Group 1 - The QDII funds have shown impressive performance since 2025, with an average net value increase of 27.9%, particularly driven by funds heavily invested in Hong Kong innovative pharmaceuticals [2] - Notable funds such as Huatai-PB Korea Semiconductor ETF and E Fund Global Growth Select Mixed A have seen net value increases of 127.55% and 102.91% respectively, with several other funds also exceeding 80% growth [2] - The top holdings of these high-performing funds predominantly include Hong Kong innovative pharmaceutical stocks, with examples like Kelun-Botai Biotech and Innovent Biologics among the top five holdings of Huatai-PB Hong Kong Advantage Select Mixed A [2] Group 2 - The technology sector is also a key focus for many high-performing products, with E Fund Global Growth Select Mixed A holding major global tech stocks such as TSMC and Google-A among its top ten holdings [3] - Fund managers express optimism for the future of the innovative pharmaceutical and technology sectors, citing a recent phase of adjustment in the innovative drug industry as a temporary market sentiment issue rather than a fundamental change [4][5] - The innovative drug sector's valuation has become attractive, with expectations of upward potential, and the industry is anticipated to show resilience and technological attributes over the next 2 to 3 years [5] Group 3 - The pharmaceutical industry is expected to see positive changes in 2026, with contract development organizations (CXO) gaining confidence from solid data, and new technologies like artificial intelligence and brain-machine interfaces opening new application scenarios [5] - The semiconductor sector, particularly in storage, is projected to continue its cycle, with local market trends favoring leading storage manufacturers and potential IPOs supporting capacity expansion [6]

Investment Rating - The report maintains an "Overweight" rating for the innovative pharmaceutical and medical device industry chain [5][7]. Core Viewpoints - Continuous support policies are being implemented, which are expected to benefit innovative surgical projects and retail pharmacy chains [2][5]. - The report highlights the high growth potential in innovative pharmaceuticals, recommending companies such as Heng Rui Medicine, Hansoh Pharmaceutical, Sanofi, Kelun Pharmaceutical, and Enhua Pharmaceutical for overweight ratings [5][7]. - The report also emphasizes the recovery of the CXO and upstream pharmaceutical sectors, recommending companies like WuXi AppTec, WuXi Biologics, and others for overweight ratings [5][7]. Summary by Sections Innovative Pharmaceuticals and Medical Devices - The report continues to recommend the innovative pharmaceutical sector, indicating a potential revaluation of companies like Heng Rui Medicine and others [5][7]. - It highlights the gradual realization of innovative pipelines and the performance growth of Biopharma/Biotech companies, maintaining overweight ratings for several key players [5][7]. Market Performance - In the fourth week of January 2026, the A-share pharmaceutical sector underperformed the broader market, with the SW pharmaceutical and biological index declining by 0.4% compared to a 0.8% increase in the Shanghai Composite Index [9][14]. - The report notes that the pharmaceutical sector's premium level relative to the entire A-share market is currently at a normal level, with a relative premium rate of 65.4% as of January 23, 2026 [14][18]. Stock Recommendations - The report provides a detailed earnings forecast and valuation for various companies, maintaining overweight ratings for multiple firms across different segments, including innovative pharmaceuticals, medical devices, and consumer healthcare [8][5].

Investment Rating - The industry investment rating is maintained at "Overweight" [2] Core Insights - The report highlights that the pharmaceutical sector is showing resilience, with a focus on capturing opportunities from companies that can deliver on their growth potential. The report suggests that investors should continue to allocate to pharmaceutical bottom assets as fund holdings have returned to a low level [3][10] - The report indicates that the A-share funds' top ten holdings in the pharmaceutical sector account for 9.15%, a decrease of 1.93 percentage points from the previous period. Excluding pharmaceutical funds, the allocation drops to 3.43%, down 1.39 percentage points [3][10] - The report emphasizes the strong performance of certain pharmaceutical companies, particularly in innovative drugs and upstream life sciences, with notable profit growth forecasts for companies like Zhaoyan New Drug and Kangchen Pharmaceutical [3][10] Summary by Sections Market Dynamics - The pharmaceutical sector has outperformed the broader market, with a return of 6.66% compared to the CSI 300's 1.57% since the beginning of 2026, indicating a 5.10 percentage point advantage [14] - Recent performance shows a mixed trend, with pharmaceutical commercial, traditional Chinese medicine, and medical devices showing positive growth, while chemical pharmaceuticals and medical services have declined [10][14] Valuation Metrics - The current valuation of the pharmaceutical sector is at 23.3 times PE based on 2026 earnings forecasts, which is a premium of 11.3% compared to the overall A-share market (excluding financials) at approximately 21.0 times PE [17] - Using the TTM valuation method, the pharmaceutical sector is valued at 30.3 times PE, which is below its historical average of 34.9 times PE, indicating a relative premium of 11.2% over the broader market [17] Recommended Stocks - Key recommended stocks include WuXi Biologics, Sangfor Technologies, Tigermed, and others, with an average increase of 13.41% in January, outperforming the pharmaceutical sector by 6.74 percentage points [26][27] - The report notes that the top ten pharmaceutical stocks held by public funds include companies like Hengrui Medicine and WuXi AppTec, with a strong preference for innovative drugs and leading players in niche markets [3][10]

Market Performance - After a six-day decline, the Hong Kong Stock Connect Innovation Drug ETF (520880) rebounded on January 23, rising over 2% at one point and closing up 1.53% with a trading volume of 348 million yuan [1][6] - Major constituent stocks such as Cloudtop New Drug led the gain with an 8.2% increase, while other key stocks like Kangfang Biotech and Shiyao Group also saw positive performance [1][6] Policy Impact - On January 22, the Ministry of Commerce and nine other departments issued a document promoting high-quality development in the pharmaceutical retail sector, encouraging innovative drugs and reference preparations to enter retail pharmacy sales channels [3][9] - This policy is expected to provide a pathway for high-value innovative drugs, such as CAR-T, to fill the insurance coverage gap through commercial insurance directories [3][9] - The insurance industry association estimates that by 2025, the total compensation amount for innovative drugs and devices from commercial health insurance will reach approximately 14.7 billion yuan, with a compound annual growth rate of 70% over four consecutive years [3][9] Industry Trends - At the recent JPM conference, Chinese pharmaceutical companies showcased technological breakthroughs in areas such as ADC, IO dual antibodies, and GLP-1, moving towards global markets through licensing and collaborative development [3][9] - According to CITIC Securities, the Chinese pharmaceutical industry is at the starting point of a global value reassessment, with 2026 being a critical year for validating transformation effectiveness [3][9] Investment Opportunities - The Hong Kong Stock Connect Innovation Drug ETF (520880) is highlighted as a high-elasticity T+0 investment tool, with its index featuring three unique advantages: 1. Purely innovative drugs with 100% purity, covering companies focused on drug development [5][11] 2. A significant concentration of leading companies, with the top ten innovative drug leaders accounting for over 73% of the index [5][11] 3. Enhanced risk control through forced de-weighting of less liquid constituent stocks [5][11] Constituent Stocks - The top ten constituent stocks of the Hong Kong Stock Connect Innovation Drug ETF (520880) have a combined weight of 73.41%, showcasing significant leadership in the sector [6][12] - Notable stocks include: - Kangfang Biotech (10.49% weight, market cap of 110.9 billion HKD) - Baijie Shenzhou (10.01% weight, market cap of 312 billion HKD) - Shiyao Group (9.97% weight, market cap of 102.1 billion HKD) [6][12]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The pharmaceutical and biotechnology sector is expected to experience a cyclical recovery in raw material prices for animal health products in 2026, following a prolonged decline due to oversupply and weak downstream demand [5][49] - Heparin and iodine contrast agent raw materials are currently at the bottom of their price cycles, with heparin prices declining sharply in Q4 2023 due to market pressures, while iodine prices have seen a recent recovery driven by strong demand from other industries [6][51] Summary by Sections Industry Trends - The pharmaceutical and biotechnology sector saw a decline of 0.39% in the third week of January 2026, outperforming the CSI 300 index by 0.23 percentage points, ranking 27th among 31 sub-industries [7][58] - The offline pharmacy segment experienced the highest increase, rising by 9.66%, while the medical research outsourcing segment faced the largest decline, dropping by 3.96% [7][61] Price Trends - The average price of florfenicol has decreased from the range of 400-700 RMB/kg to a recent range of 100-200 RMB/kg, indicating a significant drop to historical lows [5][47] - Heparin API prices are stabilizing, while iodine raw material prices are expected to rise in 2025 due to previous supply constraints [51][55] Recommended Stocks - Monthly recommended stocks include WuXi AppTec, 3SBio, and CSPC Pharmaceutical Group, among others [8] - Weekly recommended stocks include Kanglong Chemical, WuXi AppTec, and Aopumai [8]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The pharmaceutical and biotechnology sector is expected to experience a cyclical recovery in raw material prices for animal health products in 2026, following a prolonged decline due to oversupply and weak downstream demand [5][49] - Heparin and iodine contrast agent raw materials are currently at the bottom of their price cycles, with heparin prices declining sharply in Q4 2023 due to market pressures, while iodine prices have seen a recent recovery driven by strong demand from other industries [6][51] Summary by Sections Industry Trends - The pharmaceutical and biotechnology sector saw a decline of 0.39% in the third week of January 2026, outperforming the CSI 300 index by 0.23 percentage points, ranking 27th among 31 sub-industries [7][58] - The offline pharmacy segment experienced the highest increase, rising by 9.66%, while the medical research outsourcing segment faced the largest decline, dropping by 3.96% [7][61] Price Trends - The average price of florfenicol has decreased from the range of 400-700 RMB/kg to a recent range of 100-200 RMB/kg, indicating a significant drop to historical lows [5][47] - Heparin raw material prices have stabilized after a period of decline, while iodine raw material prices are expected to rise again in 2025 due to increased demand [51][55] Recommended Stocks - Monthly recommended stocks include WuXi AppTec, 3SBio, and CSPC Pharmaceutical Group, while weekly recommendations feature companies like Kanglong Chemical and Yao Ming He Lian [8]

在这一年的交易热潮中，跨国巨头们的采购风格各有不同。谁出手频次最高？谁手笔最大？经济观 察报分析了全年150多笔交易，复盘跨国药企的投资画像与交易特色。 多位受访者对经济观察报表示，其所在药企与潜在合作方达成了进一步沟通意向，他们判断2026 年中国创新药对外授权交易热仍会持续。 2025年爆发式增长的对外授权交易验证了中国创新药资产的价值，该年对外授权总交易额超1300 亿美元，交易数超150笔（约占全球40%），创下历史新高。 阿斯利康最活跃 在交易频次上，阿斯利康是最活跃的跨国药企，2025年一共出手了5次。 合作方包括石药集团（01093.HK）、和铂医药（02142.HK）、加科思药业（01167.HK）、元 思生肽等。其中，在2025年6月与石药集团达成的潜在总交易额超53亿美元的合作，可排进年度 交易额前四。在资产选择上，阿斯利康主要集中在临床早期管线，以及技术平台合作。 在交易频次上，阿斯利康是最活跃的跨国药企，2025年一共 出手了5次。从立即兑现的首付款看，辉瑞与武田制药出手最 阔绰。 作者：张英 封图：图虫创意 作为中国市场销售额最高的外资药企，在经历2024年的公司治理风暴后，阿斯利康 ...

Core Insights - The 2026 JPMorgan Healthcare Conference highlighted significant interest from multinational companies in Chinese assets, particularly in the innovative drug sector [1][2] Group 1: Market Trends - The trend of foreign licensing deals for Chinese innovative drugs is expected to continue in 2026, following a record-breaking year in 2025 where the total licensing deal value exceeded $130 billion, accounting for approximately 40% of global transactions [3] - The surge in licensing deals in 2025 validated the value of Chinese innovative drug assets, with over 150 transactions recorded [3] Group 2: Key Players - AstraZeneca emerged as the most active multinational company in 2025, engaging in five transactions, including a notable deal with CSPC Pharmaceutical Group valued at over $5.3 billion [4] - Pfizer and Eli Lilly each conducted four transactions, with Pfizer's deal with 3SBio setting a record for upfront payments in Chinese innovative drugs at $1.25 billion [5] - GSK's collaboration with Heng Rui Medicine reached a potential total of $12.5 billion, marking the highest deal value for Chinese innovative drugs [13] Group 3: Emerging Markets - Interest in Chinese innovative drugs is not limited to Western companies; firms from India, Latin America, and the Middle East are also engaging in licensing deals [7] - Indian companies Glenmark and Dr. Reddy's each completed two business development transactions in 2025, with Glenmark's deals totaling over $2 billion [8][9] Group 4: Financial Highlights - Three companies, AstraZeneca, GSK, and Takeda, signed contracts exceeding $10 billion, while Pfizer and Novartis secured contracts over $5 billion [10] - The largest single transaction was GSK's deal with Heng Rui Medicine, which included rights to one core drug and options for 11 additional projects [13] Group 5: Future Outlook - Executives at the 2026 JPM conference expressed that Chinese assets are an effective way to supplement pipelines, indicating a shift towards acquiring entire biotechnology platforms rather than just single products [14]

Core Viewpoint - The efficiency of Chinese innovative pharmaceutical companies in research and development is putting pressure on American firms, leading to a shift in strategy where multinational companies are cutting internal R&D budgets to invest in Chinese companies' pipelines [1][7]. Group 1: JPM Conference Insights - The 2026 JPM conference saw a significant presence of Chinese innovative pharmaceutical executives and investors, reflecting a positive outlook compared to previous years, with multinational companies openly expressing interest in Chinese assets [2][4]. - Chinese companies are no longer satisfied with merely licensing patents; they seek deeper involvement in clinical development and commercialization in international markets [3][10]. - The FDA's officials acknowledged the R&D efficiency of Chinese companies and suggested using AI to improve approval processes, indicating a more collaborative approach rather than a protectionist stance [3][6]. Group 2: Market Trends and Stock Performance - Following a surge in business development (BD) transactions in 2025, the stock prices of Chinese innovative pharmaceutical companies saw a significant increase, but there was a market correction starting in September 2025, with the Hang Seng Innovation Drug Index dropping over 20% by January 2026 [3][12]. - The participation of seven Chinese pharmaceutical companies in the main stage of JPM is a sign of increasing recognition and influence in the international market [12]. Group 3: Strategic Shifts in Collaboration - There is a growing trend among Chinese pharmaceutical companies to engage in deeper collaborations, such as the NewCo model, which allows for shared operations and deeper partnerships with American firms [10][11]. - American biotech companies are considering establishing NewCo in China to leverage the country's advantages in R&D efficiency and cost [11]. Group 4: Competitive Landscape and Future Outlook - The competitive landscape is shifting, with Chinese companies focusing on unmet clinical needs and exploring new therapeutic areas beyond traditional targets, such as liver diseases [11]. - Multinational companies are actively seeking new opportunities due to impending patent cliffs, with significant interest in mergers and acquisitions to bolster their pipelines [14][15]. - PwC's report indicates that patent expirations could risk $47 billion in drug sales over the next four years, prompting increased acquisition activities in the pharmaceutical sector [16].

Core Insights - The 2026 JPM conference showcased a positive outlook for Chinese innovative pharmaceutical companies, with significant interest from multinational corporations in collaboration opportunities [2][3][4] - Chinese companies are shifting from merely licensing patents to deeper involvement in clinical development and commercialization in international markets [3][8] - The FDA's stance at JPM was relatively moderate, acknowledging the R&D efficiency of Chinese companies and suggesting improvements in approval processes using AI [3][6] Group 1: Conference Overview - The JPM conference, held in San Francisco, attracted numerous founders, executives, and investors from Chinese innovative pharmaceutical companies, indicating a vibrant atmosphere compared to previous years [2][5] - The event has evolved from a small gathering to a major industry benchmark, with participation from nearly all multinational pharmaceutical companies [5][10] - The number of attendees increased significantly in 2026, reflecting a more optimistic market sentiment compared to the previous year [5][10] Group 2: Market Trends - The Chinese innovative drug sector experienced a substantial stock price increase from March to August 2025, driven by business development (BD) transactions and foreign capital inflow, but faced a market correction afterward [4][11] - The interest in Chinese assets is growing, with many multinational companies expressing intentions for mergers and acquisitions (M&A) and BD transactions [11][12] - The trend of Chinese companies seeking deeper engagement in global markets is evident, moving beyond simple patent licensing to collaborative operational models [8][9] Group 3: Regulatory Environment - FDA officials at JPM highlighted the efficiency of Chinese clinical trials, with China completing Phase I trials in four weeks compared to much longer timelines in the U.S. [6][12] - The FDA's comments suggested a focus on optimizing clinical trial approval processes rather than emphasizing protectionist policies [5][6] Group 4: Future Outlook - The absence of major transactions at JPM 2026 was noted, but many multinational companies expressed a willingness to explore significant deals in the near future [11][12] - The upcoming expiration of patents for several blockbuster drugs is expected to drive increased M&A activity as companies seek to replenish their pipelines [12][13] - The trend of U.S. biotech firms considering establishing operations in China to leverage R&D efficiencies is emerging, indicating a shift in cross-border collaboration dynamics [10][11]