Guolian Minsheng Securities released a research report stating that global biotech and pharmaceutical company investment and financing activities, along with transaction demand, have significantly rebounded in 2025. The vigorous development of new technology platforms for innovative drugs is driving a comprehensive recovery in downstream demand for the CXO industry, with the sector's high growth momentum expected to continue into 2026. The Chinese CRO market returned to a growth trajectory in 2025. For the CDMO sector, the report suggests focusing on high-growth segments: 1) first-mover leaders in the peptide supply chain; 2) companies poised to benefit from the ADC wave; 3) specialized companies with forward-looking layouts in the small nucleic acid direction; and 4) companies with significant potential marginal traction from major products. The main views of Guolian Minsheng Securities are as follows:
Global demand has rebounded strongly, laying the foundation for growth. Global Biotech financing hit a record high in Q4 2025, while demand from multinational pharmaceutical companies (MNCs) has bottomed out and is rising. The number of INDs in the Chinese market increased by 19% year-on-year, and BD transaction value saw high year-on-year growth, indicating robust vitality in the domestic innovative drug market, which provides sustained momentum for the CXO industry.
The WuXi AppTec group maintains a solid leading position, with new businesses driving high growth. WuXi AppTec delivered impressive performance in 2025, with adjusted net profit increasing by 41.3% year-on-year. The TIDES business has become a new growth engine, with revenue growth exceeding 90%. It holds a leading position in GLP-1 pipelines, commanding nearly 25% of the global market share. Small molecule CDMO commercialization projects continue to contribute stable revenue. WuXi Biologics reached a record high of 945 total projects, with bispecific/multispecific antibody and ADC projects growing by 30%. New technology platforms are succeeding the macromolecule wave, contributing new medium- to long-term growth drivers. The number of late-stage clinical and commercial projects lays a solid foundation for accelerated future revenue from commercial manufacturing (M). WuXi XDC, focused on the ADC/XDC segment, saw revenue growth exceed 40% in 2025, increasing its global market share to over 24%. Its clear global capacity expansion plans support long-term development, positioning the company to continue benefiting from the industry trend of ADC new drug commercialization.
The domestic clinical CRO sector has reached a clear inflection point, with Tigermed benefiting from the industry recovery. The Chinese CRO market returned to a growth track in 2025. Order prices for Tigermed stabilized and recovered in 2025 after consecutive declines. Benefiting from the growth in the number of domestic clinical pipelines and an improved financing environment, the trend of rising volume and prices in downstream demand is expected to continue.
Global CDMO giants are accelerating expansion, confirming the industry's high growth. Lonza and Fujifilm have provided optimistic performance guidance, with Fujifilm securing $8 billion in new orders for 2025. These overseas CDMO leaders are actively expanding large-scale production capacity, demonstrating confidence in their development and reflecting strong global demand for macromolecule CDMOs. Charles River has seen an improvement in order trends since the second half of 2025. The company anticipates that its safety assessment business will return to a growth trajectory in the second half of 2026, serving as a leading indicator for early-stage R&D demand in the industry and further validating the trend of a full-industry recovery for CXOs.
Investment Recommendations. For the CRO direction: it is recommended to focus on platform leaders in clinical CRO like Tigermed, which are poised to benefit continuously from the innovation wave, and segment leaders like Purapharm. Pay attention to front-end CRO companies such as Hongbo Pharmaceutical, Zhaoyan New Drug, Medicilon, Innostar, and the integrated leader Pharmaron, where changes in downstream orders may materialize more quickly and offer greater marginal elasticity. For the CDMO direction: focus on high-growth segments, 1) first-mover leaders in the peptide supply chain: WuXi AppTec, Nuotai Biology; 2) companies likely to benefit from the ADC wave: WuXi XDC, Haoyuan Pharmaceutical; 3) specialized companies with forward-looking layouts in small nucleic acids: Nuotai Biology, Chengda Pharmaceutical, Aoruite; and 4) companies with significant potential marginal traction from major products: Asymchem, Viva Biotech, Porton Pharma, etc.
Risk warnings include: 1) Prices falling short of expectations due to healthcare insurance and volume-based procurement policies; 2) Clinical progress or time-to-market falling behind schedule; 3) Uncertainty in industry competition; 4) Geopolitical risks; 5) Downstream investment, financing, and demand recovery falling short of expectations.