JPMorgan has released a research note highlighting that GenScript Bio (01548) saw its share price climb over 1% last Friday (11th), bucking the market trend as the Hang Seng Healthcare Index fell 1.4% on the same day. The bank anticipates sustained momentum in AIDD order flow, steady capacity utilization, and faster delivery cycles, leading it to reaffirm an "Overweight" rating with a target price of HK$41.

According to the note, investor appetite for GenScript's AI-driven drug discovery (AIDD) business remains robust. The company announced a placement before market open last Friday, raising HK$2.35 billion, with net proceeds of HK$2.33 billion. These funds are earmarked to expand wet laboratory capacity for AIDD-related operations and accelerate research, development, and digitalization efforts.

JPMorgan maintains a constructive outlook and suggests that recent share price softness could present an opportunity for investors to add positions. Citing management, the bank notes that wet lab validation is currently the primary bottleneck for business growth. Management expects AIDD-related revenue in the second half could double compared to the first half, while the full-year guidance for life sciences revenue growth has been raised to a range of 25% to 30%. Additionally, the company's overall adjusted gross margin exceeds 55%, with adjusted operating margin above 25%.