In "The Big Banks," Citigroup is optimistic about the profitability visibility of CDMO companies, with WuXi AppTec, WUXI BIO, and Pharmaron as the top choices

AASTOCKS
2026.02.27 03:50

Citi published a research report indicating that as AI technology continues to develop, investors' recent focus is shifting from AI-enabled industries to AI replacing intermediaries. For contract research organizations (CROs) and contract manufacturing organizations (CMOs), the positive impact of AI on comprehensive contract research, development, and manufacturing organizations (CRDMOs) is expected to be more evident. In contrast, the accelerated adoption of AI by pharmaceutical companies may have mixed effects on specialized contract research organizations (CROs).

Therefore, Citi is currently more optimistic about contract development and manufacturing organizations (CDMOs), expecting that their better capacity locking ability and longer-term projects will continue to outperform CROs in terms of profit visibility. The global CRO/CDMO sector's top picks remain WuXi AppTec (02359.HK), WuXi Bio (02269.HK), Pharmaron (03759.HK), Lonza Group (LZAGY.US), and Samsung Biologics, all rated "Outperform." The target prices for WuXi AppTec, WuXi Bio, and Pharmaron are set at HKD 143.4, HKD 48.5, and HKD 28.8, respectively

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