Ge Long Hui·2025-12-19 03:05Core Viewpoint - The report from JPMorgan indicates that despite a recent downturn in the mainland healthcare sector due to national medical insurance drug price negotiations and subsequent profit-taking, the fundamental outlook for the industry remains unchanged, presenting a good entry opportunity for 2026 [1] Group 1: Industry Outlook - The healthcare sector experienced a decline in September and October, but JPMorgan believes this weakness provides a favorable entry point for investors looking towards 2026 [1] - The trend of innovative drug licensing is expected to continue, with multiple potential targets and drug forms anticipated to bring new licensing opportunities in the coming year [1] - Geopolitical concerns regarding China's pharmaceutical research outsourcing industry (CXO) are believed to have peaked, and a stable medical policy environment is expected to support innovation [1] Group 2: Market Recovery - A more moderate approach to drug volume procurement is expected to drive a recovery in the medical device and diagnostics sectors [1] Group 3: Stock Preferences - JPMorgan favors biotechnology and CXO stocks, specifically highlighting Innovent Biologics, Kelun-Biotech, WuXi AppTec H-shares, WuXi AppTec A-shares, and WuXi Biologics as preferred picks [1] - The target price for Innovent Biologics has been slightly raised from HKD 110 to HKD 111, while WuXi Biologics' target price has increased from HKD 74 to HKD 82, with both stocks rated as "Overweight" [1]