WuXi AppTec (WXAP) held its 2026 Investor Day on 6 Nov. Mgmt. indicated its CRDMO business model will continue to generate a robust pipeline of high-quality projects, supporting the sustainable growth of its Chemistry segment and the Company overall. Mgmt. also highlighted opportunities in the rising AIDD trend, reinforcing Biology segment as a core gateway to its downstream businesses.

CRDMO model continuing to generate a robust pipeline of highpotential projects. Leveraging the world’s largest early-stage drug R&D platform, WXAP is deeply embedded in the frontier of global innovative drug R&D and has used its large-scale manufacturing capacity to support the production of several global blockbuster drugs. It manufactured seven of the top 10 best-selling chemically-synthetized drugs globally in 2025, driving the Company’s near-term growth. At the same time, it participated in seven of 10 2025 Molecules of the Year nominees, laying a solid foundation for sustained access to commercially attractive molecules. Specifically, WXAP manufactures three of the nine globally approved GLP-1 molecules, as well as three of the seven approved molecules in the KRAS space. Its scale in early-stage drug R&D allows a broad participation in global innovative drug programs and provides valuable industry insights. Such visibility supports proactive capacity planning and enables WXAP to capture opportunities as they arise, particularly in more complex modalities such as peptides, cyclic peptides and molecular glues. Mgmt. is confident that its CRDMO model will continue to produce a robust and promising pipeline, enabling WXAP to rapidly ramp up new capacity to convert bookings into revenue and profit.

AIDD to widen R&D funnel and create incremental business for CRDMO model. Mgmt. believes AI-driven drug discovery (AIDD) can expand drug discovery demand and project funnel. For instance, one leading AIDD company requires DMPK assay throughput up to 50 times that of a traditional biotech. AI is expected to generate deeper biological insights, accelerate new program launches, and enable more new modalities, thereby bringing new deal flow into early research. AI-native customers need both data to optimize models and execution to advance pipelines. WXAP can meet the demand of such customers with an established capability of a wet-dry closed loop. Because all drug R&D development remains subject to current regulatory standards, WXAP can also capture translation needs from in vitro to in vivo and from discovery through development down the road. Although AIDDrelated business currently represents a small share of revenue, demand from AIDD is growing rapidly, per mgmt. Mgmt. indicated that flexible delivery and rapid scale-up capabilities should translate this technological trend into future orders and pipeline growth, further reinforcing Biology segment as a core gateway to the Company’s downstream businesses.

Maintain BUY. We maintain our DCF-based TP at RMB190.00 (WACC: 9.39%, terminal growth: 2.00%; both unchanged). We expect WXAP’s revenue to grow by 35.1%/ 18.7%/ 15.7% YoY (for continuing operations: 41.4%/ 18.7%/ 15.7% YoY) and adj. net profit to grow by 68.4%/ 18.8%/ 14.4% YoY in 2026E/ 27E/ 28E, respectively.

Risks:

1) Uncertainties in the recovery trend of global biotech funding and demand from biotech clients; 2) uncertainties in the demand trend of global mid- and large-size pharmaceutical companies amid the challenging macro and geopolitical environment; 3) slower-thanexpected delivery of PhIII and commercial projects, leading to slower revenue growth in the future; 4) failure in obtaining key projects due to various factors, such as the lack of necessary technologies and customers’ concerns about geopolitical uncertainties.