According to the Zhitong Finance APP, Guosen Securities released a research report stating that in the domestic market, the prices of preclinical CRO, clinical CRO, and CDMO services have stopped declining and stabilized. With the steady recovery of new signed orders, the industry may welcome a reversal; in the international CDMO business, the pricing system continues to maintain a reasonable level, and the impact of the high base during the pandemic has been digested. In terms of small molecules, from the perspective of global industrial division and industrial chain transfer, Chinese companies have comprehensive advantages in talent dividends, chemical capabilities, compliant production capacity, and intellectual property protection. Considering the long cycle of capacity construction in Europe and India's shortcomings in intellectual property, the firm believes that the industry position of Chinese companies in the small molecule CRDMO field is unlikely to be shaken in the medium term (within 5 years). For large molecules, the overall market share of Chinese companies is still relatively low. The rapid development of new molecular businesses such as peptides, oligonucleotides, and CGT is expected to further open up growth space for the CXO sector, and it is recommended to pay attention to investment opportunities in related industrial chains.
<h2>Guosen Securities' main viewpoints are as follows:</h2>
For large molecule CDMO
The main domestic listed companies include WuXi Biologics, WuXi AppTec, etc., while the main overseas listed companies include Lonza, Samsung Biologics, Fujifilm, etc. WuXi Biologics and WuXi AppTec have overseas revenue accounting for over 70%, both avoiding potential geopolitical risks by laying out production capacity overseas (WuXi Biologics in the United States, Germany, Ireland, Singapore; WuXi AppTec in Singapore).
Short-term performance: The industry is experiencing high growth, with competition among China, the US, Japan, and Europe. European representative companies have stable growth rates; Japanese and Korean companies, represented by Samsung Biologics, are experiencing rapid business growth, with revenue growth guidance for 2024 and 2025 exceeding that of domestic leader WuXi Biologics (2025 revenue guidance: Samsung Biologics +19~25% vs. WuXi Biologics +12~15%).
Mid-term order outlook: Orders from Japanese and Korean companies, represented by Samsung Biologics, are growing faster than those of Chinese representative company WuXi Biologics, reflecting that Chinese large molecule CDMO may continue to face relatively fierce industry competition. The emerging field represented by ADC continues to see high growth in orders, with WuXi AppTec having an order backlog of USD 991 million by the end of 2024 (up 71% year-on-year).
Long-term capital expenditure outlook: Matching demand, both domestic and foreign players maintain high capital expenditures, supporting production capacity and reflecting confidence in long-term development.
For small molecule CDMO
The main domestic listed companies include WuXi AppTec, Asymchem, Boteng Co., Ltd., Pharmaron, Jiuzhou Pharma, and Prologis, while the main overseas listed companies include Divi’s, Siegfried, and Piramal. WuXi AppTec, Asymchem, Boteng Co., Ltd., Pharmaron, and Jiuzhou Pharma have overseas revenue accounting for over 70%, all expanding their business and avoiding potential geopolitical risks by laying out R&amp;D and production capacity overseas (WuXi AppTec in the United States, Singapore, Switzerland; Asymchem in the United States, the UK; Boteng Co., Ltd. in the United States, Slovenia; Pharmaron in the United States, the UK; Jiuzhou Pharma in the United States).
Short-term performance: Domestic listed companies have experienced a brief performance fluctuation due to the high base during the pandemic, but overall, they are expected to recover to positive growth in the first quarter of 2025, with overall growth rates outperforming overseas representative companies
Mid-term view on orders: Domestic listed companies are experiencing rapid growth in both existing orders and new contracts, among which WuXi AppTec's existing orders at the end of 2024 are expected to increase by 47.0% year-on-year, ensuring mid-term performance.
Long-term view on capital expenditure: The peak period in the domestic market has passed, and capital expenditure is showing divergence, with some leading companies (such as WuXi AppTec) expected to continue increasing capital expenditure; overseas representative listed companies have stable capital expenditure.
For Clinical/Preclinical CROs
Major domestic listed companies include Tigermed, ProPhase, Nossan, Mediso, and Zhaoyan New Drug, with a high proportion of domestic business; major overseas listed companies include Fortrea, ICON, IQVIA, and Charles River.
Short-term view on performance: Both domestically and internationally, companies are in an adjustment period, and the cooling of investment and financing in 2022-2023 has already reflected in the performance of clinical/preclinical CRO companies from 2024 to date.
Mid-term view on orders: Domestic order prices have bottomed out but show no significant recovery, while order volume and amount have shown a growth trend since 2025; overseas remains basically stable.
Long-term view on capital expenditure: Performance among companies is diverging, and there may be a certain degree of mismatch in supply and demand in the industry in the short term.
Risk Warning
Risks of intensified market competition; geopolitical risks; safety, environmental, and compliance risks; risks of economic downturn

603456

300759

03759

002821

06821

WXXWY

02269

603259

02359

Guosen Securities released a research report indicating that the overall investment and financing in CXO is showing a warming trend, especially the rapid development of new molecular businesses such as peptides, oligonucleotides, and CGT will further drive the growth of the CXO sector. Domestic CRO and CDMO business prices have stabilized, and new signed orders are recovering, with the industry expected to reverse. Chinese companies have comprehensive advantages in the small molecule CRDMO field, with strong long-term competitiveness. It is recommended to pay attention to investment opportunities in related industrial chains

Zhitong

Jiuzhou Pharma

Pharmaron

PHARMARON

Asymchem

WuXi Biologics

WUXI BIO

WuXi AppTec

WUXI APPTEC

Guotai Junan Securities: The overall CXO investment and financing is showing a warming trend, focusing on investment opportunities in the new molecular industrial chain