China CDMOs: Opportunities after recent correction

Bernstein's report on China CDMOs argues that the recent sector correction presents a buying opportunity. Small-molecule and peptide CDMOs appear better positioned than biologics CDMOs, supported by stronger revenue growth, improving backlog coverage and less dependence on early-stage biotech funding. WuXi AppTec remains the clear global share gainer within the chemical and peptide CDMO peer group, while most peers have ceded share or stayed broadly stable. Bernstein keeps WuXi AppTec as its top pick: despite global leadership in peptide revenue and capacity and higher growth than peers, it trades at a discounted forward PE. The Biosecure Act overhang is viewed as overblown, as even a worst-case loss of the DoD lawsuit would not result in material loss of commercial business. For Asymchem, the 1H26 small-molecule CDMO disappointment is seen as a timing rather than a demand issue, supported by strong backlog growth;