WuXi AppTec Visual China data map.
Before the first trading day of the A-share Year of the Dragon, WuXi AppTec issued two announcements in succession, once again emphasizing that the company has not, is and will not pose a major risk to the United States in the past.
On the afternoon of February 18, Wuxi AppTec New Drug Development Co., Ltd. *** WuXi AppTec, 603259sh；2359.HK) announced that the company noted that a U.S. congressman sent a letter to the U.S. Department of Commerce, the Treasury Department and the Department of Defense on February 12, the content of which was about the company. The Company has always welcomed regulatory oversight of its industry, and has successfully passed U.S.** scrutiny on several occasions in the past, but strongly opposes misleading allegations, inaccurate determinations, and predetermined actions without due process against the Company.
WuXi AppTec said that it firmly believes that WuXi AppTec has not, is and will not pose a major risk to the United States in the past, and will not pose a major risk to the United States, and that the United States will come to the same conclusion even if the United States ** reviews the company again.
On January 26, a draft version of the Biosecurity Act submitted to the U.S. House of Representatives circulated in the market. Since then, WuXi AppTec has repeatedly announced that the company firmly believes that WuXi AppTec's business development will not pose a risk to the security of any country. In another recent announcement on Feb. 18, WuXi AppTec once again emphasized that the company does not have a human genomics business and that its existing businesses do not collect human genome data. The company provides contract-based research, development and manufacturing services to advance new drug discovery and bring life-saving new drugs to patients by empowering the global pharmaceutical and life sciences industries.
The relevant draft in the United States had an impact on the stock price of WuXi AppTec in the secondary market, and on January 26, WuXi AppTec's A-shares crashed intraday and fell to the limit, and H-shares fell by more than 16%. On February 2, WuXi AppTec issued an announcement on the repurchase of part of the cancellation of the ** notice to creditors, as well as a repurchase report on the repurchase of A shares through centralized bidding transactions. According to the announcement, the purpose of the proposed repurchase of shares is to maintain the value of the company and shareholders' rights and interests, and the repurchased shares will be cancelled and the registered capital will be reduced after the completion of the repurchase, and the total amount of funds to repurchase A shares is 1 billion yuan.
After the opening of Hong Kong stocks after the Spring Festival, WuXi AppTec's share price rebounded, and it was reported at 40 on February 168 Hong Kong dollars shares, up 448%。As a 100 billion CXO giant, WuXi AppTec's changes have attracted much attention from the industry. Regarding the impact of the relevant U.S. draft on WuXi AppTec, a number of brokerages pointed out that although there are short-term fluctuations, the actual impact is limited, and they are still optimistic about the company's long-term development.
Shenwan Hongyuan believes that he is optimistic about the long-term development of WuXi AppTec, and short-term fluctuations will not change long-term value. On February 5, 2024, the company repurchased the company's shares for the first time through centralized bidding transactions, and the number of shares repurchased was 20275407 shares, accounting for 069%, with a total amount of RMB 1 billion (excluding transaction costs), and all the repurchased shares will be cancelled. Since 2024, WuXi AppTec has the second largest repurchase amount among all A-share companies, demonstrating the company's confidence in future development.
The Yang Song team of Tianfeng Pharmaceutical pointed out that they are optimistic about the company's industrial and competitive advantages, and the US bill is expected to have a limited substantive impact. The U.S. Industry Association warns the U.S. on behalf of its member companies about the bill: According to BioCentury's February 9 report, the Biotechnology Innovation Organization (BIO) in the U.S. responded to the bill (S3558，h.r.7085) warns the United States that the biotechnology bills recently introduced in the House and Senate, if passed without amendment, will cause serious harm to the U.S. biotechnology industry and the patients who rely on it to develop drugs, and cause incalculable damage to the currently approved and marketed drug development chain** and drugs in development.
According to the research report of China Securities Construction Investment, in recent years, WuXi AppTec's profitability has continued to improve, mainly due to the growth of commercial orders and the efficiency improvement brought about by process optimization. At the same time, business development and efficient operation have brought continuous growth in free cash flow, which provides sufficient protection for the company's subsequent capital expenditure. The company will continue to invest in new production capacity and capacity building, while maintaining a healthy cash flow level, and expects the follow-up operation to remain stable.
Guotai Junan Research Report pointed out that according to the company's announcement, the relevant draft has not yet taken effect and promulgated, and it needs to be further reviewed and may be changed in the future. From the perspective of the global industrial chain, the advantages of local CXO engineer dividends, basic supporting facilities, environmental protection labor costs, rapid response and delivery are still significant, and it is difficult to find high-quality "meal replacements" around the world, and the company has medium and long-term competitive advantages as an industry leader.
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