Key Takeaways:
GenScript Biotech reported first-half revenue of US$404.2 million, up 27.3%, as its AI-enabled drug discovery business doubled year over year.
"Our first-half results reflect strong execution across the portfolio, with our core businesses driving both revenue growth and improved profitability," Sherry Shao, Rotating CEO of GenScript, said.
Goldman Sachs raised its target price to HKD34.24 from HKD17.65 and maintained a Buy rating, saying the results beat expectations. Revenue came in 5% above the broker's forecast, with overall gross margin of 51% versus an expected 45%. Life Science Group revenue reached US$319.0 million, up 28.8%, while ProBio revenue rose 34.2% to US$61.1 million.
Shares surged as much as 6.5% to HKD30.1, a near four-year high, before trading at HKD29.24, up 3.47%. Management raised full-year revenue growth guidance to 25%-30% from 15%-18%, with AI drug discovery order revenue expected to exceed US$100 million in the second half.
The AI-enabled drug discovery business doubled year over year for a third consecutive half-year period, driven by demand from AI-focused biotechnology companies. Gene-to-Protein accounted for about 66% of Life Science Group revenue and remained the primary growth engine. Adjusted operating profit for the segment rose 102.8% to US$94.0 million.
ProBio, the biologics development and manufacturing unit, saw new orders increase 54% and narrowed its adjusted operating loss 22.5% to US$24.3 million. Management raised full-year service revenue growth guidance to 25%-30% from 20%-25% and expects positive adjusted EBITDA by 2027. Bestzyme revenue rose 7.4% to US$30.4 million, with full-year growth guidance trimmed to 8%-10% from 10%-15%.
Goldman revised its 2026-2028 EPS forecasts to -US$0.06, US$0.04 and US$0.09 from -US$0.02, US$0.02 and US$0.05. CICC also raised its target price to HKD32, citing results that beat forecasts.
The guidance raise shows management expects AI-driven drug discovery demand to accelerate. Investors will watch second-half order momentum and whether ProBio reaches positive adjusted EBITDA by 2027.
This article is for informational purposes only and does not constitute investment advice.
