HK Stock Market Move | GENSCRIPT BIO (01548) rose more than 3%. Institutions pointed out that the company is expected to benefit from the recovery of fundamentals and the improvement of investment sentiment driving valuation repair.

GenScript Bio (01548) rose more than 3%. As of the time of writing, it was up 3.05% to 12.2 Hong Kong dollars, with a trading volume of 41.331 million Hong Kong dollars. BOCOM INTL released a research report pointing out that GenScript Bio is expected to see a significant increase in net profit in 2024 compared to 2023, mainly due to: 1) One-time unrealized gains of approximately 3.2 billion US dollars from the sale of Legend Biotech, exceeding the company's previous estimate of 2-3 billion US dollars; 2) Non-cash losses of 124 million US dollars related to changes in the fair value of Pons Bio preferred shares, mainly from contributions from the Li Xin transaction and macroeconomic improvements. Excluding the impact of these two items, the adjusted net profit of the company's non-cellular business in 2024 compared to 2023 (58.12 million US dollars) remains stable and has not undergone significant changes. The bank predicts that the growth rate of the company's non-cellular business revenue will recover to around 20% in 2025-26, and Legend Biotech is expected to turn losses into profits by 2026, further enhancing profits; therefore, in terms of net profit, GenScript will enter a profit range starting in 2024. The bank pointed out that the fundamental recovery + improvement in investment sentiment drive valuation recovery. On the emotional front, the gradual elimination of short-term disturbances related to geopolitical factors, the implementation of favorable policies for innovative drug payments, and the accelerated overseas expansion of excellent innovative drug assets are expected to catalyze the bottoming out of investment sentiment in the CXO sector. The bank is optimistic about the huge space for the company's valuation to recover.