WuXi Biologics Reports Excellent Results and Backlog Growth; Fair Value Estimate Raised to HKD 90.00

No-moat WuXi Biologics had very strong full-year earnings that far exceeded our expectations in revenue and profit margins. Additionally, its service backlog has grown by 52% since June 2021. All around, this is a strong report. We raise our fair value estimate to HKD 90.00 per share (from HKD 80.00) assuming higher capacity utilization, which we now believe is maintainable for WuXi given its above-industry utilization rates these past two years. The stock is attractively priced at a 22% discount to our new fair value.