Jinwu Financial News | Citi's Research Reports indicate that WUXI APPTEC (02359) is selling its ATU Business (cell and gene therapy CDMO services) to Altaris, a move expected to alleviate concerns in the USA regarding the company's gene business. Citi believes that, considering the limited time for voting on the Biosecure Act in the Senate during the Biden administration, geopolitical risks are expected to decrease by 2025.
Citi believes that as Global pharmaceutical R&D investment continues to grow, the demand for pharmaceutical outsourcing services will remain strong. Particularly in the field of cell and gene therapy, as technologies mature and therapeutic applications expand, outsourcing service providers will encounter more market opportunities.
The bank stated that in 2023, WUXI APPTEC's ATU Business revenue was 0.98 billion yuan (unaudited), accounting for approximately 2.4% of the company's revenue that year. Considering the sale of the ATU business, Citi has adjusted its revenue forecast for WUXI APPTEC while maintaining a 'Buy' rating; based on the expected growth trends in China's CRO/CDMO Industry, as well as revenue and profit forecasts for the company across different Sector such as chemistry, testing, biology, and DDSU, Citi sets a Target Price of HKD 74.00 for WUXI APPTEC's Listed in Hong Kong, anticipating a potential upside of 33.0% in the stock price.
