Adx Biotech: 2025 Profits Slightly Exceed Preliminary Guidance
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UBS reviewed Adx Biotech's 2025 financial results, noting that net profit reached RMB 361 million, representing a 42% year-over-year increase and slightly surpassing the preliminary guidance of RMB 358 million. This earnings beat was primarily driven by effective cost optimization across selling and R&D expenses, rather than top-line expansion. Total revenue grew by a modest 8% to RMB 1.198 billion. Although the gross margin contracted by 2.2 percentage points to 82.6%, the net profit margin surged from 23.0% to 30.2%.
Disaggregating the business, testing reagent revenue, which accounts for roughly 80% of total revenue, grew 8.6% to RMB 952 million. Testing service revenue increased 16%, while drug clinical research service revenue declined 1.71%. Gross margins across all segments experienced contractions between 0.4 and 9.0 percentage points. The company achieved significant strategic milestones, securing China's first companion diagnostic approval for prostate cancer (BRCA1/2) and a label expansion for its PCR-11 panel. Furthermore, Adx Biotech invested RMB 50 million in sequencer manufacturer Sailu Medical, marking a strategic entry into the NGS market. UBS maintained a Buy rating with an unchanged target price of RMB 29.00 based on a three-stage DCF valuation.