HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>CSRC has issued new policies related to stamp duty/IPO/reduction of shares held by listed companies. These new policies may profoundly rewrite the investment logic of the primary and secondary markets.</li>
<li>IPOs may no longer be as attractive to founders. The era of M&amp;A is coming. Investors will prefer companies with positive cash flow, solid commercialization performance, and close to/already breakeven.</li>
<li>In the new context, good stories of high growth alone but with long-term losses may not be effective. We recommend overweight companies with high buybacks/dividend payout, which could eventually outperform.</li>
</ul>


CSRC has issued new policies related to stamp duty/IPO/reduction of shares held by listed companies. These new policies may profoundly rewrite the investment logic of the primary and secondary markets.
IPOs may no longer be as attractive to founders. The era of M&amp;A is coming. Investors will prefer companies with positive cash flow, solid commercialization performance, and close to/already breakeven.
In the new context, good stories of high growth alone but with long-term losses may not be effective. We recommend overweight companies with high buybacks/dividend payout, which could eventually outperform.


CSRC’s IPO Reform and Its Impact on China Healthcare Investment

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>China's CXO sector is growing rapidly, with China's dominant companies providing critical services to global pharmaceutical companies.  New modalities, particularly GLP-1/TIDES, ADCs, and bispecific antibodies, are structural demand drivers.</li>
<li>The biggest overhang for the sector, the US BioSecure Act, is overblown due to the US pharma industry's substantial structural dependency on China's CXO sector.</li>
<li>Pharmaron's investment case rests on three interlocking pillars: an irreplaceable integrated platform, a landmark commercial anchor in the GLP-1 supercycle, and the structural impossibility of a rapid US-China CXO decoupling.</li>
</ul>


China's CXO sector is growing rapidly, with China's dominant companies providing critical services to global pharmaceutical companies.  New modalities, particularly GLP-1/TIDES, ADCs, and bispecific antibodies, are structural demand drivers.
The biggest overhang for the sector, the US BioSecure Act, is overblown due to the US pharma industry's substantial structural dependency on China's CXO sector.
Pharmaron's investment case rests on three interlocking pillars: an irreplaceable integrated platform, a landmark commercial anchor in the GLP-1 supercycle, and the structural impossibility of a rapid US-China CXO decoupling.


CHINA BIOTECH SECTOR: Pharmaron's One Stop Shop!

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> announced 1H26 result, with revenue increasing 39% to RMB29B and net profit climbing 83% to RMB12B. 2Q26 revenue growth accelerated to 48% from 29% in 1Q26.</li>
<li>Driven by continued focus on core CRDMO strategy, backlog for continuing operations reached RMB63B as of June 30,2026, up 25% YoY, further enhancing business visibility.</li>
<li>The company is targeting 2026 total revenue of RMB58.5B– 60.5B (up from RMB51.3B–53.0B), with continuing operations revenue growing 35%–39% YoY (up from 18%–22%).</li>
</ul>



WuXi AppTec (2359 HK) announced 1H26 result, with revenue increasing 39% to RMB29B and net profit climbing 83% to RMB12B. 2Q26 revenue growth accelerated to 48% from 29% in 1Q26.
Driven by continued focus on core CRDMO strategy, backlog for continuing operations reached RMB63B as of June 30,2026, up 25% YoY, further enhancing business visibility.
The company is targeting 2026 total revenue of RMB58.5B– 60.5B (up from RMB51.3B–53.0B), with continuing operations revenue growing 35%–39% YoY (up from 18%–22%).


WuXi AppTec (2359 HK): Delivers Stellar 1H Result Amid US Crackdown; FY Guidance Raise

<ul>
<li>CXO sector plummeted after Biden has officially signed the National Biotechnology and Biomanufacturing Initiative. In our impression, all sharp declines of CXO were mostly due to geographical conflicts/overseas policy disturbances.</li>
<li>We remain conservative about CXO’s outlook. If investors still choose to invest in CXO, there are some questions to ponder based on the general environment of Sino-US confrontation.</li>
<li>As tensions between China and the US escalate, it may no longer be possible to think on the basis of "common sense". Investors are advised to think “outside the box”. </li>
</ul>


CXO sector plummeted after Biden has officially signed the National Biotechnology and Biomanufacturing Initiative. In our impression, all sharp declines of CXO were mostly due to geographical conflicts/overseas policy disturbances.
We remain conservative about CXO’s outlook. If investors still choose to invest in CXO, there are some questions to ponder based on the general environment of Sino-US confrontation.
As tensions between China and the US escalate, it may no longer be possible to think on the basis of "common sense". Investors are advised to think “outside the box”. 


About the CXO Plunge After Biden Signed National Biotechnology and Biomanufacturing Initiative

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 24th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, Knowledge Atlas, Kingboard Laminates, Ntes, Meituan, Zijin Gold Intl, China Life, CNOOC, Hua Hong Semi, Xiaomi.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 24th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, Knowledge Atlas, Kingboard Laminates, Ntes, Meituan, Zijin Gold Intl, China Life, CNOOC, Hua Hong Semi, Xiaomi.


HK Connect Flows Weekly (Jul 24th): Tencent, Knowledge Atlas, Kingboard Laminates, Ntes, Meituan

China

Hangzhou Tigermed Consulting is a leading China-based contract research organization (CRO) providing comprehensive biopharmaceutical and medical device R&D services. The company offers a full suite of clinical research solutions, including clinical trial operations, data management, statistical analysis, medical writing, and regulatory affairs. It was founded in 2004 and is headquartered in Hangzhou, China.

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Hangzhou Tigermed Consulting (3347 HK)

CSRC’s IPO Reform and Its Impact on China Healthcare Investment

CSRC issued new policy related to IPO/reduction of shares, which would rewrite the investment logic of primary/secondary market.Investors need to...

Xinyao (Criss) Wang

CHINA BIOTECH SECTOR: Pharmaron's One Stop Shop!

A US judge blocked the Defense Department from enforcing its designation of WuXi AppTec Co. as a Chinese military company, and granted...

David Mudd

WuXi AppTec (2359 HK): Delivers Stellar 1H Result Amid US Crackdown; FY Guidance Raise

WuXi AppTec reports strong 1H26 results with revenue up 39% and net profit up 83%. Backlog surges 25%. The company raised 2026 continuing...

Tina Banerjee

About the CXO Plunge After Biden Signed National Biotechnology and Biomanufacturing Initiative

CXO plunged after Biden signed the National Biotechnology and Biomanufacturing Initiative. As tensions between China and US escalate, it is no...

Xinyao (Criss) Wang

HK Connect Flows Weekly (Jul 24th): Tencent, Knowledge Atlas, Kingboard Laminates, Ntes, Meituan

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent (700 HK), Knowledge Atlas (2513 HK), Kingboard...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CSRC’s IPO Reform and Its Impact on China Healthcare Investment

CSRC issued new policy related to IPO/reduction of shares, which would rewrite the investment logic of primary/secondary market.Investors need to...

Xinyao (Criss) Wang

CHINA BIOTECH SECTOR: Pharmaron's One Stop Shop!

A US judge blocked the Defense Department from enforcing its designation of WuXi AppTec Co. as a Chinese military company, and granted...

David Mudd

WuXi AppTec (2359 HK): Delivers Stellar 1H Result Amid US Crackdown; FY Guidance Raise

​WuXi AppTec reports strong 1H26 results with revenue up 39% and net profit up 83%. Backlog surges 25%. The company raised 2026 continuing...

Tina Banerjee

About the CXO Plunge After Biden Signed National Biotechnology and Biomanufacturing Initiative

CXO plunged after Biden signed the National Biotechnology and Biomanufacturing Initiative. As tensions between China and US escalate, it is no...

Xinyao (Criss) Wang

HK Connect Flows Weekly (Jul 24th): Tencent, Knowledge Atlas, Kingboard Laminates, Ntes, Meituan

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent (700 HK), Knowledge Atlas (2513 HK), Kingboard...

Ke Yan, CFA, FRM

WuXi AppTec reports strong 1H26 results with revenue up 39% and net profit up 83%. Backlog surges 25%. The company raised 2026 continuing...