WuXi AppTec's Shares Fall After Downbeat Guidance
By Sherry Qin
WuXi AppTec's shares fell after the Chinese biotechnology company issued a downbeat revenue outlook amid concerns about potential U.S. sanctions.
Hong Kong-listed shares dropped 6.7% to 39.90 Hong Kong dollars (US$5.10) after losing as much as 9.9% on Tuesday morning. Shanghai-listed shares shed 4.0%.
Shares listed in Hong Kong and Shanghai have lost 50% and 30%, respectively, since the beginning of this year.
After reporting in-line 2023 results, WuXi AppTec's management guided for 2024 revenue to reach 38.3 billion yuan ($5.32 billion) to CNY40.5 billion, compared with actual revenue of CNY40.34 billion in 2023.
Concerns about potential sanctions by the U.S. remain an overhang for WuXi AppTec and its affiliates. WuXi AppTec generated 65% of its 2023 sales from the U.S.--sales that could be put in jeopardy by potential bans as two U.S. bills targeting Chinese biotech companies make their way through Congress.
The guidance is "significantly lower" than consensus estimates, Citi analysts led by John Yung said in a research note.
Nomura slashed its target price for WuXi AppTec's mainland and Hong Kong shares by 37% each, given the lower revenue forecasts.
WuXi AppTec reiterated Monday that it continues to engage with relevant stakeholders to explore possible solutions and appealed for due process through transparent consideration of the facts.
"Our company has not been subject to any sanctions and does not pose a national security risk to any country," said Ge Li, the company's chairman and chief executive.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
March 19, 2024 00:26 ET (04:26 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
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