Multiple stocks of innovative drugs hit the daily limit, and the 300 billion giant earned nearly 20 billion yuan net last year

Reporter | Han Liming Intern Jiang Yutong

Editor | Luo Yifan Liu Xueying

On the morning of April 2, the A-share innovative drug sector fluctuated and strengthened. As of around 10:35, JinYao Pharmaceutical hit five consecutive limit-ups, Peking University Medicine and Yibai Pharmaceutical hit two consecutive limit-ups, Chongqing Pharmaceutical Holdings surged to the limit, Kangzhi Pharmaceutical, He Yi Pharmaceutical, Xin Ganjiang, and Northland increased over 10%, and Yu Heng Pharmaceutical, Huisheng Biological, Deyuan Pharmaceutical, Changshan Pharmaceutical, and Jinbo Biological followed suit.

CXO sector’s top-performing stocks in 2025, data截至4月2日10:48

In recent days, several CXO (pharmaceutical contract outsourcing services) companies have successively disclosed their 2025 financial reports. Unlike the industry-wide pressure in 2024, with many companies experiencing declines in revenue and net profit, the overall performance of the CXO industry in 2025 shows a trend of performance differentiation.

On one hand, WuXi AppTec, with a current market value exceeding 300 billion yuan, achieved both revenue and profit growth. In terms of revenue, WuXi AppTec and Kelun Ying increased by 15.84% and 14.91% year-on-year, respectively; in terms of profitability, Tigermed’s net profit attributable to shareholders soared by 119.15% year-on-year, and WuXi AppTec’s net profit attributable to shareholders reached 19.15B yuan.

On the other hand, Kanglong Chemical achieved operating income of 14.1B yuan, up 14.82% year-on-year, but its net profit attributable to shareholders was 1.66B yuan, down 7.22% year-on-year, showing a pattern of increasing revenue but not profit; Zhaoyan New Drug achieved operating income of 1.66B yuan, down 17.87% year-on-year, but net profit attributable to shareholders was 298 million yuan, up 302.08%, achieving profit growth without revenue growth.

Reflecting in the A-share market, Wind data shows that the overall valuation of the CXO sector significantly recovered in 2025. From the range of fluctuations, throughout 2025, Zhaoyan New Drug, Chengda Pharmaceutical, and Haoyuan Medical saw their stock prices increase by over 100% year-to-date; Medisi, WuXi AppTec, Sunshine Nuohe, and Baicheng Medical also saw stock price increases of over 50% in the same period.

A securities analyst told 21st Century Business Herald that, under the resonance of multiple positive factors such as the warming of downstream innovative drug investment sentiment, continuous increase in industry order demand, and better-than-expected performance of leading companies, the CXO market has continued to rebound since 2025. With the performance of leading indicators such as new signed orders and backlog orders exceeding expectations, short-term profit forecasts for the industry still have room to rise.

Driven by a high-growth track, structural market trends

Currently, China’s CRO (contract research organization) industry is in a stage of industry consolidation and demand recovery. On one hand, according to the Human Genetic Resources Filing Data from the National Health Commission, the number of clinical CRO companies filing in 2025 has decreased by 69% from the peak in 2021. The further integration of the clinical research outsourcing industry is gradually leading to healthier competition.

On the other hand, the domestic biopharmaceutical industry is gradually recovering, driving steady growth in demand for clinical research outsourcing services. Meanwhile, as Chinese pharmaceutical companies accelerate their overseas expansion and licensing-out transactions become more active, clinical CRO companies with global service capabilities are gradually gaining competitive advantages.

Looking at the specific operational data of disclosed annual reports of CXO companies, industry leader WuXi AppTec performed particularly well, with 2025 revenue surpassing 45.46B yuan and net profit attributable to shareholders reaching 19.15B yuan, maintaining the top position in the industry. As of 10:50 on April 2, the latest market value of this stock was about 3.14 trillion yuan.

In terms of business segments, the company’s chemical business contributes the absolute revenue volume, with annual revenue of 314B yuan, up 25.52% year-on-year, accounting for over 80% of total revenue. Its growth drivers include three aspects: small molecule drug discovery continuously attracting downstream, strong growth in small molecule process R&D and manufacturing, and TIDES (oligonucleotides and peptides) maintaining rapid growth.

WuXi AppTec explicitly stated in its annual report that, as new capacity is ramped up quarterly in 2024, the TIDES business revenue in 2025 will reach 11.37 billion yuan, up 96.0%. By the end of 2025, backlog orders for TIDES increased by 20.2% year-on-year. TIDES D&M service clients increased by 25%, and the number of molecules served increased by 45%.

Laboratory chemistry, as the starting point and an important component of Kanglong Chemical, covers projects such as small molecule chemicals, oligonucleotides, peptides, antibodies, antibody-drug conjugates (ADC), and cell and gene therapy products. During the reporting period, it achieved operating income of 36.47B yuan, up 15.78% year-on-year; gross profit margin for 2025 was 45.10%, up 0.18 percentage points from last year; new orders in this segment increased by about 12% year-on-year.

Zhaoyan New Drug also stated in its 2025 annual report that the company’s project signing volume for antibodies, small nucleic acids, ADCs, and peptides increased significantly year-on-year, and high-difficulty, long-cycle tests such as non-human primate reproductive toxicity and carcinogenicity tests remained steadily rising.

Regarding the growth logic of the industry, Xiangcai Securities research report pointed out that the growth of the CXO industry in 2025 is not a universal recovery but driven by high-growth tracks such as GLP-1 (weight-loss drugs) and ADCs, reflecting a structural market trend.

Slowing price impact

Since 2023, affected by intensified competition in the domestic CXO industry, the average unit price of new clinical operation orders in China has declined, becoming a major challenge constraining industry profitability. However, looking at the industry performance in 2025, the impact of declining order prices may gradually ease.

WuXi AppTec explicitly stated in its annual report that during the reporting period, WuXi Testing achieved gross profit of 8.16B yuan, with a gross profit margin down 6.32 percentage points from last year, mainly due to market influence and price factors gradually reflected in order conversion; WuXi Biology achieved gross profit of 928 million yuan, with a gross margin down 3.04 percentage points, also mainly due to market price factors.

Tigermed said that during the reporting period, revenue from clinical trial technical services was 1.18B yuan, a slight increase of 2.79% year-on-year. Among them, revenue from domestic innovative drug clinical operations declined slightly due to industry cycles and structural changes. By the end of 2024, the backlog of domestic innovative drug clinical orders decreased compared to previous years, leading to a decline in overall workload for 2025. “However, the average unit price of new domestic clinical trial orders signed in 2025 has stabilized.”

Wanlian Securities research report also pointed out that, with the clearance of tail-end capacity and concentration of orders at leading companies, the previous vicious “price war” in the industry has eased. Leading companies, leveraging technological barriers and service quality, can maintain or even increase service prices, driving profit margin recovery and “value return.”

Order reserves are strong, with many CXO companies showing impressive backlog and new order performance in 2025, providing solid support for performance growth in 2026 and beyond.

As of the end of December 2025, WuXi AppTec’s ongoing business backlog orders reached 58 billion yuan, up 28.8% year-on-year. Based on current backlog and other factors, the company forecasts that total revenue in 2026 will reach 51.3 to 53 billion yuan, with ongoing business revenue increasing by 18% to 22%.

Tigermed stated in its annual report that the average unit price of new signed orders in 2025 has stabilized and is expected to return to growth in 2026; as of the end of the reporting period, the company’s total pending contracts amounted to 18.2 billion yuan, up 15.3% year-on-year.

In 2025, Kanglong Chemical’s new order amount increased by over 14% year-on-year; considering new order performance and business development trends, the company expects full-year revenue growth of 12% to 18% in 2026; Kelun Ying’s backlog orders totaled 3.27B USD, up 31.65% from last year, with rapid growth in chemical large molecules and biological large molecules, laying a solid foundation for further performance acceleration.

Where to go in the future?

From the perspective of long-term industry development, the continuous growth of global pharmaceutical R&D investment provides broad market space for the CXO industry. According to Frost & Sullivan, global pharmaceutical R&D investment is expected to grow from $277.6 billion in 2024 to $476.1 billion in 2034. The global CDMO market size is projected to reach $231 billion by 2030.

Against this backdrop, although geopolitical risks remain a looming threat, internationalization continues to be an important direction for domestic CXO companies to expand. During the reporting period, many leading companies saw steady growth in overseas revenue.

In 2025, WuXi AppTec’s ongoing business revenue reached 43.42 billion yuan, of which revenue from U.S. clients was 31.25 billion yuan, up 34.3%; revenue from European clients was 4.82 billion yuan, down 4.0%; Kanglong Chemical’s revenue from North American clients was 51.3B yuan, up 10.97%, accounting for 61.82% of the company’s revenue; revenue from European clients (including the UK) was 1.39B yuan, up 27.42%, accounting for 20.54%.

Additionally, Tigermed’s overseas main business revenue reached 8.71B yuan, up 2.75%, mainly contributed by overseas clinical services; Kelun Ying’s revenue from overseas markets was 2.9B yuan, up 14.85%.

While promoting international expansion, breakthroughs in artificial intelligence (AI) technology have made technological innovation a key force in driving the transformation and upgrading of the CXO industry and enhancing core competitiveness. The application of AI in pharmaceutical R&D is gradually moving from concept to value realization.

For example, Medisi recently stated during investor research that it has built an integrated innovative technology service platform of “human cell models—AI prediction—organoids,” and has developed a series of important innovative R&D technology platforms such as an AI-based preclinical drug discovery platform, as well as AI ADMET prediction models to improve drug R&D efficiency and success rates.

In fact, many AI pharmaceutical companies are actively partnering with innovative drug companies to promote the application of AI technology in pharmaceutical R&D. For instance, this year, Yingxi Intelligent and Jingtai Technology have reached R&D collaborations with multiple domestic and foreign pharmaceutical companies, gradually revealing the commercial value of AI drug development.

Yingxi Intelligent also explicitly mentioned in its annual report that, aided by the Pharma.AI platform, the average time from target discovery to PCC (preclinical candidate) confirmation for candidate drugs is only 12 to 18 months, significantly shorter than the traditional 4.5 years, demonstrating a clear efficiency advantage. As AI pharmaceutical companies continue to enter the market, the competitive landscape of the CXO industry will also undergo new changes.

Currently, the CXO industry, driven by stable global outsourcing demand and high-growth tracks like GLP-1 drugs, is expected to become a pioneer in reversing the healthcare service sector. However, Xiangcai Securities also pointed out that the industry is experiencing intense differentiation, with resources and orders increasingly concentrated in large leaders like WuXi AppTec, forming a pattern of “CDMO outperforming CRO, large enterprises outperforming small and medium-sized ones.” In this process, industry mergers and acquisitions are accelerating, with leading companies expanding their footprints through acquisitions of smaller firms. In the future, the CXO sector’s market performance may continue to diverge from the innovative drug segment due to its overseas business certainty and the gradual recovery of domestic demand.

(Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk.)

Produced by | 21 Finance Client, 21st Century Business Herald