To The Moon

Innovative drugs surge: Is earnings growth driving a sector value revaluation?
Today, Hong Kong-listed innovative drug stocks rallied sharply, with WuXi XDC soaring over 14%, Asymchem jumping 16.83%, and Insilico Medicine rising 12.87%.

On the news front, WuXi XDC and Asymchem just released their interim 2026 results.

For WuXi XDC, first-half revenue reached RMB 3.701 billion, up 37.0% year-on-year, in line with market expectations; net profit attributable to shareholders was RMB 819 million, up 9.9%; adjusted net profit attributable to shareholders was RMB 1.027 billion, up 37.4%, essentially matching revenue growth and indicating sound earnings quality. Gross margin was 37.0%, up 0.9 percentage points year-on-year. Order backlog remained robust, with unfilled service orders of approximately $2.0 billion, up 50.4% year-on-year – order growth continued to outpace revenue growth, providing strong visibility for future growth. The company reaffirmed its 2025–2030 revenue CAGR guidance of 30–35%, with overall results meeting or slightly beating consensus estimates.

For Asymchem, first-half total operating revenue was RMB 3.607 billion, up 13.1% year-on-year, in line with expectations; net profit attributable to shareholders was RMB 520 million, down 15.7% year-on-year, mainly due to foreign exchange fluctuations; adjusted net profit was RMB 753 million, up 12.9% year-on-year. Gross margin was 42.3%, up 0.3 percentage points at constant exchange rates. By segment, small-molecule business revenue was RMB 2.297 billion with a gross margin of 47.8%, operating steadily; emerging business revenue reached RMB 1.304 billion, up 72.5% year-on-year, accelerating as a core growth engine, with chemical macromolecules and biologics revenue up 94.1% and 122.8% year-on-year, respectively.

On the order front, total orders in hand stood at $1.673 billion, up 53.8% year-on-year, and new orders signed year-to-date grew 54.6% year-on-year, providing support for accelerated delivery in the second half. Domestic revenue rose 69.0% year-on-year, signaling a clear recovery in the local market. The company maintained its 2026 revenue growth guidance of 19–22%, with overall results meeting expectations, and the standout highlights being the emerging business ramp-up and strong order growth.

In addition, overseas CXO giants such as IQVIA, Medpace, Lonza, and Samsung Biologics have recently reported earnings, with order backlogs showing a strong turnaround and multiple companies raising full-year guidance, confirming a recovery in global R&D demand. Combined with the robust out-licensing activity of domestic innovative drugs, the market responded positively to these multiple catalysts, driving the sharp rally in the Hong Kong innovative drug sector. $药明康德(02359)$$药明生物(02269)$$药明合联(02268)$$凯莱英(06821)$$英矽智能(03696)$$百济神州(06160)$$恒瑞医药(01276)$$恒瑞医药(600276)$$JIANGSU HENGRUI PHARMACEUTICALS CO LTD(JHPCY)$$云顶新耀(01952)$$药明巨诺-B(02126)$$荣昌生物(09995)$$泰格医药(03347)$$翰森制药(03692)$$信达生物(01801)$