A report from Bank of America Securities indicates that Chinese CRO/CDMO companies are poised to benefit from robust first-half funding in the global and Chinese biotech sectors, along with active out-licensing deals for innovative drugs, which are expected to accelerate R&D activities.

The firm has raised its terminal growth rate assumption for the industry from 1% to 3% and increased price targets for several CXO companies. According to data from Pharmcube, China's healthcare sector saw 814 private equity financing deals in the first half of 2026, a 13.8% year-on-year increase, with total financing reaching 72.6 billion yuan, up 41.7%. Among this, innovative drug financing amounted to 41.8 billion yuan, a 79.1% surge. Globally, innovative drug financing saw 505 deals in the first half, up 6.1% year-on-year, with total financing reaching $26.8 billion, a 58.5% increase. In terms of out-licensing transactions, China-related deals totaled 210, with upfront payments of $5.4 billion and an aggregate deal value of $105.1 billion, up 73% year-on-year.

Bank of America Securities has raised its H-share target for WUXI APPTEC (02359) from HK$204.3 to HK$242, and its A-share target for Wuxi Apptec Co.,Ltd. (603259.SH) from 177.8 yuan to 210.5 yuan, maintaining a "Buy" rating due to clear growth visibility. The firm has also increased its revenue estimates for WUXI APPTEC for 2029 to 2035 by 3% to 7%, with adjusted net profit forecasts also raised by 3% to 7%.

The H-share target for 康龙化成 (03759) has been raised from HK$27 to HK$32.3, while its A-share target (300759.SZ) has been increased from 23.8 yuan to 28.4 yuan. The H-share maintains a "Buy" rating, but the A-share is rated "Underperform" due to its relatively high valuation. 药明生物 (02269) has its target raised from HK$39.5 to HK$47.3, with a "Neutral" rating, balancing its strong execution against less attractive valuations compared to peers.