WuXi Companies' Shares Slide Amid Concerns Over Proposed U.S. Bill
By Sherry Qin
Shares of the WuXi family of companies extended losses Friday amid concerns that a proposed bill in the U.S. would block the U.S. government from doing business with some Chinese biotechnology companies due to alleged military ties.
WuXi AppTec fell 21% to 43.70 Hong Kong dollars (US$5.59) in Hong Kong, its lowest level since 2019. In Shanghai, WuXi AppTec declined by the daily limit of 10%.
Sister company Wuxi Biologics also slid 21% in Hong Kong trade, while WuXi XDC Cayman, a contract medical research unit of Wuxi Biologics, slumped 17%.
U.S. lawmakers introduced a bill last Thursday that aims to bar federal contracts with Beijing Genomics Institute and some Chinese biotech entities due to alleged connections with the People's Liberation Army. The WuXi companies were among those named in the bill.
Although the WuXi companies have denied the findings in the proposed bill, investors aren't fully convinced.
Since the proposed bill, a total of around $20 billion has been wiped out from WuXi AppTec and Wuxi Biologics's combined market capitalization in Hong Kong as of Friday's close.
Investors are "still concerned on the passage of the U.S. bill," said Jialin Zhang, head of China healthcare research at Nomura.
If the bill is passed, that would significantly affect the Wuxi companies, as 65% of Wuxi AppTec's revenue comes from the U.S., according to its first-half results for 2023, said Sonija Li, head of retail research at Maybank.
Even if the bill isn't passed, fears over escalating U.S.-China tensions could rise in the lead-up to the U.S. presidential election later this year, Li added.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
February 02, 2024 04:26 ET (09:26 GMT)
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