The biggest news in the morning market is that the pharmaceutical giant "WuXi" fell sharply.
In the early trading of February 8, the CXO sector opened lower, and wuXi AppTec, which was listed on the A-share market, opened with a flash crash and a stop, with the latest stock price of 94.05 yuan per share and a market value of 270.1 billion yuan.
Hong Kong-listed WuXi Biologics fell by about 25% after the opening of the morning market, down more than 30% at one point during the session, and has suspended trading in Hong Kong, with its share price falling 22.77% before the suspension to HK$62.25 per share price.
Kang LongHuacheng, Kai Laiying, Zhao Yan New Drugs and so on also suffered a sharp decline.
CXO concept quotes (Source: Snowball)
The sudden flash crash stemmed from a breaking news in the United States.
The U.S. government added 33 Chinese entities to the Commerce Department's Unverified List on the 7th, imposing new restrictions on the acquisition of products from U.S. exporters by these entities and requiring additional investigations by U.S. companies that wish to do business with these Chinese companies.
In this "Unverified List (UVL)", CDMO companies WuXi Biologics and WuXi Biologics (Shanghai) are listed. Public information shows that WuXi AppTec and WuXi Biologics are the same actual controller.
According to WuXi Biologics' latest revenue structure, the revenue of the United States region accounts for nearly 50%, and the proportion of China is only 26.35%, which is extremely dependent on overseas markets.
In this regard, WuXi AppTec issued a clarification announcement:
WuXi AppTec Announcement (Source: WuXi AppTec official website)
WuXi Biologics also responded to being included in the U.S. Department of Commerce's "Unverified List," saying: "We understand that the reason for this action is that U.S. government agencies failed to conduct the necessary end-use verifications to export certain equipment from U.S. suppliers." The "unverified list" is not the more well-known U.S. "entity list" or "blacklist"... In the past 10 years, the company has always obtained relevant approvals, and the main reason for being listed in UCL is that the new crown epidemic blocking investigation, the US Department of Commerce can not come to China for inspection. UVL and the entity list mentioned at the end of last year are completely different concepts with limited impact on the company. The firm's team of lawyers in the U.S. is currently working urgently to negotiate with the U.S. Department of Commerce.
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