WuXi AppTec made 19 billion yuan, with 5,836 fewer technical staff, and R&D investment has decreased for three consecutive years.

WuXi AppTec’s Profit Surge Accompanied by Reduction in Technical Staff: Why?

On March 24, WuXi AppTec (603259.SH) opened higher, with a current price of 91.8 yuan per share, up 4.57% at the time of reporting. The previous day, WuXi AppTec disclosed its latest annual report, highlighting growth in its US business, with downstream TIDES (oligonucleotides and peptides) maintaining high growth amid continued industry prosperity. However, the company’s employee count has decreased, and nearly all of the top ten shareholders reduced their holdings in Q4 2025.

Regarding performance, WuXi AppTec achieved revenue of 45.456 billion yuan in 2025, a 15.84% increase year-over-year; net profit attributable to shareholders was 19.151 billion yuan, up 102.65%; and non-recurring net profit was 13.241 billion yuan, up 32.56%. Adjusted operating cash flow for 2025 was 16.67 billion yuan, a 39.1% increase.

In 2025, WuXi AppTec sold its clinical research service businesses, including Shanghai Kantoh Hongyi Medical Clinical Research Co., Ltd.

Excluding the sold businesses, revenue from continuing operations was 43.42 billion yuan.

Since the US biosecurity law incident in 2024, WuXi AppTec’s overseas business has attracted particular attention. 2025 was its first full fiscal year affected by this event. The annual report shows that revenue from US clients in 2025 was 31.25 billion yuan, a 34.3% increase year-over-year, accounting for about 72% of total revenue, up from 64% in 2024.

In terms of revenue contribution, the next largest source was Chinese clients, with revenue of 5.47 billion yuan, a 3.5% decrease, accounting for 13%. European clients contributed 4.82 billion yuan, down 4.0%. Other regions contributed 1.88 billion yuan, up 4.1%.

As of the end of 2025, WuXi AppTec’s ongoing business backlog was 58 billion yuan, a 28.8% increase year-over-year. As of Q3 2025, excluding the Q4 sale of businesses, the backlog was 56.26 billion yuan, up 41.4%. Based on this, year-end orders only slightly increased quarter-over-quarter, with a slowdown in year-over-year growth.

WuXi AppTec’s ongoing business backlog, source: presentation materials disclosed on the company’s official website

In terms of revenue structure, the four main segments contributed: chemical services (36.47 billion yuan), testing services (4.04 billion yuan), biological services (2.68 billion yuan), and others.

2025 Revenue Structure, source: WuXi AppTec 2025 Annual Report

In the largest segment, chemical services, specifically small molecule drug discovery (“R” for Research), the company successfully synthesized and delivered over 420,000 new compounds in 2025. This figure is slightly lower than the data in the third quarter report and last year. The third quarter report indicated over 430,000 compounds synthesized and delivered in the past 12 months, and in 2024, over 460,000 compounds.

Small molecule process development and manufacturing (“D” and “M”) revenue was 19.92 billion yuan, up 11.4%. In 2025, the small molecule D&M pipeline added 839 new molecules, reaching a total of 3,452 molecules by year-end.

The number of new molecules also decreased compared to 2024, which saw 1,187 new molecules added, with a total of 3,377 molecules at the end of 2024.

Benefiting from high demand for downstream GLP-1 drugs, the TIDES (oligonucleotides and peptides) business showed strong growth. As disclosed, with capacity ramp-up throughout 2024, TIDES revenue in 2025 reached 11.37 billion yuan, up 96.0%. As of the end of 2025, TIDES backlog increased by 20.2% year-over-year.

Additionally, WuXi AppTec announced that in September 2025, it completed the capacity expansion for Tiexing peptides. The overall volume of peptide solid-phase synthesis reactors has increased to over 100,000 liters, indicating potential further capacity growth.

The company also provided guidance for 2026, expecting total revenue of 51.3 to 53 billion yuan, with ongoing business revenue growing 18% to 22%. WuXi AppTec plans to focus more on its core CRDMO strategy, accelerate global capacity building, and improve operational efficiency.

Furthermore, the company plans to accelerate global capacity expansion, with capital expenditure expected to reach 6.5 to 7.5 billion yuan in 2026. With business growth and efficiency improvements, adjusted free cash flow is projected to reach 10.5 to 11.5 billion yuan in 2026. In 2025, capital expenditure was 5.54 billion yuan, and adjusted operating cash flow was 16.67 billion yuan.

WuXi AppTec’s recent capital expenditure and cash flow, source: presentation materials disclosed on the company’s official website

While capital expenditure has increased in recent years, the company’s employee count decreased in 2025. As of the end of 2025, WuXi AppTec employed 33,834 staff, down 14% from 39,414 at the end of 2024. By personnel category, aside from an increase of 865 production staff, there were reductions in sales, technical, finance, and administrative staff. Technical personnel decreased by 5,836, nearly 18%, the largest reduction; administrative staff decreased by 565 to 2,126, a 21% decline. The company mentioned that the proportion of R&D personnel decreased due to divestment of some businesses.

WuXi AppTec’s R&D expenses also declined, totaling 1.119 billion yuan in 2025, down 9.61% year-over-year, marking the third consecutive year of decline in R&D spending.

Additionally, major shareholder reductions have long been a concern for investors. The annual report shows that at the end of 2025, eight of the top ten shareholders reduced their holdings compared to Q3 2025, with five being concerted action holders of the actual controllers.

WuXi AppTec’s top ten shareholders’ holdings continued to change as of the end of 2025, source: Tonghuashun iFinD

In terms of dividends, WuXi AppTec plans to distribute a cash dividend of RMB 15.7927 per 10 shares (tax included), totaling RMB 4.712 billion (tax included). Besides annual and interim dividends, the company also completed a special dividend in May 2025, with total cash dividends for 2025 amounting to RMB 6.755 billion. After considering share repurchases, total cash dividends and share cancellations amounted to RMB 8.755 billion, representing 45.72% of net profit attributable to shareholders for the year.

On March 23, during trading, WuXi AppTec’s stock briefly fell over 4%, closing at 87.79 yuan per share, down 3.42%, near its lowest point in nearly half a year at 87.09 yuan per share.