‘Winning Streak’ GenScript Biotech (01548) is a globally leading life sciences R&D service platform, with operations covering gene synthesis, biopharmaceutical R&D services, AI-driven drug discovery validation, and cell and gene therapy CDMO. Entering 2026, the company is benefiting from three major catalysts: accelerated earnings recovery, the explosive emergence of AI-based business models, and value re-rating from subsidiary spin-offs, positioning it as a high-growth choice within Hong Kong's biotech sector.
First, the company is deeply benefiting from the global AIDD (AI-driven drug discovery) wave. AIDD represents the core trend in biotechnology today, where AI rapidly performs virtual screening of drug molecules, proteins, and antibody sequences. However, all AI-generated designs require real-world wet-lab biological validation to become viable. In September 2026, GenScript formally entered a deep collaboration with multinational pharma giant Eli Lilly’s TuneLab AI drug platform, providing core services such as protein expression, sequence verification, and experimental data feedback. Unlike most AI drug companies that only possess algorithms, GenScript boasts world-class experimental execution capacity, making it a rare "water seller" in the AI drug development space. As global investment in AI-driven drug R&D continues to rise, GenScript’s AIDD-related orders maintain a doubling growth trend, becoming the most critical growth driver over the coming years.
Second, GenScript’s interim 2026 results significantly exceeded expectations. The company achieved revenue of USD 404 million in the first half of the year, representing a 27.3% year-on-year increase; gross profit surged 48% year-on-year, with a notable improvement in gross margin; adjusted net profit jumped 203.3% year-on-year, demonstrating exceptionally strong profitability improvement. The core Life Science segment generated USD 319 million in revenue, accounting for nearly 80% of total revenue and growing 28.8% year-on-year, with segment gross margin rising from 51% to 57.8%. The revenue growth was primarily driven by the recovery in global biopharmaceutical R&D demand, improved capacity utilization, and an increasing proportion of high-margin AI R&D service orders. Management has also issued a positive full-year outlook, expecting continued growth in core business revenue and gross margin, marking the company’s official entry into a phase of simultaneous high growth in scale and profitability.
Overall, the company has successfully transformed from a traditional bioreagent service provider into a core supporting platform for AI-driven new drug development, offering broad future growth potential. As AI-driven drug discovery continues to penetrate, orders keep materializing, and the spin-off process advances, the company is well-positioned to experience concurrent growth in both earnings and valuation, demonstrating notable investment appeal. The company’s stock price has recently risen sharply; investors may consider accumulating around the HK$40 level, with a target of HK$45 and a stop-loss below HK$37. {Henry Lien, Council Member, Hong Kong Society of Financial Analysts}
*The author does not hold the aforementioned stocks
*Articles published in <ETNet>, whether signed or unsigned, represent the authors’ personal opinions and do not reflect the position of <ETNet>. <ETNet> serves as a platform providing free expression of views.
First, the company is deeply benefiting from the global AIDD (AI-driven drug discovery) wave. AIDD represents the core trend in biotechnology today, where AI rapidly performs virtual screening of drug molecules, proteins, and antibody sequences. However, all AI-generated designs require real-world wet-lab biological validation to become viable. In September 2026, GenScript formally entered a deep collaboration with multinational pharma giant Eli Lilly’s TuneLab AI drug platform, providing core services such as protein expression, sequence verification, and experimental data feedback. Unlike most AI drug companies that only possess algorithms, GenScript boasts world-class experimental execution capacity, making it a rare "water seller" in the AI drug development space. As global investment in AI-driven drug R&D continues to rise, GenScript’s AIDD-related orders maintain a doubling growth trend, becoming the most critical growth driver over the coming years.
Second, GenScript’s interim 2026 results significantly exceeded expectations. The company achieved revenue of USD 404 million in the first half of the year, representing a 27.3% year-on-year increase; gross profit surged 48% year-on-year, with a notable improvement in gross margin; adjusted net profit jumped 203.3% year-on-year, demonstrating exceptionally strong profitability improvement. The core Life Science segment generated USD 319 million in revenue, accounting for nearly 80% of total revenue and growing 28.8% year-on-year, with segment gross margin rising from 51% to 57.8%. The revenue growth was primarily driven by the recovery in global biopharmaceutical R&D demand, improved capacity utilization, and an increasing proportion of high-margin AI R&D service orders. Management has also issued a positive full-year outlook, expecting continued growth in core business revenue and gross margin, marking the company’s official entry into a phase of simultaneous high growth in scale and profitability.
Overall, the company has successfully transformed from a traditional bioreagent service provider into a core supporting platform for AI-driven new drug development, offering broad future growth potential. As AI-driven drug discovery continues to penetrate, orders keep materializing, and the spin-off process advances, the company is well-positioned to experience concurrent growth in both earnings and valuation, demonstrating notable investment appeal. The company’s stock price has recently risen sharply; investors may consider accumulating around the HK$40 level, with a target of HK$45 and a stop-loss below HK$37. {Henry Lien, Council Member, Hong Kong Society of Financial Analysts}
*The author does not hold the aforementioned stocks
*Articles published in <ETNet>, whether signed or unsigned, represent the authors’ personal opinions and do not reflect the position of <ETNet>. <ETNet> serves as a platform providing free expression of views.
