Good evening everyone, investors and analysts, and welcome to WuXi XDC 2025 full year's earnings conference call. This is Chris Fang, Head of Company IR, and I will be the facilitator for today's call.

Our earnings presentation material has been uploaded to the company website earlier today, and you are welcome to download and review them. Firstly, let me introduce our management team joining us today: our company CEO, Dr.

Jimmy Li, and also company CFO, Mr. Michael Shi.

During the first part of the call, our CEO and CFO will provide a brief overview of our business performance and also the financial highlights. We will then open the floor for a Q&A session to discuss our business and related topics in great detail.

Before we proceed, I would like to remind you that certain statements made today during this call may be forward-looking statements. These statements are based on current expectations and may be subject to risks and uncertainties.

Without further ado, I will now turn the call over to our CEO, Dr. Jimmy Li.

Jimmy, please go ahead.

Okay. Thank you, Chris.

Welcome, and thank you for attending our 2025 earnings results. Let's next go to next slide.

This is a brief content of tonight's presentation. I will start with annual results highlight, followed by business and operations updates, and then Michael will go over the financial results, with everyone.

Then I will come back to wrap up with a quick outlook and summary. Next slide.

So 2025 overall, we delivered another outstanding year, outstanding results. This is basically a a briefer summary of the projects as well as the financial metrics.

In terms of projects, we signed a record 70 new ICMC projects. That's actually a a big jump from the previous two years.

Also we signed another record 10 new PPQ projects in 2025. Our current active CMC projects number reached 252 by end of last year, and total PPQ projects reached 18.

There's also one client's commercial projects ongoing. On the financial side, our top-line revenue increased by 46.7% to, 5.94 billion RMB.

Gross profit grew higher to over 75 72.5% year-over-year, to slightly below 2.14 billion RMB. Adjusted net also grew close to 70% year-over-year.

Also, we are excited to share that our backlog continued to grow very strongly, reached close to $1.5 billion, which is, over 50% year-over-year growth of the backlog. That provides a lot of certainty, for 2026.

Next slide. A little bit more in terms of the different areas of the achievements.

First in terms of innovation and execution. Our total client number continued to increase to over 640.

We have helped clients submitted over 120 global INDs by 2025 cumulatively. Also we continue to expand our market share.

By end of 2025, based on our own estimate, our market share has reached over 24%. We also make a lot of breakthroughs in our innovation and technology platform, basically both in terms of the conjugation, which we upgraded to WuXiDARx, as well as also on linker and payloads, as well as the connectors.

That includes the X-Link connector, and then a novel linker-payload with the name of WuXiTECAN-1 and WuXiTECAN-2. I will share later on in terms of how we actually leveraged this innovation to basically create, additional value for clients as well as for our business.

Global footprint continue to expand. In China, besides Wuxi and Shanghai, we also made a small acquisition in Hefei.

Then we are basically starting the design and construction of a very large linker-payload-dedicated commercial site in Jiangyin. We also continued to make a very good progress in Singapore in 2025.

DP capacity expansion has been, one of the focus area in the past couple of years. We continue to expand and on target to more than double that capacity by 2029.

I mentioned Singapore site. We achieved the mechanical completion milestone in June of 2025, and we are currently on target for GMP release of the site in first half of 2026, followed by GMP manufacturing in second half of the year.

We also continue to expand in terms of our talent pool. By end of 2025, our headcount reached over 2,600, and including, more than 600 newly added in 2025.

We continued to, receive great recognitions from the industry, evidenced by two award that's basically is the the the most important awards from the ADC industry. That includes the three three consecutive years in the row for Best CDMO, as well as the first time for Best CRO Award in November 2025 at the World ADC Awards.

I wanted to also mention that, those two were the only two service awards given out at the World ADC Conference. Basically we won, both of the most important awards.

Those were basically voted by, industry leaders. This is actually a best reflection of our contribution to the global ADC and XDC industry.

With that, let me go into a little bit more details in terms of our business and operations. This is the funnel that you are probably quite familiar with.

It also best represents our business model as a CRDMO. The numbers are basically the project numbers at different stages.

At the discovery stage, our total project number cumulatively reached over 1,000. Importantly, we continued to help clients to move forward, preclinical candidates to CMC stage.

That is an important outcome of our discovery service, and and basically we call that enabled discovery to PCC. The total number reached to 69 by end of 2025.

Also in 2025 alone, we helped global clients submitted 38 INDs globally, which is the largest proportion globally, from any CDMO or or any company, basically, in that category. Our projects continue to also many projects continue to advance further down the funnel.

If we look at the Phase 2/Phase 3 project number that added up to over 40, actually 41 in 2025, a significant increase compared to 2020 2024. Also as noted, last year alone we signed a record 10 PPQ contracts, with total PPQ project now at 18.

I mentioned that, we we signed a record 70 ICMC in 2025. If you look at the the comparison, both in 2023 and 2024, the numbers were slightly over 50.

Last year we made basically another big jump to 70. Also more excitingly, if we look at the breakdown of the 70 ICMCs, more than half of those are actually from the newer modalities, or the XDC modalities.

All right, this includes, almost 20% of the bispecifics, about 5% of the dual-payloads, about 17% of the other type of conjugates, including like APCs, AOCs, etcetera, and also around those, about 10% are non-oncology, again most of those are the XDC domains. The much more diversified and also newer type of conjugates really represents, what the industry, is is moving forward with, and also laid out a great foundation for our further service revenue down the down the stream.

Let's also take a look at our PPQ pipeline. I mentioned we have, 18 PPQ projects cumulatively.

More than half of those are from overseas clients. Again, among those, five are from the MNC and and biopharma.

Also the 18 projects represent a very diversified targets and also different type of MOAs. In terms of execution, by end of last year, we have successfully completed 20 PPQ components.

Again, we use the term PPQ components here because for a single ADC projects, there might be up to four different components that need to be validated through PPQ campaigns. The message is that, we have a great pipeline of PPQ, projects, and and they represent, very diverse targets, MOAs, and we have also had a great execution track record, as far as up to 2025.

Let's also take a look at the client profile and also our market share expansion. We continue to increase clients.

That number reached over 640. Among those, 14 of the 20 top pharmas are our clients, and the revenue from the pharma is just below 1/3, basically 32% in 2025.

That obviously is an important part of our business. We also continue to expand market share.

If we look at the lower left, last 2024 our market share jumped to 21.7%, and in 2025, based on our own estimate, we continued to expand to 24%. We obviously already are the clear number one in terms of, CMC projects as well as IND approvals in 2025.

More importantly, we continued to empower and enable global clients, many biotechs, in terms of the major deals as well as out-licensing. For deals above $1 billion, basically 50% of the deal companies are our clients.

Basically every every one of two, if you hear if you hear or see M&A deals, those above $1 billion, basically every one of two are our clients. Also in terms of deal value above $1 billion, our clients' deals represent over 65%.

This continued to be an important contribution that we made to biotechs and to the industry. Next slide.

As a CRDMO, we continued to stay at the forefront of the industry in terms of XDCs ADCs and XDCs, and, variety of different combinations of payload-linkers. To that end, by 2025, our team have helped to make over 19,000, all sort of different bioconjugate molecules.

Our total discovery stage projects just over 1,000, CMC stage at 252. If you look at the ADC versus XDCs, we can see that, for CMC stage, just over 10% are the XDC domains, and at discovery stage, that proportion is quite a bit higher, over 25%.

Those represents, again, where the industry is potentially moving. That includes a lot of the novel conjugates, including peptide conjugates, oligo conjugates, Fc conjugates, antibody-chelator conjugates, and also, even, anti antiviral conjugates.

The next slide is, one of my favorite, and we continue to track each year, how many bioconjugate molecules our team make, and, what are the basically breakdowns of those, thousands of different bioconjugate molecules. In 2025 alone, our team made over 50 5,600 bioconjugate molecules.

A large proportion, slightly over 60%, are the ADCs. Obviously, biggest is the regular ADCs, but also emerging in terms of bispecific ADCs, dual-payload ADCs, with, rapidly increasing number.

Also, more interestingly, if we look at the XDC domains, right, about six about 40% are the XDC, components domains. Among those, the biggest ones are still the degrader conjugates, antibody-oligo conjugates, and antibody-peptide conjugates.

Those three were also the the top three in 2024. It remains to be the, most explored areas in terms of XDC domains.

Again, by looking at this, we we can actually tell, where the industry is going and and how the the field evolves over time. Next slide.

I mentioned that we make a lot of breakthroughs in 2025 in terms of innovation and also, how we continue to add value through those innovation to our clients as well as to XDC. Last year we continued to make progress in the WuXiDARx evolution.

We started with DAR4 a few years ago, and over the past two years we add we expanded DAR to the DAR1, DAR2, and DAR6, and that's why we now use the term WuXiDARx. The important distinction between our technology and other in the industry is that we focus mainly on the cysteine-based conjugation, so that basically is using the native cysteine site of the antibody so that you don't need to do any engineering.

That that is the the especially the new platform of DAR1 and DAR2 is important for newer modalities like AOCs and APCs. We also continued to expand the usage of the new novel connector called X-Link that helps to stabilize the maleimide instability that typically faced with cysteine-based conjugation.

Also last year we made a great a great progress in our linker-payload innovation, formally introducing the WuXiTECAN-1 and WuXiTECAN-2. Those, innovative payload-linkers help our clients to potentially develop the best-in-class ADCs, and also we have actually able to monetize our proprietary technology, which I will share a little bit later.

Next slide. Let me go over the DARx platform and the application of that first.

I mentioned that we, iterate from DAR4 to now include, DAR1, DAR2, also DAR6. Particularly, the DAR1 and DAR2s are important technologies for developing AD AOCs and APCs, because pretty much all of the AOCs and APCs only need a DAR of 1 or 2.

Again, the important benefit of this technology platform is that we don't need to do any antibody engineering, and basically you can easily develop the DAR1 and DAR2 with a similar effect of the site-specific conjugation. Also with the DARx technology, with our two-step conjugation approach, we have also enabled clients to build the dual-payload ADCs, which is another important development trend of the industry.

This platform can support, 4+4, 4+2, or 6+2 formats, basically different combinations of the two payloads. Again, I want to, emphasize that, this is without the need to do any antibody engineering, and enable the use of already existing payloads without any modification, because we use a two-step conjugation approach to add the two payloads in in two different steps.

This is easily basically adopted based on the already existing payloads. I mentioned the also important progress in the payload-linker innovation.

We introduced the TECAN-1 and TECAN-2 in 2025, and and both of them help to improve the efficacy as well as also improve on the safety, the tolerance, essentially, allow us allow clients to expand on the therapeutic index, which is ultimately what's most important for for ADCs. We share some of the information on exit TECAN-2 WuXiTECAN-2 here.

This WuXiTECAN-2 particularly focusing on improving the hydrophilicity. Basically optimization of the linker component of the linker-payload.

It allow us to demonstrate superior efficacy as well as also great tolerance in the monkey study. Also with the WuXiTECAN-2, we have a very good preclinical data on the dual-payload involving the use of MMAE and also our WuXiTECAN-2, basically showing both improvements on efficacy as well as tolerability in in cyno.

Again, those innovations, help clients to develop potential best-in-class ADCs, and also help us to actually monetize, from the technology. Next slide basically is a is a great example of how, we basically add value to client and as also monetize based on our technology.

Earlier this year we announced a deal with Erendil Erendil Labs, basically an out-licensing of our WuXiTECAN-2 technology to Erendil Labs. Erendil Labs is an AI-powered biotech, specializing in ADC as well as other biologics innovations.

The deal is valued at $885 million. This is first of our, type of new, new approach for innovation, also the first out-licensing deal based on the WuXiTECAN-2, and it obviously also will add value in terms of continue to expand our service, our our service scope to CMC further down the road.

Also with the innovation of the linker-payload as well as the continue progress of our linker-payload business, we actually see a lot of opportunities in terms of linker-payload CMC and future commercial manufacturing. As a result, we decided to make a major investment in the linker-payload commercial supply capacity build-up.

That's the investment in the Jiangyin site, a a very large-scale dedicated facility for commercial manufacturing of, linker-payloads. Next slide.

Also wanted to update our capacity and our network, global networks. We continued to expand in China as well as, in Singapore and potentially other overseas sites.

In China, in addition to Wuxi and Shanghai, as mentioned, we have an acquisition in Hefei for peptide and oligo, and then a major investment in Jiangyin for commercial-scale payload-linker manufacturing. As you are aware, we also announced a acquisition in earlier January for another CDMO based in Suzhou called BioDeLink, which basically has also more more of a all-in-one capability, including mAb, conjugation, and DP manufacturing.

Let's go over some of the sites in terms of the current status. The first is the Wuxi city site.

This is our largest manufacturing base. We what we call the all-in-one manufacturing.

In Wuxi site, we currently have three conjugation facilities, three drug product facilities in operation, also two mAb facilities, and and one linker-payload facility, as well as a labeling packaging center. This is a very large and also still pretty much globally the only site that can do all four of the component manufacturing for clinical as well as for commercial.

In Wuxi city site, we also continued to expand, particularly for drug products. We're adding the DP5 and DP6.

Both are very large-scale DP capacities. Those will be released in 2027 and also 2028 respectively.

I mentioned the Singapore, which is, a cornerstone of our commercial manufacturing, especially outside of China. We continue to make great progress for the Singapore site.

After we achieved the mechanical completion in June of 2025, the team has been focusing on commissioning and, potential release of the facility, the site, in GMP status. That is well on target, and later this year we will start manufacturing, for global client projects.

The next is the Jiangyin site. I mentioned that because of what we see as accelerated growth opportunities for payload-linker business, and also in combination with our, continued innovation in linker-payload, we see that this particular part of the business will grow faster than our overall XDC business in the next few years.

That's why we also we are investing in the very large-scale commercial site for linker-payload, which will have, more than 5-fold of the current capacity in Wuxi city site. This will also allow us to manufacture larger scales for in the XDC domain of the payload-linkers, for example, the oligos, peptides, etcetera.

This is another potential, upside of the business contributing from the payload-linker part of the overall business in the next few years. Next slide.

In addition to organic growth organic expansions in different sites, we have also made very strategic acquisitions in the past year or so. This includes a small acquisition in Hefei for peptide and oligo, and also more importantly, recent month we made the announcement to acquire BioDeLink, another, basically top three CDMO for for ADCs in China.

BioDeLink actually has well-established over 50,000 m² of the construction, and also full capability from the mAb intermediate to conjugation drug substance and drug products. Next slide.

BioDeLink acquisition is not just for for capacity, obviously, which is an important part of the benefit, but also wanted to share that, BioDeLink has a well-established customer base and also quite diverse and large portfolio of the projects, including multiple in the pre-BLA stage, basically PPQ or later stage, and also one approved ADC products already for China market. We excited to, continue to see synergies in client base, in projects, as well as also in technologies.

Those are basically updates in terms of business as well as operation achievements in 2025. Next, I will turn to Michael to share the financial results, with everyone.

Sure, thanks, Jimmy. If you look at the slides like Jimmy mentioned the beginning of the, our presentation, you can see that the XDC continues continues its strong growth momentum in the past 2 years.

In 2025, we also achieved very, exciting results. As you can see that our top-line revenue, just like what we, communicated or announced in our profit alert, our top line, the revenue grew by 46.7% and reached around 6 billion RMB.

Our gross profit also grew very strong and achieved a 72.5% growth rate and reached around 2 billion RMB. In addition to that, our gross profit margin also increased, from 30.6% to 36% in 2025.

Besides those, I I, we can see that, the ADC and XDC both of those modalities grew very strongly along with our top-line growth. As you can see that similar to 2020 2024, ADC accounts for around 90% of our all over overall revenue, and XDC accounts for around 7% of our overall revenue.

Lastly, if you look at our adjusted net profit, they also achieved outstanding growth with a growth rate of 69.9%, around 70% in growth in 2025. The our adjusted net profit reached around 1.6 billion RMB.

In addition to that, our adjusted net profit margin also increased from 22.6% in 2024 to 26.2% in 2025. Next slide.

In terms of the revenue breakdown, as you can see that, similar to 2024 and 2023, our pre-IND portfolio accounts for 42% of our all over all revenue, and our, post-IND portfolio accounts for 52% of our all overall revenue. In terms of geographic breakdown, as you can see that with the strong momentum of out-licensing, NewCo, and M&A activities, the revenue from overseas, in particular in US, increased significantly.

It's contributed 51% of our all overall revenue in 2025. Collectively, I think that the North America and Europe accounts for and the rest of the world account for 85% of the total revenue in 2025.

I think one thing I want to mention is that if you look at the, our, revenue breakdown by project status and our revenue breakdown by region, if you believe that the XDC is a proxy of, ADC R&D development, you will, you can see actually, the the growth momentum of ADC and XDC continues, because if you look the the the China, a lot of early-stage projects are continue to emerge. That's why, China's revenue accounts for 15% of the overall revenue, despite, a lot of those projects are early stage or small-size projects.

In addition to this, and you can see that, once those MNC or US companies out-license the the project from China, they quickly launch the multiple trials and also invest a lot of money to pursue the clinical trials. As a result, the it's account for significant portion of the revenue.

All those tells you that, the MNC firm MNC pharmas or the biotech or biopharmas in US are, focusing on ADC study. I believe that most of those pharmas are, treating ADC as a core modality in their future, pipeline development.

Next slide. We look at the lot margins as well.

Like what I mentioned before, our gross margin gross profit margin continue to increase in the past couple years. From 2023, we only have 26.3%, and now 20 2025, our gross profit margin, reached 36%.

All of those, are attributable to, all continuous improving utilization rate of the existing facilities, and also our quickly, ramp-up of the new production lines, such as DP3, which became operational in middle of, 2025. Also, we, thanks for the efforts of our, colleagues, we continue to enhance our operation efficiencies.

Also for the adjusted net profit, we continue to, we continue to put a very stringent or very close control on the SG&A. We continue to improve, our productivity and efficiencies, as and as result, our adjusted net profit margin also continuously in- increase from 14.9% in 2023 to 26.2% in 2025.

As you can see, our adjusted profit margin almost doubled, from 2023 to 2025. Next slide.

If you look look the funnel, you can see that our backlog, like Jimmy mentioned, previously, by the end of 2025, all, outstanding backlog reached $1.5 billion, which grew 50.3% year-over-year compared with that, of 2024. In addition to this, I think that our newly signed contract value in 2025 increased by 41% year-over-year and reached around $1.3 billion.

Next slide. We talk about CapEx.

As you can see that from the chart on the left-hand side, we almost maintained a pace of, bringing new facilities online and operational each year, right? We in, in addition to that to that, we continue will continue to invest significantly, both domestically and and overseas.

We updated our CapEx investment plan. I think that from 2026 and to 2030, we plan to commit, additional 8 billion RMB CapEx, including mainly including for BioDeLink acquisition, and also the construction of linker-payload facilities, as Jimmy mentioned, the Jiangyin site, which will target to launch by later 2027 or early 2028.

Also we are continuously looking for opportunities to expand overseas. As you can see, the on the chart on the right-hand side, in 2025, we committed 1.2 billion RMB in for the CapEx.

In 2026, if we include BioDeLink acquisition, we actually plan to invest 3.1 billion RMB. Taking out, BioDeLink acquisition, we will invest another, 1.4 billion RMB for, organic growth.

Despite all those, significant CapEx investment plans, I think by the end of last year, by the end of or end of 2025, we actually have, a cash position of 7.5 billion RMB, which, on top of that, we have, positive cash inflow from our operations. We believe that all of those provide a very strong support for our capital investment CapEx investment plan in the future.

With all those being said, I will transfer back to Jimmy to talk about future outlook and the key takeaways.

Okay. Thank you, Michael.

Let's come back to look at the outlook for the next few years. Obviously, one part of the business that's important for the next few years growth is the commercial opportunity and commercial manufacturing.

To that end, I like to share some visibility based on our own pipeline analysis, our funnel analysis. The next slide basically shows our sort of a forecast in terms of what's to come in terms of commercial projects in the next few years, right, starting in 2026 and then to 2027 and 2028.

We break it down to modalities, and the various new capacities to support late-stage and commercial manufacturing, and also, ultimately, the M-stage projects, including the PPQ components, and also the BLA submissions, which are the two most critical milestones before actual commercial manufacturing. In terms of modalities, obviously, the 2026 and perhaps also to 2027 and 2028, we see another major wave of ADC products going to commercial.

More and more BLAs, PPQs will be completed, submitted for commercial approval. We also start to see the other different modalities get into late stage.

Especially by 2028, we envision that, including bispecific ADCs, dual-payload ADCs, as well as antibody-oligo conjugates and antibody-peptide conjugates, majority of those will start to get to the PPQ and commercial BLA submission stages. To support those expanding commercial pipeline, we have fully mature Wuxi site, Singapore site will start operation this year, and then with the acquisition of BioDeLink in Suzhou, we are also adding another site, which already become commercial manufacturing of a China-approved ADC in 2025.

As noted, our larger-scale linker-payload-dedicated facility in Jiangyin will come online by end of 2027, early 2028. Also we continue to look to expand to additional sites outside of China, which includes, for example, the US site that we intend to make announcement later this year.

Those will provide more capacity to ensure sufficient manufacturing capacity for various commercial projects. We also continue to track the number of PPQ components that we execute successfully.

I mentioned earlier that by 2025 we have completed 20 PPQ component manufacturing. We expect to add at least another 10 this year, and then perhaps 15 or more in the next few years.

Also 2026 will be a year of multiple BLA submissions to the US FDA as well as to China NMPA. Again, with the next wave of ADC portfolios to come to commercial stage, we expect to see more and more of those BLA submissions in the next few years.

Those basically provides good visibility for us to target 20% of the revenue coming from M projects, and also 20% of the revenue coming from XDC domains by 2030. Next slide.

Basically, if you add that up, and then also, obviously, with our already global leading discovery service and development business, we basically are seeing all three of the R, D, M cylinders running in full speed in the next few years. That gave us a lot of confidence to maintain our CAGR between 30% to 35% in the next few years, which will be above the industry average, and will include a lot of the what we call the second wave of growth from the bispecific, dual-payloads, AOCs, APCs, etcetera.

Last page, let's go to the key take-home messages for 2025. Obviously, we continue to see very strong growth momentum for the ADC and XDC industry.

Also for 2026, BioDeLink post-acquisition integration will bring synergies to our operation, to our capacity, and we also expect to capture additional value-added synergies going forward. I mentioned that our innovation continued to empower XDC, X modalities of the bioconjugates.

We are seeing more and more bispecific ADCs, dual-payload ADCs, AOCs, APCs, and other type of XDC modalities. Those are already reflected in the 70 ICMC projects we signed in 2025, and we expect to see the continuation of those trend in 2026.

2025 was a year of breakthrough for our innovation, especially for linker-payload, and we made the out-licensing deal earlier this year for the first time. This will be the upside of our current forecast if we see any additional such deals in out-licensing or, potentially, in other type of partnerships that leverage our innovative linker-payloads.

Obviously, Singapore coming online for GMP release and GMP manufacturing later this year will help to bring additional backlog, especially for late-stage and commercial manufacturing. That's part of this year's priority, which is to continue to build backlog for Singapore for 2027 and 2028.

Last but not least, we feel very excited about our commercial opportunities in terms of the CMO part of our business. We have everything lined up to capture the next wave of the ADC approvals, as well as also to help clients to advance the XDC modalities to late stage and commercialization.

With that, I'd like to thank everyone again, and hope that you can see that we continue to make great contributions to the industry, and that basically help us to deliver another very strong year of 2025, and also a lot of opportunities for 2026 ahead. That concludes the presentation, and we open for questions.

Yeah. Thank you, Jimmy and Michael.

Let's move to the next chapter for the Q&A session. All the investors and analysts, if you have any questions, please feel free to raise up your hand, and we will unmute you.

The first question is coming from MS team, Morgan Stanley Laurence. Please.

Great. Thank you for the opportunity to ask questions, and congrats to management for a fantastic 2025.

How should we think about 2026 revenue and earnings growth given a strong increase in the backlog number, but also we have the consolidation of BioDeLink probably from April, and also the ramp-up of the Singapore facility in the second half of this year, which could potentially dilute margins. Basically, what's the outlook for 2026?

Thank you.

Let me answer that question. I think for 2026, on consolidated basis, if we look at the CDMO revenues.

The reason why I'm saying that, because obviously that the BioDeLink has biosimilar business in 2025, which they already started to terminate that business in 2025. If we look at the only CDMO revenues on consolidated basis, we still believe that the XDC as a group will be able to maintain a growth rate around 35% for the top line.

Obviously that the exact growth rate depends on where the exchange rate sits at the end, because that a significant portion of our income is coming from US dollar, but the functional currency on the reporting is RMB, the exchange rate does have an impact, but that's totally non-operational. In a nutshell, I think that the XDC as a group on consolidated basis still very confident to maintain at least the 35% growth for the revenue.

I think you ask about the margin. I think that in 2026, just a lot of work for us to do in terms the Singapore ramp-up and also BioDeLink integration.

We haven't started BioDeLink integration yet, because the acquisition will formally complete by March 27th, as a result, it's still too early for us to say exactly how much synergy and how much cost we will be able to reduce at this moment. I think that we set actually a target of to maintain at least the gross profit margin at the same level as 2020 2025.

Yeah.

Thanks a lot. Should we expect any IP income in 2026?

Obviously, you had a deal with an AI-driven drug development company last month. Should we expect any licensing income in the near term?

I will say at least our guidance, or our forecast, doesn't include that part. As you can understand, a licensing agreement actually doesn't come regularly, it's very difficult for us to forecast.

Also the milestone for the existing deal we signed, it's also depends on the progress of our partners. In our guidance, we don't actually factor in any of those.

Obviously, with our continuous investment R&D, I think that we have a better chance to do more licensing deal in the future, but currently, I think that's still at nascent stage. I don't think that investors should put the significant weight on the licensing income in the near term.

Yeah. Basically, if it happens, it would be the upside of whatever current forecast.

Okay.

Thank you. I just have so one last question on the backlog.

The the current backlog number is $1.5 billion, and $1.3 billion of that is new orders. Maybe we can infer that a big part of the backlog is early-stage projects.

In relation to your long-term CAGR guidance of 30% to 35%, can we assume like most of that is driven by R&D instead of Um so basically my question, when when is the commercial part going to ramp up significantly given your your final goal of 20% revenue from from manufacturing?

I think that this really depends on I wouldn't say it depends on This really correlates with the development stage of ADC drugs. I think that at this at this stage, you will see that our, new-signed contract value are quite close to our outstanding backlog, because most of the most of the contracts we had are still in either preclinical stage or clinical stage, the delivery the timelines usually usually from 6 months to 12 months, or 16 months, maximum.

I think along with the development stage, the change of the development stage of all those portfolios, once they reach which commercialization stage, usually the the contracts, the delivery time is longer, and and it's like more it's more of a repetitive each year, okay? I would imagine, in a couple years' time, the structure of our backlog will change slightly gradually, as we have more commercialized M-stage projects.

It's very difficult for us to say at this moment, because, most of the, the the the portfoli- most of the pipelines on all portfolio are still in clinical stage, we don't we we simply don't haven't reached such a status yet, with a significant portion of the, the the contract coming from M stage.

Just to also add a comment to that, basically, even though our backlog and the newly signed contract amounts are quite close, but we are starting to see, basically, for example, more PPQ contract amounts, right? Those will take a little bit longer to execute.

We also count the PPQ as part of our commercial stage contracts, right? That is beginning to build up, and probably will be quite a bit more substantial in 2026 and going forward.

Okay.

Thank you very much.

Thank you, Laurence. Next question is coming from HSBC Linda team.

Linda or Eve, please go ahead. Please unmute.

Thank you. Thank you, team, and for the opportunity.

I would just like to have two questions on behalf of our analyst Linda. The first question is about global ADC supply.

We understand that our acquisition of BioDeLink to expand its ready-to-use capacity and is already establishing overseas operations, including ramping up the capacity in Singapore starting in this year. We also see that overseas peers such as those in South Korea and Japan are also accelerating their capacity expansion beyond next year.

Has the company considered whether the industry can absorb this new capacity? Some more color on the competitive landscape.

The second question is on raw materials. We observe that the escalating situation in the Middle East has catalyzed the rise in oil-related prices, and will this have any impact on the cost of our antibody payload-linker this year?

Thank you. Okay.

Maybe a short answer to the second question first. Obviously, the Middle East situation is still quite new and still evolving.

At this moment, we have not seen impact on the raw material pricing yet. Also, if we look at the Ukraine-Russia war in the past couple years, that has not had any material impact on the material pricing.

Also, materials are basically pass-throughs to our clients, we don't actually make profit out of those. If the price rises, those will be basically directly pass through to clients.

That's on the second question. On the first question, you mentioned the potential new capacities coming from, for example, Samsung or Fuji, but if you look into the details, first of all, they don't have all of the pieces ready yet.

I think the earliest probably is 2027. Also, the capacity that you see is actually quite small in terms of what they have in active plan.

We still see the global supply situation remains relatively tight in the next few years, especially considering that the next wave of ADCs are already in the later stage, and getting to commercial approval stages in the next few years. I think the demand actually is stronger than what the capacity can increase.

That is also one of the important reason that we continue to make a very proactive and aggressive plans to expand on our capacity, including the acquisition of BioDeLink, even though we have a Singapore site ready this year. We continue to see that.

Also this is also reflected by our conversation with many clients in the ongoing basis.

Thank you.

Thank you. The next question is coming from Jefferies Cui Cui team.

David, please go ahead, David.

Yeah. Can you hear me?

Yes.

Thanks for taking my question. I will ask two questions on behalf of Cui Cui.

First one is about the BioDeLink. We know after the acquisition, can you share with us more a plan about how do you deal with their biosimilar business as well as we see they have some backlogs on hand.

How do you deal with that and combine and merge in your backlog? The second question is about AI drug discovery, because we see AI has been used in many early-stage drug discovery, screening, different process.

Basically can you share with us some good examples or your AI applications in the early-stage drug discovery? Thank you.

Let me answer the first question. In terms of the BioDeLink's biosimilar business, like what I mentioned before, they already started to terminate that business, second half last year.

There will be some residual business in 2026, but it's very minimum. That's first thing.

Second, that regarding their existing contract and, of course, that we need to honor those contracts. We will first to fulfill those contract according to their agreement, and then we will start to sign new contracts.

That's pretty much the plan. In terms of the AI drug discovery, I think that it's a very exciting area, and also it's very promising area as well.

I think that all the efforts and activities are still in early stage. We are also closely monitoring the development of this area.

Then, I think that we are pushing through the AI application within our organization as well. For the AI drug discovery, like what I said, this is still early, and we are continuously monitoring, and if it turns out to be something that we can leverage our experience and expertise, then I think that we will, but at this moment it's still too early for us to say anything.

Yeah.

Thank you.

Thanks, David. Due to the time constraints, maybe we are taking the last question.

It's from Goldman Zeyi team. Chris, please go ahead.

Sure. Thank you, management, for taking my questions.

This is Chris from the Zeyi team. Just to have a follow-up question on the Singapore site, we are expecting to receive GMP this year.

Can you updates the client contracts secured for the site, and also the revenue contribution that's we expected for this year and 2027? Thank you.

Yeah.

Chris, let me take on this. Basically, our current forecast for Singapore is minimum revenue contribution in 2026, because GMP release of the site is in the next few months, but clients will need to make the GMP audits after it's released.

Any production actually will be later in the second half. Also, as a brand-new site, our focus is to engage clients to visit and evaluate, with a goal of basically building up a significant backlog in 2026, but not so much in terms of actual execution.

That's kind of the overall planning and in terms of the pace for Singapore.

Okay. Thank you, that's very clear.

Thank you. Let me also turn the phone to Dr.

Jimmy Li again to give us the closing remark.

Okay. Again, thank you, everyone, for joining the earnings call.

As you can see that, we continued to execute, continued to deliver a very strong performance in 2025. We made a lot of advancements in terms of innovation, also in terms of moving a variety of different XDC domain projects into the CMC and clinical stage.

We've also continued to feel very excited about our progress on the commercial manufacturing side in terms of signing record number of PPQ contracts. 2026, I think, will continue to have quite a few additional catalysts that will be important for our growth in the next few years, including innovation and also value creation from those innovations, example by the recent deal with Erendil Labs.

Our payload-linker business also will grow faster than the average or than the overall group company. Accordingly, we are expanding Jiangyin site, dedicated for the linker-payload commercial capacity.

We have made a couple strategic acquisitions, which will add immediate capacity or capability to our network. We feel excited that we'll start to see more synergies also from operation and also technologies going forward.

Last but not the least, I think 2026 will see an important new milestone in terms of multiple BLA submissions from our clients to both the FDA as well as to China NMPA. This will lay a solid foundation for our commercial manufacturing and commercial revenue a few years down the road.

Those actually give us a lot of confidence in terms of our overall targeted growth for the next few years. That's why we feel very comfortable for saying that we'll maintain a CAGR of 30% to 35% in the next few years.

Again, thank you for joining, and we look forward to sharing more updates with you going forward.

Thank you, Jimmy and Michael. Thanks everyone's participation, and also your interest for the WuXi XDC.

That concludes our earnings call today. Thank you, have a nice day.