Investment Rating - The report maintains a "Buy" rating for Wuxi Apptec, Pharmaron, and Tigermed A/H, while Wuxi Bio and Joinn A/H are rated as "Neutral" [5][107]. Core Insights - The biopharma industry in China is expected to see a mild increase in R&D activities and outsourcing over the next 12 months, with an average R&D budget increase of 10.8% YoY and an outsourcing rate rising from 46.7% to 48.3% [2][14]. - Biopharma managers are increasingly considering out-licensing as a primary financing option, rising from 58% in 2024 to 75% in 2025, which is anticipated to benefit CROs/CDMOs [3][16]. - The demand for R&D speed and capacity is growing, with biopharma companies prioritizing on-time delivery and quality when selecting CROs [3][50]. Summary by Sections R&D Budget and Outsourcing - Biopharma managers expect their R&D budgets to increase by an average of 10.8% YoY, with a higher willingness to allocate more funds to outsourcing [23][34]. - The overall outsourcing ratio is projected to increase from 46.7% to 48.3% in the next 12 months, with late-stage trials expected to recover more than early-stage trials [34][50]. Business Development (BD) Activities - 75% of surveyed biopharma managers view BD as the primary financing option, reflecting a significant increase in BD activities [3][16]. - The report indicates that the reinvestment of BD income may lead to more CRO orders, enhancing growth opportunities for CROs/CDMOs [16][50]. Pricing Trends - Biopharma managers anticipate smaller price cuts in the next 12 months compared to the previous year, indicating an improving demand/supply situation [4][56]. - The report highlights that no price cuts are expected for manufacturing in the upcoming year, which is a positive sign for the industry [4][56]. Vendor Selection - Wuxi Apptec remains the top choice for preclinical lab-testing, while Tigermed is the preferred vendor for clinical testing and trials [5][74]. - The criteria for selecting CROs emphasize quality, on-time delivery, and reputation, with a growing importance placed on delivery speed [65][92]. Market Outlook - The survey results suggest an overall positive outlook for the CRO/CDMO sector in China, with expectations of improved R&D activity and outsourcing compared to 2024 [5][50]. - The geopolitical uncertainties are expected to have limited impact on the operations of China CROs, with less than 10% of Wuxi Apptec's goods subject to US tariffs [5][107].