FAST NEWS: WuXi AppTec Posts 73% Increase in Earnings, Benefiting from Higher Revenue

The latest: Pharmaceutical services outsourcing company WuXi AppTec Co. Ltd. (2359.HK; 603259.SH) announced Friday its net profit for the first half of 2022 was approximately 4.64 billion yuan ($690 million), representing a year-over-year increase of 73%, mainly due to revenue growth and improved operational management efficiency.

Looking up: The company expects first-half revenue of approximately 17.76 billion yuan, a year-over-year increase of nearly 69%, outperforming its early June forecast of 63% to 65% growth.

Take Note: The company’s investments generated fair value changes in and investment income of 448 million yuan during the period, a 78% decrease from 2.049 billion yuan in the same period last year.

Digging Deeper: Founded in December 2000, WuXi AppTec is a Chinese pharmaceutical outsourcing services provider covering the entire industry chain from drug discovery to commercialization. The company’s business 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, as well as global innovative drug companies keen to explore Covid-19 drugs. All that has underpinned the company’s revenue growth for nine consecutive quarters.

Market Reaction: WuXi AppTec’s A-shares and H-shares opened lower on Monday, with its A-shares closing down 2.9% at 104.84 yuan, and its H-shares also falling 2.9% to HK$74.80 at the midday break, close to their 52-week lows.

Translation by Jony Ho

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