HK Stock Market Move | Early heavy losses of CRO concept stocks, the United States plans to increase investment restriction policies, institutions say short-term impact risks sentiment.

In the early morning session, concept stocks related to contract research organizations (CRO) plummeted. As of press time, WuXi AppTec (02359) fell by 9% to HK$63.7; FRONTAGE (01521) dropped 6.99% to HK$1.33; Pharmaron Beijing (03759) declined by 5.83% to HK$18.1; Hangzhou Tigermed Consulting (03347) fell by 5.7% to HK$36.4. On the news front, on February 21, the White House website released a memorandum on the "America First" investment policy, announcing adjustments to U.S. investment policies with a focus on further restricting two-way investment with China. Soochow pointed out that in the short term, this policy will directly impact the risk sentiment of Chinese technology stocks; in the medium term, attention should be paid to specific measures that may be introduced by the Committee on Foreign Investment in the United States (CFIUS) towards China, as well as whether the U.S.-China tariff negotiations will involve a game plan against this policy and the potential risk of further tariff escalation. It is worth noting that Wuxi Biotech (WUXI BIO) previously announced the sale of assets related to vaccine facilities in Ireland to Merck for a total consideration of approximately US$500 million (about HK$3.9 billion). Citigroup released a research report stating that although WUXI BIO's divestiture of designated overseas facilities aligns with market expectations, some may view the sale of assets as a defensive move against potential geopolitical risks. The bank believes that the transaction involving the Irish vaccine facility will not have a negative financial impact on the company and will improve its overall profitability.