Key Takeaways:
GenScript Biotech reported H1 2026 revenue of HKD 404.2 million, up 27.3% from a year earlier, as AI-driven drug discovery demand accelerated across its life science platforms.
"The main challenge in AI-driven drug discovery is no longer generating ideas, but validating them," Rotating CEO Sherry Shao said. "Our Gene-to-Protein platform can now compress turnaround from digital sequence to model-ready data to as fast as four days."
Adjusted net profit rose 203.3% to HKD 62.5 million, while gross profit climbed 48% to HKD 206.7 million. Life Science Group revenue grew 28.8% to HKD 319 million, about 10 percentage points above initial guidance, with adjusted operating profit more than doubling to HKD 94 million. ProBio revenue rose 34.2% to HKD 61.1 million on a comparable basis, with new orders up 54%.
Shares fell 4.23% to $24.88 after the report despite the beat, as investors took profits near the 52-week high of $26.72. CICC raised its target price 78.8% to HKD 32 with an "Outperform" rating, citing stronger-than-expected results and AIDD-driven growth.
The company raised full-year 2026 guidance for both main operating units. Life Science Group now expects revenue growth of 25% to 30%, adjusted gross margin above 55% and adjusted operating margin above 25%. ProBio expects revenue growth of 25% to 30% and positive EBITDA in 2027.
AIDD-related projects carry roughly 20 percentage points higher gross margin than traditional protein expression work, CFO Phil Zhou said, because customers pay a premium for speed and model-ready data. The company expects AIDD orders to double in the second half and maintain hyper-growth over the next several years. About 60 percent of GenScript's labs now run AI-driven automated workstations, and Gene-to-Protein platform ROI surged 1.5 times year over year.
ProBio signed HKD 9.7 million of AIDD-related orders in the first half and delivered HKD 2.5 million in revenue from those programs. The business can advance AI-generated candidates to PCC in as little as four months.
The company plans about US$130 million in full-year capital expenditure, up from US$48.4 million in the first half, to expand automated workstations and global delivery capacity. It holds approximately US$830 million in cash and does not need equity financing, Zhou said.
Competition with Twist Bioscience in gene synthesis is intensifying, but GenScript said it captures more than twice the revenue per delivered item, processes more than 4,000 designs per day and delivered assay variability under 10 percent versus close to 30 percent for Twist in a recent customer evaluation.
The guidance raise signals management expects AI demand to accelerate through 2026. Investors will watch second-half order intake and AIDD margin trends for confirmation that the growth pace is sustainable.
This article is for informational purposes only and does not constitute investment advice.
