(Bloomberg) -- WuXi Biologics Cayman Inc., one of China’s leading drug contract research and manufacturing companies, plunged before it was halted in Hong Kong trading after saying it expects conditions to remain “most challenging” through June.

The stock was down 24% when the bourse suspended trading in late morning “pending the release of an announcement which may constitute inside information of the company.” WuXi Bio’s stock has slid 45% this year amid declines in sales and profit growth.

The industry “faces near-term challenges” as growth slows due to the drop-out of Covid-related sales and a slowdown in biotech funding, WuXi Bio said in a business update. The company — which has supplied ingredients for AstraZeneca Plc’s Covid-19 vaccine — expects a “positive turnaround” in the second half of 2024 and steady growth over the next several years.

“WuXi Biologics’ clients are mostly small biotech companies that were facing clinical research funding challenges due to the high interest rate environment, which ultimately led to slowdown of WuXi’s deal signing in the first half of 2023,” said Yiqi Liu, an analyst at Exome Asset Management LLC.

Among other Chinese contract drug manufacturing stocks, Pharmaron Beijing Co. and Asymchem Laboratories Tianjin Co. each dropped 10% in mainland trading.

Some traders are betting that the slide offers a chance to add positions. The stock’s relative strength index suggests its in oversold territory. 

The most popular option contract on Monday for WuXi Bio was a call option betting the shares to rise above HK$42 by the end of December, recovering most of today’s drop, according to data compiled by Bloomberg. The stock’s trading halted at HK$33.15. 

“We think the correction today is overdone and sets an even better entry point for the investors,” Citigroup Inc. analysts including John Yung and Eva Zhao wrote in a note, adding that the firm’s contract manufacturing organization (CMO) projects are only delayed, and not lost.

--With assistance from Jiyeun Lee.

(Adds details on a call option and a Citi report in last two paragraphs)

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