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Investing.com - HSBC initiated coverage on WuXi XDC Cayman Inc (HK:2268) with a Buy rating and a price target of HK$75.00, representing approximately 37% upside potential.
The bank forecasts a 35% net profit compound annual growth rate for WuXi XDC over 2025-27, driven by commercial project conversion and capacity expansion plans.
HSBC notes that capital expenditures are expected to remain high through 2025-27 to support the company’s long-term global positioning in the antibody-drug conjugate (ADC) market.
The stock is currently trading at 0.7x 2026 estimated price-to-earnings growth ratio, below both its H-share peers (1.5x) and global competitors (2.3x), which HSBC considers an attractive valuation.
HSBC identifies several downside risks including biotech funding volatility, slow ramp-up in Singapore operations, increasing competition, corporate governance concerns, geopolitical tensions, and margin sensitivity.
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