In a research report, CLSA noted that as AI technology continues to evolve, investors' focus has recently shifted from AI-enabled industries to AI replacing intermediaries. For contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs), the positive impact of AI on comprehensive contract research, development, and manufacturing organizations (CRDMOs) is expected to be more pronounced. In contrast, the accelerated adoption of AI within pharmaceutical companies may have mixed effects on specialized CROs.
Therefore, CLSA currently favors contract manufacturing organizations (CDMOs), expecting their superior capacity-locking capabilities and longer-term projects to continue outperforming CROs in terms of earnings visibility. The firm maintains its top picks in the global CRO/CDMO sector as Wuxi Apptec (02359.HK), Wuxi Bio (02269.HK), Concord Medical (03759.HK), Lonza Group (LZAGY.US), and Samsung Biologics, all rated 'Outperform.' The target prices for Wuxi Apptec, Wuxi Bio, and Concord Medical are set at HKD 143.4, HKD 48.5, and HKD 28.8, respectively.
