BOCOM International·2025-05-15 09:22Industry Rating - The report rates the pharmaceutical industry as "Leading" [1] Core Insights - The impact of U.S. drug price reforms is manageable but still requires observation, with a continued recommendation for innovation and valuation recovery logic [1] - The report highlights that the recent U.S. executive order aims to significantly reduce drug prices, potentially by 59% to 90%, and emphasizes the need for further details on implementation [7] - The optimization of China's centralized procurement policy is seen as more flexible, providing hospitals and companies with greater autonomy, which could benefit leading prescription drug companies [4][6] Summary by Sections Investment Ratings - The report provides a detailed valuation summary for various companies, with most rated as "Buy" and a few as "Neutral" or "Sell" [3][31] Market Performance - The Hang Seng Index rose by 4.2% during the week, while the healthcare index increased by only 0.2%, indicating underperformance relative to the broader market [4][12] - Sub-sectors such as life sciences tools and services (+4.1%) and healthcare technology (+3.9%) performed well, while pharmaceuticals (-1.2%) and healthcare equipment and supplies (-2.6%) lagged [4][12] Company Updates - Several companies reported significant developments, such as: - 百济神州 achieved a quarterly profit with revenue of 8.048 billion RMB, a 50.2% increase year-on-year [9] - 康方生物 released promising Phase III clinical data for its drug, showing a 55% reduction in disease progression risk for advanced nasopharyngeal carcinoma patients [9] - 信达生物 announced a 25% price reduction for its drug, confirming participation in national medical insurance negotiations [9] - 荣昌生物 received approval for a new indication for its HER2 ADC drug targeting metastatic breast cancer [9] Policy Changes - The report discusses key changes in China's centralized procurement policy, emphasizing operational feasibility and flexibility, which could accelerate industry consolidation and benefit quality leading prescription drug companies [6][7] Valuation Metrics - The report provides a comprehensive valuation overview, indicating that the pharmaceutical sector has a TTM P/E ratio of 14.5, while other sectors like life sciences tools and services have lower ratios [21]