EBSCN·2025-11-05 05:05Investment Rating - The report maintains an "Overweight" rating for the pharmaceutical and biotechnology industry [5]. Core Insights - The innovative drug and CXO sectors have shown strong performance, while the medical device sector is expected to continue its recovery [1]. - In the first three quarters of 2025, the pharmaceutical and biotechnology sector achieved revenues of CNY 18,257.4 billion (down 1.97% year-on-year) and a net profit of CNY 1,396.6 billion (down 1.59% year-on-year) [1]. - The third quarter of 2025 saw revenues of CNY 5,985.4 billion (up 0.78% year-on-year) and a net profit of CNY 405.1 billion (up 7.67% year-on-year) [1]. - The overall gross profit margin for the pharmaceutical sector was 31.4% (down 1.4 percentage points year-on-year) [1]. Summary by Sections Chemical Preparations Sector - In Q3 2025, the chemical preparations sector experienced a revenue decline of 0.82% year-on-year, but net profit increased by 5.05% [2]. - The growth is attributed to strong performance from leading innovative drug companies and increased sales from BD transactions [2]. Medical Devices Sector - The medical devices sector saw a significant revenue increase of 10.65% year-on-year in Q3 2025, reflecting a recovery in domestic bidding [2]. - The medical consumables sector faced challenges with a revenue decline of 0.50% due to policy impacts [2]. Medical Services Sector - The CXO sub-sector showed robust performance with a revenue increase of 10.93% year-on-year and a net profit increase of 47.90% in Q3 2025 [2]. - The hospital sector, however, faced pressure with a revenue decline of 1.19% and a net profit decline of 18.51% [2]. Fund Holdings in Pharmaceuticals - In Q3 2025, the proportion of public fund holdings in pharmaceuticals decreased to 11.93%, down 0.32 percentage points from the previous quarter [3]. - The top 20 stocks held by funds primarily include traditional pharmaceuticals, innovative drugs, and CXO sectors [3]. Investment Recommendations - The report recommends focusing on the innovative drug industry chain and innovative medical devices, highlighting specific companies such as BeiGene, WuXi AppTec, and Mindray Medical [3].