02268 Overview

Morgan Stanley's Outlook: Morgan Stanley predicts that WUXI XDC's share price will rise in the next 30 days due to its recent decline, making it more attractive for short-term valuation.

Out-Licensing Agreement: WUXI XDC has announced a significant out-licensing agreement for its payload-linker technology, which includes upfront payments, milestone payments, and potential sales royalties to enhance sales and profitability.

Broker Rating: The broker has rated WUXI XDC as Overweight, setting a target price of $86 for the stock.

Short Selling Data: As of the latest data, WUXI XDC has a short selling amount of $62.57 million, with a short selling ratio of 13.437%.

Market Performance: WUXI BIO and WUXI XDC experienced declines of approximately 7% and 8% respectively, while Hong Kong-listed CRO/CDMO companies overall lost between 2% to 9%.

Analysis of Decline: CLSA's report attributes the decline to technical factors and capital flow rather than fundamental issues, suggesting that the pullback is a short-term volatility rather than a sign of weakening demand.

Market Overview: The Hong Kong bourse opened lower, with the Hang Seng Index (HSI) dropping 509 points or 1.9% to 26,572, amid a turnover of HKD124.419 billion.

Pharmaceutical Sector Decline: Pharmaceutical stocks were the biggest losers, with notable declines in HANSOH PHARMA, SINO BIOPHARM, and CSPC PHARMA, all experiencing significant short selling.

Insurance Sector Struggles: Chinese insurers faced pressure, with major companies like CHINA LIFE and PING AN seeing substantial losses, contributing to a broader decline in the financial sector.

AI Stocks Recovery: Three AI-related semi-IPOs rebounded after previous losses, with MINIMAX-WP, KNOWLEDGE ATLAS, and HAIZHI TECH GP all posting gains and increased trading volumes.

Earnings Forecast Adjustment: WUXI XDC disclosed a decline in operating margins for 2025, leading Morgan Stanley to reduce its earnings forecast for 2026-30 by 1-2% and adjust the target price from HKD88 to HKD86.

Positive Long-term Outlook: Despite the short-term challenges, Morgan Stanley predicts a 36% CAGR for WUXI XDC's adjusted net profit from 2024 to 2027, assigning an Overweight rating due to expectations of profit growth, margin expansion, and industry leadership.

Top Stock Purchases: As of February 10, 2026, South Korean investors' most purchased stock on the Hong Kong Stock Exchange is MINIMAX-WP (00100.HK) with a net purchase of approximately USD20.7 million, followed by CAM CSI300 (03188.HK) and MONTAGE TECH (06809.HK).

Shift in Investment Focus: Compared to 2025, South Korean investors are increasingly targeting China's emerging industries and tech companies, indicating a strategic shift in their investment approach.

WUXI BIO Profit Forecast: WUXI BIO projects a 16.7% YoY revenue growth for 2025, reaching RMB21.8 billion, surpassing market expectations of RMB21.5 billion.

Gross Margin and Net Profit Expectations: The company anticipates a gross margin increase to 46% and a net profit rise of 45.3% YoY to RMB5.7 billion, both exceeding market estimates.

Impact of WUXI XDC: Nomura highlights WUXI XDC as a key driver for revenue growth, with 2H25 revenue expected to grow by 12% YoY, up from 9% in 1H25.

Target Price Adjustment: Nomura raised WUXI BIO's target price from $37.36 to $50.54, maintaining a "Buy" rating based on the positive outlook.