Wuxi Biologics Shares Slide on Lower Profit Guidance

By Ben Otto

Shares of Wuxi Biologics (Cayman) were halted in Hong Kong after sliding 24% on guidance for lower profit and weaker-than-expected revenue.

The Chinese contract drugmaker's shares were down to 33.15 Hong Kong dollars (US$4.24) on Monday, on track for their biggest one-day slide since listing in 2017. The stock has fallen 45% this year.

The drop came after Wuxi Biologics said it expects a weaker bottom line this year due mainly to spending on capacity expansion and lower revenue growth.

Revenue growth will fall short of a 30% target, with 40 fewer projects meaning a revenue gap of about US$300 million and delays in regulatory approval affecting an additional US$100 million, it said in presentation slides on its website.

A goal to add 120 new projects this year was "overtly bullish," it said. The company added 91 new projects through November, compared with 138 and 136 for 2021 and 2022, respectively.

"Our industry faces near-term challenges," with a biotech funding slowdown likely leading to annual growth in the single digits, down from a rate of around 15% in past years, Wuxi Biologics said.

It said its gross profit margin and growth rate likely bottomed out this year and forecast a turnaround in the second half of 2024.

The Wuxi, China-based company posted first-half revenue of 8.49 billion yuan (US$1.19 billion), up 18% from a year earlier, while profit fell 11% to CNY2.27 billion.

Write to Ben Otto at ben.otto@wsj.com

(END) Dow Jones Newswires

December 03, 2023 23:07 ET (04:07 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.