FAST NEWS: WuXi AppTec’s Operating Profit Doubles in First Quarter

The latest: Pharmaceutical services outsourcing company WuXi AppTec Co. Ltd. (2359.HK; 603259.SH) forecast it will post a net profit of about 1.64 billion yuan ($258 million) in the first quarter, up about 9.54% from the same period in 2021, according to an announcement on Sunday.

Looking up: The company said it avoided major Covid disruptions during the quarter by activating its business continuity plan in a timely manner to ensure stable production and operations, enabling it to maintain timely delivery of orders. As a result, its first-quarter net profit, excluding non-recurring losses, surged 106.5% to 1.71 billion yuan.

Take Note: While its non-recurring loss items in this year’s first quarter were lower than the same period a year earlier, they still totaled 179 million yuan in the first three months of 2022.

Digging Deeper: Founded in December 2000, WuXi AppTec is a pharmaceutical outsourcing services provider in China, covering the entire industry chain from drug discovery to commercialization. The company has grown rapidly on big demand from both foreign and domestic drug developers for outsourced R&D and manufacturing services for their activity in the fast-growing China market. Capitalizing on that demand, WuXi AppTec is expected to post a 71.2% jump in revenue to 8.47 billion yuan in this year’s first quarter, beating its own previous estimate of 65% to 68% growth given last month. The company has now recorded revenue growth for eight consecutive quarters.

Market Reaction: WuXi AppTec shares opened slightly higher on Monday, but then moved down as much as 4.4% before closing down by a milder 1.9% at HK$117 at the midday break. The stock has moved downward since last July and currently trades in the lower-to-middle end of its 52-week range.

Translation by Jony Ho

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