By Sherry Qin

Shares of WuXi group companies jumped Monday after U.S. President-elect Trump promised to save TikTok and held a call with his counterpart in China, sparking tentative hopes that some areas of U.S.-China tensions could ease.

Chinese contract drug maker WuXi AppTec rose 7.0% in afternoon trade in Hong Kong, on track for its largest daily percentage gain since early December. Its sister company WuXi Biologics rose 4.7%, while WuXi XDC, a contract medical research unit of WuXi Biologics, was up 5.0%.

The WuXi companies have come under scrutiny amid tensions between the U.S. and China. The companies were included in the draft U.S. Biosecure Act that aims to bar federal contracts with the Beijing Genomics Institute and some Chinese biotechnology entities.

As the bill was not enacted under the Biden administration, investors are watching to see what the fate of the legislation--or any potential successor--will be under Trump after he takes office on Monday.

Analysts say Trump's promise on Sunday to save the social media app TikTok owned by China's ByteDance from being banned in the U.S. may have boosted investor confidence toward the WuXi companies.

The move signals "potential improving Sino-U.S. relationships," said Jialin Zhang, head of China healthcare research at Nomura.

Trump's support for the social media app came after the President-elect and Chinese President Xi Jinping held a "very good" phone call on Friday, Trump wrote on social media platform Truth Social. The pair discussed trade, TikTok and other subjects, he said, adding that "we will solve many problems together, and starting immediately."

Wedbush analysts led by Dan Ives said that TikTok's fate could have ripple effects on the much larger and important U.S.-China tariff negotiations set to take place over the coming months.

TikTok is "a chip on the poker table," the analysts said, noting that trade negotiations would get off on the wrong foot if Trump doesn't move to block the banning of the app.

Trump's support for TikTok is giving some the impression that he may be "more pragmatic" in dealing with any perceived national security-related issues in relation to the WuXi companies, Daiwa analyst Wilfred Yuen said.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

January 20, 2025 03:00 ET (08:00 GMT)

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