Citi has released a research report maintaining its "Buy" rating on WuXi AppTec (02359) with a target price of HK$240, and has added the company to its 90-day upside catalyst watch list.

WuXi AppTec has been removed from the U.S. 1260H list, and the bank expects the U.S. Office of Management and Budget (OMB) to publish its first batch of "Biotechnology Companies of Concern" (BCC) list in December. Citi believes the probability of WuXi AppTec being included on that list is low, and that easing geopolitical concerns related to the Biosecure Act represent a positive factor for the stock price.

Citi noted that within the CRO/CDMO industry, WuXi AppTec holds a leading advantage in talent, technology, and production capacity, which helps the company attract more clients and further expand its business.

The bank believes that cell and gene therapy CDMO services as well as PROTAC technology are the company's primary future growth drivers, and that their potential is currently undervalued by the market. In addition, China laboratory services are expected to achieve strong sales growth, supported by the long-tail strategy and innovative platforms.