x for Lonza. This valuation discount reflects ongoing geopolitical uncertainties and potential AI disruption risks. Key downside risks include GLP-1 concentration, pricing pressures, and slower-than-expected new business ramp-ups.