This article only represents the author's own views.
After five straight years of explosive growth, most recently fueled by surging demand for Covid-related services, leading biomolecular Contract X Organization (CXO) company WuXi Biologics (Cayman) Inc. (2269.HK) has moved into a new slower medical growth lane since peaking last year. Its 2022 earnings preview released last Monday showed the company’s revenue grew about 48.4% last year to about 15.3 billion yuan ($2.23 billion), while its net profit grew about 30% to about 4.4 billion yuan.
In all fairness, the 48% revenue growth is nothing to sneeze over when one considers the huge size of its annual revenue. But it’s a far cry from the 83.3% growth in 2021. Last year’s 30% profit growth was also just a third of the doubling in profit the previous year. The signs of a slowdown weighed on WuXi Biologics’ stock, which dropped for four consecutive days after it published the “positive profit” report last week, shaving 12% from the shares and wiping out HK$33.4 billion ($4.28 billion) in market value.