New orders signed in the first four months exceeded the guidance. WuXi Biologics received seven straight days of net inflow of southbound capital

According to Securities Times, WuXi Biologics received seven consecutive days of the net inflow of southbound capital, the accumulative amount being HKD 1.920 bn and the accumulative stock price growth being 28.64%. China Merchants Securities (Hong Kong) maintained its target price of HKD171 and kept the rating of "Buy" based on the discounted cash flow.

WuXi Biologics believed that Shanghai's lockdown had a limited influence on its business mainly based on the following three reasons:

1) Diversified global service network (the production capacity outside Shanghai accounted for approximately 50% of the company's total production capacity).

2) The company was included in the white list of the first batch of key enterprises to resume production in Shanghai. The production department in Shanghai had been working at 100% since the lockdown, and the R&D department also resumed 30-50% of the work.

3) The inventory was sufficient, so the company suffered no material shortage.

Therefore, the company maintained its FY22 revenue/earnings growth guidance of 45%.

WuXi Biologics confirmed that the impact of its previous inclusion in the U.S. unverified list was manageable given that:

1) 47 new integrated projects were added in the first four months, of which 65% came from the customers in the U.S. and EU.

2) Planned capacity expansions were not impacted, and the eight early-stage projects were only affected to a limited extent (about 2% were integrated projects).

3) The company was actively communicating with the Department of Commerce and the U.S. Department of Commerce's Bureau of Industry and Security (BIS) and seeking solutions.

The company emphasized that no customer had yet made a project transfer decision due to the UVL event, and the company continued to receive significant orders from the world.