Macquarie urges to buy WuXi AppTec, expected to be included in the US 1260H list without being affected

Macquarie Research Report pointed out that the United States previously announced a list of companies assisting the Chinese military, known as 1260H, and then suddenly retracted it; the list includes WuXi AppTec (02359.HK). The firm stated that the 1260H list is not an investment ban, and the companies on the list are mainly prohibited from contracting defense contracts, but this does not apply to commercial cooperation with U.S. pharmaceutical companies. At the same time, the firm’s field research found that the operations of the Contract Development and Manufacturing Organization (CDMO) industry in China are completely unaffected by the U.S. Biosecurity Act.

The firm recommends that investors take the opportunity to buy WuXi AppTec shares when the stock price dips due to the 1260H news. Additionally, since the release of the 1260H list, the Chinese companies listed have shown a tendency to outperform the market due to their stock prices being sensitive to market fluctuations. The firm maintains WuXi AppTec and WuXi XDC (02268.HK) as industry favorites, both rated "Outperform," with target prices of 132 yuan and 73 yuan, respectively