Core Insights - The article emphasizes the need for businesses to adapt to a rapidly changing global environment characterized by geopolitical tensions, economic fragmentation, and technological advancements [2][4][41] Group 1: Geopolitical and Economic Trends - The decline of the liberal international order is accelerating, leading to increased geopolitical tensions and economic fragmentation [8][9] - Businesses must navigate a more fragmented global market with diverse regulatory and compliance risks [10][12] - The weakening of multilateral cooperation in areas like climate governance and public health increases uncertainty for cross-border operations [10][12] Group 2: Strategic Responses for Businesses - Companies are encouraged to adopt strategic hedging by diversifying supply chains and partnerships across geopolitical regions to mitigate risks [10][12] - There is a growing expectation for businesses to take on more social responsibility, particularly in education and community integration [13][18] - Firms should enhance their operational resilience by optimizing supply chain structures and integrating advanced technologies [28][30] Group 3: Technological Advancements - The rapid evolution of artificial intelligence is driving transformative changes across various sectors, necessitating a new understanding of its implications [31][36] - Companies must focus on building AI-ready talent and leveraging data as a competitive advantage [36][39] Group 4: Resource Management and Sustainability - The strategic importance of critical minerals is rising, with companies needing to ensure resource security through long-term contracts and geopolitical due diligence [34][35] - Businesses should prioritize sustainability and ethical compliance in their supply chain practices to mitigate reputational risks [35][42] Group 5: Future Outlook - The global economic landscape is shifting towards a more multipolar currency system, requiring businesses to diversify their currency exposure [26][27] - Companies must proactively define their development goals and establish sustainable operational pathways to thrive amid uncertainty [23][41]

Core Insights - The report maintains a neutral rating for the pharmaceutical and biotechnology industry, indicating that while there are pressures on performance, there are also opportunities in specific segments that are experiencing growth [5][30]. Market Performance Review - In the first ten months of 2025, the SW pharmaceutical and biotechnology index increased by 21.10%, outperforming the CSI 300 index by approximately 2.26 percentage points, ranking 12th among all Shenwan primary industries [14][19]. - Most sub-sectors within the industry recorded positive returns, with the medical research outsourcing and chemical preparation sectors leading with increases of 60.54% and 40.80%, respectively. Conversely, the blood products and vaccine sectors saw declines of 7.89% and 1.60% [15][19]. - As of October 31, 2025, the overall price-to-earnings (PE) ratio for the SW pharmaceutical and biotechnology industry was approximately 53.97 times, which is 4.06 times higher than the CSI 300 index, indicating an increase in industry valuation [19][20]. Policy Outlook for H1 2026 - The 11th batch of national drug centralized procurement is expected to be fully implemented in the first half of 2026, involving 55 varieties and 272 companies, with a selection rate of 57% [30][31]. - The procurement results show a high match between selected brands and clinical needs, with strong supply capabilities from mainstream companies [30]. Sub-sector Highlights Innovative Drugs - Continuous policy optimization supports the development of innovative drugs, with a comprehensive approach to enhance pricing management, insurance coverage, and investment [38]. - The industry is gradually moving away from homogeneous competition, with a significant increase in the proportion of First-in-Class new drug development, which rose by 23 percentage points to 35% since 2020 [38][39]. - Domestic innovative drugs are gaining international recognition, with outbound licensing transactions reaching $66 billion in the first half of 2025, reflecting a growing global presence [41][44]. Medical Devices - The aging population in China is projected to exceed 400 million by 2035, driving demand for medical services and supporting stable growth in the medical device market [50]. - The global medical device market is expected to grow at a compound annual growth rate (CAGR) of 5.7%, reaching $869.7 billion by 2030 [52]. - China's medical device market is rapidly expanding, with projected revenues of 187.5 billion yuan by 2025, indicating significant growth potential [53]. Aesthetic Medicine - The domestic aesthetic medicine market is expected to steadily increase, supported by various policies aimed at promoting healthy industry development and improving market concentration [39]. Synthetic Biology - The market size for synthetic biology is anticipated to approach $40 billion by 2027, driven by multiple factors including technological advancements and increased investment [39].