SINO BIOPHARM(HK:01177) Hua Yuan Zheng Quan·2026-02-01 10:43Investment Rating - The report maintains a "Positive" investment rating for the pharmaceutical industry [4] Core Viewpoints - The Chinese biopharmaceutical sector is expected to enter a new era of innovative drug exports in 2026, with significant opportunities arising from strategic acquisitions and internal research and development [3][8] - The report emphasizes the importance of selecting strong fundamental innovative drug stocks that have undergone sufficient adjustments, as well as actively monitoring new medical technologies and companies poised for recovery in 2026 [4][41] Summary by Sections Industry Performance - From January 26 to January 30, the pharmaceutical index fell by 3.31%, underperforming the CSI 300 index by 3.39%. Notably, the market has seen a significant adjustment in the innovative drug sector since August 2025, with the lowest holdings in active funds since 2021 [5][21] - The report highlights that 58 stocks rose while 407 stocks fell during the week, with notable gainers including Cap Bio (+26.49%) and Hualan Biological (+12.80%) [5][22] Company Insights - China Biopharmaceutical is enhancing its core competitiveness through strategic acquisitions and self-research, which is expected to lead to more opportunities for international expansion. The acquisition of Hegia in January 2026 and Lixin Pharmaceutical in July 2025 are key moves to strengthen its pipeline in chronic diseases and oncology [8][13] - The report identifies Hegia's siRNA delivery technology as a significant advancement, allowing for long-lasting treatment options in chronic diseases, while Lixin's unique LM-TME platform is expected to enhance the company's capabilities in oncology [9][11][14] Investment Recommendations - The report suggests focusing on innovative drug companies such as Heng Rui Medicine, Xin Li Tai, and China Biopharmaceutical, as well as companies involved in new medical technologies like AI healthcare and brain-computer interfaces [41][43] - It also highlights the potential for recovery in the medical device and pharmaceutical manufacturing sectors in 2026, recommending stocks that are currently undervalued [41][42] Market Trends - The report notes that the Chinese pharmaceutical industry has completed a transition from generic to innovative drugs, with companies like Heng Rui Medicine and China Biopharmaceutical leading the way in innovation [41][42] - The aging population and increasing healthcare demands are expected to drive growth in the sector, supported by a stable increase in medical insurance revenues and the development of a multi-tiered payment system [41][42]