2025-05-13 10:35Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical sector, specifically for innovative drugs, CXO, domestic replacement of innovative devices, and consumer healthcare recovery [1][3]. Core Insights - The report emphasizes the continuous recommendation of innovative drugs, maintaining "Outperform" ratings for companies such as Jiangsu Heng Rui Medicine, Huadong Medicine, Hansoh Pharmaceutical Group, Betta Pharmaceuticals, Shenzhen Salubris Pharmaceuticals, Sichuan Kelun Pharmaceutical, Remegen, PATEO, and CSPC Pharmaceutical Group [7][28]. - The report highlights the successful progress of Jiangsu Heng Rui Medicine's Hong Kong listing, which is expected to catalyze the innovative drug market. In 2024, innovative drug sales reached RMB 13.89 billion, a 31% year-on-year increase, accounting for nearly half of the company's total revenue [3][28]. - The report notes that the pharmaceutical sector underperformed the market in the first week of May 2025, with the Shanghai Composite Index rising by 1.9% while the SW Pharma Bio index increased by only 1.0% [10][28]. - The report identifies the best-performing subsectors within the pharmaceutical industry, including medical equipment (+1.7%), traditional Chinese medicine (+1.5%), and biologics (+1.1%) [16][28]. - The report indicates that the premium of the pharmaceutical sector over the A-shares market is currently at a normal level, with a relative premium rate of 79.18% as of May 9, 2025 [20][28]. Summary by Sections Section 1: Continuous Recommendation of Innovative Drugs, CXO, Domestic Replacement of Devices, and Consumer Healthcare Recovery - The report continues to recommend innovative drugs with an "Outperform" rating for several key companies, including Jiangsu Heng Rui Medicine, Huadong Medicine, Hansoh Pharmaceutical Group, and others [7][28]. Section 2: Performance of the Pharmaceutical Sector in Early May 2025 - The pharmaceutical sector's performance was weaker than the overall market, with specific subsectors showing varying degrees of growth [10][28].