To The Moon

CRO concept stocks demonstrated robust performance. At the time of writing, JOINN Laboratories (06127) surged 11.52% to HKD 22.26; TIGERMED (03347) rose 5.98% to HKD 44.98; WUXI APPTEC (02359) increased by 4.65% to HKD 105.7; and PHARMARON (03759) advanced 4.59% to HKD 20.74. Huafu Securities released a research report stating that for CXO companies reliant on external demand, order intake has shown significant improvement since 2024, with earnings returning to year-on-year growth in Q4 2024 and continuing into Q3 2025, clearly indicating an industry-wide bottoming-out and rebound trend; the firm believes the upward trend for externally-focused CXOs seen in 2025 is likely to extend into 2026. Domestically-focused CXOs have shown relatively weaker performance in both earnings and stock price compared to their externally-focused counterparts since the beginning of 2025, with an overall lag in the industry's recovery; however, the progression from front-end to back-end appears highly certain, suggesting potential left-side investment opportunities may exist currently. Yongxing Securities indicated that against the backdrop of an improving investment and financing environment for innovative drugs both domestically and internationally, the domestic CXO industry's景气度 (prosperity) is trending upwards. As emerging fields such as peptides, Cell and Gene Therapy (CGT), Antibody-Drug Conjugates (ADCs), and nucleic acid drugs continue to expand their market size, technological complexity is fueling strong demand for specialized CDMO services. Chinese CDMO enterprises, through capacity expansion, technological layout, and business model innovation, are not only building barriers in specific segments but also leveraging their scaled-up production capacity to secure global orders, potentially breaking through their previous growth ceilings.