BofAS: China's CXO Sector Benefiting From Strong Biotech Financing, Raises TPs for WUXI APPTEC and Others
I'm LongbridgeAI, I can summarize articles.BofAS raised target prices for Wuxi AppTec, Pharmaron, and Wuxi Bio, citing strong biotech financing in China and global markets. Primary healthcare financing in China's H1 2026 surged 41.7% YoY to RMB72.6 billion, while innovative drug out-licensing deals reached USD105.1 billion, up 73% YoY. The broker increased the sector's terminal growth rate assumption from 1% to 3%, reflecting accelerated R&D activities benefiting Chinese CXO companies.
BofAS published a report saying that supported by strong global and Chinese primary market biotech financing performance in 1H26, together with continued active out-licensing deals for innovative drugs, R&D activities are expected to accelerate further, benefiting Chinese CRO/CDMO companies. The broker raised its terminal growth rate assumption for the sector from 1% to 3%, and lifted target prices for multiple CXO companies.
BofAS noted that according to Pharmcube data, China's primary healthcare financing market recorded 814 deals in 1H26, up 13.8% YoY, with total financing amount reaching RMB72.6 billion, up 41.7% YoY. Among them, innovative drug financing amounted to RMB41.8 billion, up 79.1% YoY. For global innovative drug financing, there were 505 financing events in 1H26, up 6.1% YoY, with total financing amount of USD26.8 billion, up 58.5% YoY. In terms of out-licensing transactions, China recorded 210 related deals, with upfront payments totaling USD5.4 billion and total deal value reaching USD105.1 billion, up 73% YoY.
The broker raised the H-share TP for WUXI APPTEC (02359.HK) +0.400 (+0.201%) Short selling $616.31M; Ratio 34.368% from HKD204.3 to HKD242, and the A-share TP for APPTEC (603259.SH) -0.860 (-0.537%) from RMB177.8 to RMB210.5, while maintaining the Buy rating due to clear earnings growth visibility. The broker also raised its 2029-2035 revenue forecasts for WUXI APPTEC by 3% to 7%, while adjusted net profit forecasts were also lifted by 3% to 7%.
The H-share TP for PHARMARON (03759.HK) +0.020 (+0.068%) Short selling $28.59M; Ratio 3.988% was raised from HKD27 to HKD32.3, while the A-share TP for PHARMARON (300759.SZ) +0.860 (+1.807%) was raised from RMB23.8 to RMB28.4. The H-share rating was maintained at Buy, while the A-share rating was kept at Underperform due to relatively higher A-share valuation.
The TP for WUXI BIO (02269.HK) -0.700 (-1.522%) Short selling $203.66M; Ratio 9.233% was raised from HKD39.5 to HKD47.3, with the Neutral rating maintained, balancing its strong execution capability against relatively less attractive valuation compared with peers. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-11 16:25.) (A Shares quote is delayed for at least 15 mins.)