Analysis of the Impact of WuXi Biologics' CRDMO+ Strategy on Gross Margin

Now let me provide you with the complete analysis report:

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WuXi Biologics (WuXi Biologics, 2269.HK) officially launched its

in early 2025, upgrading its existing CRDMO (Contract Research, Development, and Manufacturing Organization) model in an all-round way. The strategy is centered around four core pillars: , aiming to further strengthen end-to-end customer empowerment capabilities and drive high-quality business development [1][2].

Time Period	Key Milestones
2018-2022	CRDMO model establishment phase, with gross margin operating at a high level (44.8%-46.9%)
2023-2024	Strategic adjustment phase, gross margin stabilized and recovered after temporary pressure
Early 2025	CRDMO+ Strategy officially launched, four pillars fully rolled out
H1 2025	CRDMO+ Strategy effects emerged, gross margin improved significantly

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Year	Gross Margin (%)	YoY Change	Strategic Phase
2020	41.5%	-	Base Period
2021	46.9%	↑5.4pp	CRDMO Rapid Expansion Phase
2022	44.8%	↓2.1pp	Expansion Phase
2023	40.1%	↓4.7pp	Strategic Adjustment Phase
2024	41.0%	↑0.9pp	Recovery Phase
H1 2025	42.7%	↑1.7pp	CRDMO+ Effectiveness Phase

Metric	Pre-CRDMO+ Strategy (2020-2022 Average)	Post-CRDMO+ Strategy (2023-H1 2025 Average)
Average Gross Margin	44.4%	41.3%
Average Net Margin	36.4%	23.3%
Number of Integrated Projects	367	756
Number of Commercial Projects	12	22

Note

: Gross margin declined in the initial phase of strategy implementation, mainly due to macroeconomic environment, project structure changes, and cost increases. However, with the advancement of the CRDMO+ Strategy, gross margin has returned to an upward trajectory since 2024 [1][3].

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:

• Leading technology platforms (WuXiUP™, WuXiBody™) significantly improve production efficiency
• Single-use bioreactor technology reduces capital expenditure and operating costs
• Continuous bioprocessing achieves 10-20x capacity expansion, reducing unit costs

:

• The WuXiUP™ platform enables a 1000L single-use bioreactor to deliver capacity equivalent to traditional 10,000-20,000L reactors
• BeiHai Kangcheng’s Gruinning project: integrated production volume increased by >110x, enzyme specific activity increased by >50%
• Gross Margin Contribution: Approximately +0.8 percentage points
  [2][4]

:

• Established partnerships with all of the world’s top 20 pharmaceutical companies
• The “Follow and Win Molecules” strategy binds leading customers with long-term orders
• Complex molecule projects (bispecific antibodies/ADCs) account for 70%, enjoying technology premiums

:

• Added 86 new integrated projects, hitting a new historical high for the same period
• H1 2025 revenue from manufacturing (M) increased by 24.9% YoY
• Gross Margin Contribution: Approximately +0.3 percentage points (indirect)
  [1][3]

:

• The WuXi Biologics Business System (WBS) continuously optimizes operational efficiency
• Approximately 130 improvement projects were implemented in H1 2025, directly driving gross margin growth
• Flexi menu-style services flexibly meet diverse customer needs

:

• The “DNA to IND” timeline shortened to 2.5-6 months
• WBS improvement projects directly increased gross margin by
  approximately 1.0 percentage points
• Gross Margin Contribution: Approximately +1.2 percentage points
  [2][4]

:

• Global dual-source strategy (Ireland/Singapore/Germany/US) diversifies geopolitical risks
• Capacity ramp-up at the Singapore plant, with scale effects gradually emerging
• Plans to complete 25 PPQ (Process Performance Qualification) projects in 2025

:

• Increased capacity utilization leads to lower marginal costs
• Supply chain optimization reduces the impact of raw material cost fluctuations
• Gross Margin Contribution: Approximately +0.5 percentage points
  [1][3]

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Factor	Contribution (Percentage Points)	Explanation
WBS Efficiency Improvement	+1.2pp	Driven directly by 130 improvement projects
WuXiUP™ Continuous Bioprocessing	+0.8pp	Reduced filler costs and increased capacity
Scale Effects	+0.5pp	Increased capacity utilization
Digital Transformation	+0.4pp	Automated and intelligent production
Product Structure Optimization	+0.3pp	Increased proportion of complex molecules
Macroeconomic Factors (cost increases, etc.)	-0.6pp	Partially offset efficiency improvements
Total	+2.6pp	40.1% → 42.7%

Development Phase	Gross Margin Range	Number of Projects (H1 2025)	Revenue Contribution Ratio
Pre-IND (R&D)	35-40%	429	~20%
Early Clinical (I/II)	38-42%	344	~25%
Late Clinical (III)	42-48%	67	~25%
Commercial Manufacturing (M)	45-52%	24	~30%

:

• Gross margin rises in a stepped manner as projects progress from R→D→M
• Commercial manufacturing projects (M) have the highest gross margin (45-52%), contributing 30% of revenue
• The “Follow and Win Molecules” strategy drives more projects into high-margin phases [1][4]

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1. Capacity Ramp-Up
   : 25 PPQ projects planned at the Singapore plant, with continuous improvement in capacity utilization
2. WBS Deepening
   : Expected to launch 50+ improvement projects, continuing the trend of efficiency enhancement
3. Product Structure Optimization
   : Target to increase the proportion of complex molecule projects to 75%+
4. Scale Effects
   : Number of integrated projects expected to exceed 900

Metric	2024 Actual	2025 Forecast
Gross Margin (IFRS)	41.0%	43-45%
Adjusted Gross Margin	42.8%	45-47%
Gross Margin Improvement	-	+2-4pp
Revenue Growth Guidance	9.6%	14-16%

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1. The CRDMO+ Strategy has a significant positive impact on gross margin
   : Gross margin rose to 42.7% in H1 2025, recovering 2.6 percentage points from the 2023 low
2. Innovation+ and Agility+ are the main drivers of gross margin improvement
   : The WBS system and technological platforms contributed approximately 2.0 percentage points to gross margin enhancement
3. Business structure upgrade (R→D→M) will continue to support gross margin growth
   : The increase in the proportion of commercial projects brings structural improvement opportunities
4. Short-term pressure does not change the long-term positive trend
   : Full-year 2025 gross margin is expected to reach 43-45%, with adjusted gross margin reaching 45-47%

• Macroeconomic uncertainty may affect customer demand
• Depreciation pressure during the new capacity ramp-up period
• Geopolitical risks may affect global business layout
• Raw material cost fluctuation risks

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[1] PR Newswire - WuXi Biologics Delivers Solid 2024 Results, Expects Accelerated Growth in 2025 (https://www.prnasia.com/story/482976-1.shtml)

[2] Pharmcube ByDrug - Behind 2025’s Accelerated Growth: Decoding WuXi Biologics’ CRDMO+ Strategy (https://bydrug.pharmcube.com/news/detail/dc518b3e2b22693b3668580952262da5)

[3] WuXi Biologics 2025 Interim Report (https://stockn.xueqiu.com/02269/20250922669959.pdf)

[4] PR Newswire - WuXi Biologics Reports Solid 2025 Interim Results (https://www.prnewswire.com/news-releases/wuxi-biologics-reports-solid-2025-interim-results-302533431.html)

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: January 20, 2026
: WuXi Biologics’ publicly disclosed financial data, brokerage research reports, Wind Database