S&P shifts WuXi AppTec view to stable

S&P said it shifted its outlook for WuXi AppTec Co. Ltd. (XAT) to stable from positive because it does not expect the company’s free operating cash flow to be at a positive level over the next two years.

“XAT's strong topline growth comes with higher capital spending than we previously anticipated. We now project FOCF to be positive from 2024, instead of 2023. With the current equity market weakness, the company is more likely to use debt to fund its capital expenditure (capex) and other needs. We project debt leverage of 0.6x as of end-2023, versus our previous forecast of net cash in 2023,” the agency said in a press release.

S&P also affirmed XAT’s BBB- issuer rating.

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