中国CDMO：复杂分子驱动下一个十年增长

China CDMO initiation: Complex molecules to drive the nextdecade of growth We initiate coverage on China CDMOs (Contract Development and ManufacturingOrganization) with a positive sector view. Rebecca Liang, Ph.D.+852 2123 2656rebecca.liang@bernsteinsg.com New drug modalities will drive CDMO growth.While small molecules and monoclonalantibodies remain the largest pharmaceutical markets, the fastest growth is shiftingtoward peptides, complex small molecules, ADCs (Antibody-drug conjugates), bispecificantibodies, and other next-generation therapeutics thatgrow above market at 15-20%.These modalities are significantly more difficult to manufacture and require specializedchemistry, biologics, analytical and regulatory capabilities, creating a structural tailwindfor outsourcing and raising barriers to entry. CDMOs with proven expertise in complexmodalities should capture a disproportionate share of future industry growth. AmongChina's leading players, we seeWuXi AppTecas the best-positioned beneficiary givenits leadership in small molecules and peptides,Asymchemas an emerging challengerwith strong momentum in peptides, andWuXi Biologicsas the leading biologics CDMO,particularly in early-stage development. Ellie Li+852 2123 2621ellie.li@bernsteinsg.com China's leading CDMOs have become globalized with broad capacity networksand operational competitiveness.Today, 75-90% of revenue for the leading playerscomes from overseas markets, reflecting deep relationships with top multinationalpharmaceutical companies and global biotechs. To serve these customers, they haveexpanded manufacturing networks across North America, Europe and Asia-Pacific whilecontinuing to invest aggressively in new capacity for biologics, peptides and complexmodalities. In an industry where sustained capital investment is required to remaincompetitive, returns ultimately separate winners from followers. We believeWuXi AppTecstands out as the sector's highest-quality operator, combiningglobal scale withindustry-leading ROIC, superior asset utilization and a demonstrated ability to convertcapacity investments into profitable growth. WuXi AppTec (Outperform, Top Pick)our preferred sector compounder, combining scale,a leading position in small molecules and peptides, and a proven ability to convert early-stage projects into commercial manufacturing opportunities. We expect revenue to growfromCNY45 Bn in 2025 to CNY100 Bn by 2030E, supported by strong exposure to high-growth modalities and industry-leading ROIC. Asymchem (Outperform)offers the strongest growth among our coverage. Following thepost-Paxlovid reset, its small-molecule CDMO business is approaching an inflection pointas backlog growth, commercial manufacturing activity and utilization recover. Combinedwith rapid expansion in peptides, we expect revenue to grow fromCNY7 Bn in 2025 toCNY24 Bn by 2030E. WuXi Biologics (Market-Perform)is China's leading biologics CRDMO and a keybeneficiary of growth in biologics, ADCs and bispecific antibodies. However, its competitiveadvantage is strongest in early-stage development, while leadership in late-stage andcommercial manufacturing remains less differentiated relative to global incumbents. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We rate Wuxi AppTec and Asymchem Outperform; Wuxi Biologics Market-Perform. VALUATION COMPS TABLE Table Of Contents Portfolio manager summary.................................................................................................................................................................................................4New drug modalities fuel CDMO growth; initiating on three top players in China.................................................................................... 4Globalized with Broad Capacity Footprints and surviving (and thriving) through the capex cycle.......................................................6Investment thesis..............................................................................................................................................................................................................9CDMO overview......................................................................................................................................................................................................................11What are CRO / CDMOs?........................................................................................................................................................................................... 11Global CDMO market overview.................................................................................................................................................................................12Top China CDMOs are fully global........................................................................................................................................................................... 17BIOSECU