FAST NEWS: JPMorgan boosts WuXi AppTec stake
The latest: U.S. banking giant JPMorgan purchased 1.57 million Hong Kong-listed shares of WuXi AppTec Co. Ltd. (2359.HK; 603259.SH) for HK$75.33 million ($9.66 million) on Feb. 8, raising its stake in the drug outsourcing services company from 12.86% to 13.27%, 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: JPMorgan’s average share price for this purchase was HK$47.9369, which means it has already lost 12% on the investment, based on WuXi AppTec’s latest price midway through the Friday trading day.
Digging Deeper: Founded in 2000 and listed in Hong Kong and Shanghai in 2018, WuXi AppTec is a provider of 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 WuXi AppTec has also been the source of recent controversy, after several U.S. lawmakers recently proposed legislation that could ban federal agencies and federally funded institutions from buying the company’s devices and services.
Market Reaction: WuXi AppTec shares rose in early trading on Friday and closed up 5.9% at HK$41.35 by the midday break. Despite that, the shares still trade close to their 52-week low.
Translation by A. Au
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