Citi: AI drug discovery is the next major trend in the industry; it gives INSilico (03696) a "Buy" rating.

Citigroup has released a research report stating that AI-driven drug discovery (AIDD) in China is accelerating, and the speed and cost advantages brought by AI have attracted significant attention from investors. Market research agencies suggest that global pharmaceutical R&D investment is estimated to be around $313 billion by 2026, with the penetration rate of AIDD at approximately 6%. The firm believes there is substantial growth potential in the industry and predicts that the global AI drug discovery ecosystem could reach around $50 billion by 2030, mainly focused on three areas: data generation, wet lab validation, and AI-native discovery. Citigroup views INSILICO (03696) as a hybrid company combining both platform and pipeline capabilities. Its proprietary AIDD platform can continuously generate "higher quality and differentiated" clinical assets and create exponential value. The firm maintains a "buy" rating for INSILICO with a target price of HKD 85 and ranks it as a top pick in the industry. Regarding XTALPI (02228), Citigroup has given an initial target price of HKD 8. The firm believes that the companys business combines physical AI, Siasun Robot & Automation experiments, and intelligent orchestration, but its product pipeline depth is limited, and commercial output still needs verification.