UBS: Give WuXi Biologics (02269) a "Buy" rating with a price target of HK$142

Zhitong Finance APP learned that,UBSPublished a study report stating thatWuXi Biologics(02269) with a "Buy" rating and a target price of HK$142, raised its 2021-23 earnings per share forecast by 26% to 38% to reflect stronger-than-expected pandemic and CMO-related projects, and raised its 2020-24 revenue forecast by 11% to reflect stronger-than-expected growth in COVID-19 projects and pharmaceutical manufacturing outsourcing (CMO) growth.

According to the report, according to the management, there will be at least four to five non-COVID-19-related CMOs before the end of 2022, which is estimated to drive the company's long-term profit growth. The management will maintain the 2021 guidance, and it is expected that the revenue and net profit will increase by 65% year-on-year. The bank believes that if the growth is not affected by supply shortage, the company is expected to outperform the guidance.

According to the bank, according to the management, there is no evidence that the U.S. government will restrict U.S. companies from using CDMO companies based in China. At the same time, 20% of WuXi customers have considered using the company's production capacity in Europe and the United States to reduce risks. Considering the nature of the company's CDMO services, if drugs are produced in Europe and the United States and shipped there, they will not be regarded as exported from China to the United States, which is believed to reduce the risk of unstable drug supply.