HK Stock Market Move | Concept stocks of CRO continue to rise, and the acceleration of clinical trials of new drugs is good news for CRO companies. Institutions say that the sector has sufficient upward momentum.

CRO concept stocks continue to rise. As of the time of publication, Joinn Laboratories (06127) rose by 13.73% to HK$17.56; Hangzhou Tigermed Consulting (03347) rose by 6.03% to HK$37.8; Asymchem Laboratories (06821) rose by 4.7% to HK$77.9; WUXI BIO (02269) rose by 2.39% to HK$25.75. On the news front, the National Medical Products Administration (NMPA) issued a notice in June proposing to shorten the review and approval time for all applications for innovative drug clinical trials from 60 days to 30 days. HSBC released a research report stating that under the support of policies, the acceleration of new drug clinical trials is a significant positive for Contract Research Organizations (CROs), as the demand for innovative drug clinical trials is shifting to China and the clinical trial industry in China is showing higher efficiency and effectiveness. Xiangcai Securities pointed out that the CXO sector (medical outsourcing services) has significantly lagged behind the innovative drug sector, which has performed well since the beginning of the year. Based on its core position in the industry chain, valuation advantage, signs of a bottoming out in the economic cycle, and expectations for improved liquidity, we believe that the CXO sector has sufficient momentum to catch up, and currently presents significant investment value. CMSC also mentioned that the CXO sector, as a key part of the innovative drug industry chain, has become even more competitive after experiencing a low point in investment and financing as well as bio-secure events.