FAST NEWS: BlackRock boosts stake in battered WuXi AppTec
The latest: Asset management company BlackRock Inc. purchased 618,000 Hong Kong-listed shares of WuXi AppTec Co. Ltd. (2359.HK; 603259.SH) on March 26, raising its stake in the drug outsourcing services company from 5.99% to 6.15%, according to a new Hong Kong Stock Exchange filing.
Looking up: Such an increase by a major institutional buyer is usually a favorable sign, implying the investor is positive on the company’s prospects and believes the stock may have some upside.
Take Note: BlackRock did not disclose the average price per share for its latest purchases. But it may have already lost money on the purchases, based on a decline in the stock’s price between March 26 and the latest trading levels this week.
Digging Deeper: Founded in 2000 and listed in Hong Kong and Shanghai in 2018, WuXi AppTec provides pharmaceutical outsourcing services (CXO) covering the entire industry chain from drug discovery to commercialization. The company has steadily expanded its business in recent years and recorded 15 consecutive quarters of year-on-year revenue growth through the third quarter of last year, drawing on growing demand for its R&D and manufacturing services both at home and overseas. But the company has recently come under fire from U.S. politicians who want to ban government-backed projects from buying its services, causing the stock to lose about half of its value this year.
Market Reaction: WuXi AppTec shares rose in early trading on Wednesday and closed up 2.3% at HK$37.6 by the midday break. The stock now trades near the lower end of its 52-week range.
Translation by A. Au
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