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<Research>M Stanley: WUXI BIO's Sale of Vaccine Facility in Ireland Negative to ST Rev. but Positive to Profitability/ Cash-use Efficiency
Recommend 9 Positive 16 Negative 11 |
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WUXI BIO (02269.HK) announced to sell its vaccine facility in Ireland to Merck for US$500 million, a price close to its total construction cost of US$480 million. The company said that the return on investment is the main consideration behind this transaction. Since the asset's return on investment for WUXI BIO is below target, according to WuXi AppTec's management, the deal seems to be a win-win for both parties, Morgan Stanley remarked in its report. Although selling the asset will sacrifice WUXI BIO's short-term revenue, the broker believed that the transaction will have a positive impact on the company's profitability, return on investment, and cash utilization efficiency. Consequently, it reiterated an Overweight rating for WUXI BIO with a target price of $31.6. AAStocks Financial News |
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