Dongguan Securities·2025-09-04 07:33Investment Rating - The report has downgraded the investment rating for the pharmaceutical and biotechnology industry, indicating that most sub-sectors are under performance pressure and suggesting a focus on performance improvement directions [1]. Core Insights - The overall revenue and net profit attributable to the parent company in the pharmaceutical and biotechnology industry saw a decline in H1 2025, with total revenue of 1.23 trillion yuan, down 2.7% year-on-year, and net profit of 99.15 billion yuan, down 3.9% year-on-year [4][13]. - Most sub-sectors experienced a year-on-year decline in performance in H1 2025, with only a few segments like medical R&D outsourcing and other biological products showing positive growth [4][14]. - The investment strategy suggests focusing on innovative drugs and medical devices, highlighting companies such as Heng Rui Medicine, Bei Da Pharmaceutical, and Mindray Medical as potential investment opportunities [4]. Summary by Sections Overall Industry Performance - In H1 2025, the pharmaceutical and biotechnology industry reported total revenue of 1.23 trillion yuan, a decrease of 2.7% year-on-year, and a net profit of 99.15 billion yuan, down 3.9% year-on-year [4][13]. - The industry also saw a decline in non-recurring net profit, which fell by 13.2% year-on-year to 82.67 billion yuan [4]. Sub-sector Performance - Chemical Preparations: Revenue decreased by 3.2% to 271.41 billion yuan, and net profit fell by 7.5% to 25.72 billion yuan in H1 2025 [23][30]. - Traditional Chinese Medicine: Revenue dropped by 5.5% to 178.60 billion yuan, with net profit slightly down by 0.1% to 22.34 billion yuan [32][37]. - Biological Products: Revenue fell by 17.6% to 55.80 billion yuan, and net profit decreased by 31.3% to 6.36 billion yuan [40][45]. - Pharmaceutical Commerce: Revenue was 514.18 billion yuan, a slight decline of 0.2%, while net profit increased by 7.2% to 12.04 billion yuan [49][52]. Investment Strategy - The report recommends focusing on innovative drugs and medical devices, with specific companies highlighted for potential investment, including Heng Rui Medicine, Bei Da Pharmaceutical, and Mindray Medical [4].