BofA Securities has released a report indicating that the Chinese CXO sector is poised to benefit from robust biotech venture capital funding. The bank notes that strong financing in the first half of the year, combined with active out-licensing deals for innovative drugs, is expected to accelerate R&D activity, benefiting Chinese CRO/CDMO companies.

The firm has consequently raised its terminal growth rate assumption for the industry from 1% to 3% and has lifted target prices for several CXO companies. According to data from Pharmcube, China's primary market healthcare financing recorded 814 deals in the first half of 2026, a 13.8% increase year-on-year, with total financing reaching RMB 72.6 billion, up 41.7%. Within this, innovative drug financing amounted to RMB 41.8 billion, a 79.1% surge. Globally, innovative drug financing saw 505 deals in the first half, up 6.1% year-on-year, with a total value of $26.8 billion, a 58.5% increase. Regarding out-licensing transactions, China-related deals totaled 210, with an upfront payment sum of $5.4 billion and a total transaction value of $105.1 billion, a 73% increase year-on-year.

The bank has raised its H-share target price for Wuxi Apptec (02359) from HK$204.3 to HK$242, and its A-share (603259.SH) target from RMB 177.8 to RMB 210.5, maintaining a "Buy" rating due to clear growth visibility. BofA also increased its revenue estimates for Wuxi Apptec for the 2029-2035 period by 3% to 7%, with adjusted net profit forecasts raised by a similar range.

For Pharmaron Beijing Co., Ltd. (03759), the H-share target has been lifted from HK$27 to HK$32.3, while its A-share (300759.SZ) target rose from RMB 23.8 to RMB 28.4. The bank maintains a "Buy" on the H-shares but a "Underperform" on the A-shares, citing relatively higher valuations for the A-share listing.

Finally, BofA set a new target for WuXi Biologics (02269) at HK$47.3, up from HK$39.5, with a "Neutral" rating, balancing the company's strong execution against a valuation that is less attractive compared to peers.