WuXi AppTec was underweight!

On the evening of November 25, WuXi AppTec, the world's leading pharmaceutical R&D and production outsourcing company, announced that shareholders controlled by the company's actual controller, and shareholders who signed a concerted action agreement with the actual controller, are expected to reduce their holdings by no more than 65 million shares, that is, no more than 65 million shares will be reduced.

It exceeds 2.2% of the company's total share capital.

Based on the latest stock price of 81.94 yuan per share, if the above-mentioned shareholders of WuXi AppTec reduce their holdings by 65 million shares, the cash amount will be around 5.3 billion yuan.

Currently, WuXi AppTec’s total market value is close to 240 billion yuan.

Currently, investors are most concerned about how much impact this shareholding reduction plan will have on WuXi AppTec's stock price.

WuXi AppTec shareholders plan to reduce their holdings. After reducing their holdings to cash out 2.2 billion yuan a few months ago, WuXi AppTec shareholders have come up with another plan to reduce their holdings.

On the evening of November 25, WuXi AppTec announced on the Shanghai Stock Exchange that due to its own capital needs, shareholders controlled by the company’s actual controller and shareholders who have signed a concerted action agreement with the actual controller are expected to reduce their holdings by no more than 65 million shares, that is,

No more than 2.2% of the company's total share capital.

As of now, shareholders controlled by the actual controller of WuXi AppTec and shareholders who have signed a concerted action agreement with the actual controller hold a total of 713 million A shares of the company, accounting for 24.07% of the company's total share capital.

These shares are the shares obtained before the company's IPO and the shares obtained by converting capital reserves into equity capital after the listing. They have been listed and circulated since May 10 last year.

Based on WuXi AppTec’s latest stock price of 81.94 yuan per share, if shareholders reduce their holdings by 65 million shares, the cash amount will be around 5.3 billion yuan.

After the above-mentioned shareholding reduction plan was disclosed, many investors expressed concerns about the company's stock price on online platforms such as Stock Bar, believing that the stock price will be under greater pressure in the future.

However, some investors said, "We are not reducing our holdings at a high level. There is nothing to be afraid of." WuXi AppTec is a leading global pharmaceutical R&D and production outsourcing company.

In the first three quarters of 2022, the company's performance is still very impressive.

In the first three quarters, the revenue was 28.395 billion yuan, a year-on-year increase of 71.87%; the net profit attributable to the parent company was 7.378 billion yuan, a year-on-year increase of 107.12%; the net profit after non-attributable to the parent company was 6.232 billion yuan, a year-on-year increase of 100.64%.

Looking at a single quarter, revenue in the third quarter continued to grow sequentially. For the first time, revenue in a single quarter exceeded 10 billion yuan, reaching 10.638 billion yuan, a year-on-year increase of 77.76% and a month-on-month increase of 14.61%. The single-quarter net profit attributable to the parent company was 2.742 billion yuan, a year-on-year increase.

209.11%.

In early November, CITIC Securities issued a research report stating that the company's performance in 2022 can be expected to achieve high growth, and raised the company's EPS forecast for 2022-2024 to 3.05/3.41/4.31 yuan (the original forecast was 2.99/3.33/4.16 yuan), giving

The company's 2023 PE is 34 times, corresponding to a target price of 116 yuan, and the "buy" rating is maintained.

How much will the company's stock price be affected?

How much impact will this shareholding reduction plan have on WuXi AppTec’s share price?

Let's look back at how the stock price behaved after the company's shareholders disclosed their last shareholding reduction plan.

The last shareholding reduction plan of WuXi AppTec shareholders was disclosed on the evening of June 10 this year.

At that time, the company announced that shareholders controlled by the company's actual controller and shareholders who signed a concerted action agreement with the actual controller planned to reduce their holdings of no more than 3% of the company's A shares between July 4 and September 30, that is, no more than 3% of the company's A shares were held.

More than 88.68 million shares.

If the holding is reduced, the cash amount will be around 9 billion yuan.

On June 13, the first trading day after the disclosure of the shareholding reduction plan, WuXi AppTec’s A shares opened sharply lower, once hitting the limit during the session, and finally closed down 9.56%.

However, more than 10 days later, the company's stock price recovered its lost ground and hit a multi-month high on July 5.

In the following more than three months (from July 6 to October 11), the market continued to correct, with the Shanghai Stock Exchange Index falling 12%. WuXi AppTec also followed the market's decline, with its stock price falling by nearly 40%. At that time, Pharmaron and Porton

Pharmaceutical stocks such as China Shares, Medicilon, Fosun Pharma, and Stellite also fell by more than 40%.

Judging from the final reduction results, the above-mentioned shareholders of WuXi AppTec did not fully reduce their holdings. They reduced their holdings by a total of 23.21 million shares, accounting for 0.78% of the company's total share capital. The average transaction price was 95.02 yuan/share, and a total of approximately 22

billion.

In other words, the actual amount of shareholder reduction was less than one-third of the original reduction plan.

Judging from the above data, after the shareholding reduction announcement is disclosed, the company's stock price will be under pressure in the first 1-2 days.

However, in the long run, the announcement of the shareholding reduction will have little impact on the stock price.

The company's mid- to long-term stock price trends are highly correlated with the overall market trend.

Can you still invest in pharmaceutical stocks?

Since the beginning of this year, the pharmaceutical sector has shown a downward trend as a whole.