WuXi AppTec(SH:603259) Xiangcai Securities·2025-10-12 11:11Investment Rating - The industry rating is maintained as "Buy" [6][10]. Core Views - The recent geopolitical tensions between China and the US have led to a pullback in the medical services sector, but the long-term positive trend remains unchanged due to the strengthening of domestic companies' capabilities in the innovative drug industry [10][64]. - The report emphasizes the importance of company capabilities in driving industry development, suggesting a focus on high-growth areas such as ADC CDMO and peptide CDMO, as well as companies like WuXi AppTec and Haoyuan Pharmaceutical [10][64]. Summary by Sections Industry Performance - The pharmaceutical and biological sector fell by 1.20%, ranking 25th among 31 primary industries [2][12]. - The medical services sub-sector reported a decline of 3.37%, closing at 7156.07 points, which is a significant drop compared to other sub-sectors [24][25]. Company Performance - Notable performers in the medical services sector include Sanbo Brain Science (+3.5%), Meinian Health (+2.8%), and Aier Eye Hospital (+2.6%), while underperformers include Medicy (-8.8%) and Kanglong Chemical (-7.5%) [3][31]. - The report highlights a significant pullback in CXO-related companies [3][31]. Valuation Metrics - The current PE ratio for the medical services sector is 36.92X, with a PB ratio of 3.77X, showing a decrease from the previous week [4][32]. - The PE ratio has fluctuated between a maximum of 41.13X and a minimum of 28.46X over the past year [4][32]. Investment Recommendations - The report suggests focusing on high-growth companies in the medical outsourcing services and those with expected improvements in profitability, particularly in third-party testing laboratories and consumer healthcare sectors like ophthalmology and dentistry [10][64].