Core Insights - In 2025, China approved 76 innovative drugs, significantly surpassing the 48 approved in 2024, marking a historical high [1] - The total amount of authorized transactions for innovative drugs in China exceeded $130 billion in 2025, with over 150 transactions, also a historical high [1] Industry Outlook - The pharmaceutical and biotechnology industry in China is expected to officially enter a new era of innovative drugs in 2026, with innovative drugs gradually dominating the market [1] - The combination of medical insurance and commercial insurance is anticipated to open up long-term payment space for innovative drugs, supporting their continued growth [1] Domestic Focus - In 2026, there will be increased attention on the launch rhythm of innovative drugs, the leading status of popular target layouts, the competitiveness of the market, and the outcomes of key clinical data [1] International Focus - With the normalization of business development (BD) transactions, there will be a focus on the improvement of cash flow from upfront payments and the overseas clinical progress of authorized projects [1] - The performance of overseas launched products will also be closely monitored [1] Sector Performance - The CXO and upstream scientific reagent sectors within the innovative drug industry chain are expected to maintain good growth momentum due to the rapid development of innovative drugs [1] - Recent sentiment in the innovative drug sector has cooled, but with ongoing BD transactions, the sector's prosperity is expected to be sustainable [1] - The trend of "innovation + internationalization" in the innovative drug industry remains unchanged, with improved fundamentals observed in the industry chain [1]

Group 1: H-Shares and Semiconductor Sector - H-shares of technology stocks surged on the first trading day of 2026, driven by Baidu's announcement of Kunlun Chip's independent listing and Wall Street's 75% increase in Wall Street Technology stocks [1] - The semiconductor sector experienced a significant rally, with major players like SMIC and Hua Hong benefiting from increased orders, leading to a bullish outlook for their performance [1] - The demand for industrial metals is expected to rise due to AI's energy requirements, resulting in price increases for copper and aluminum, with companies like Jiangxi Copper, Luoyang Molybdenum, and Zijin Mining seeing substantial gains [1] Group 2: Emerging Investment Opportunities - Four key investment directions are highlighted: non-ferrous metals, semiconductor industry chain, commercial aerospace, and robotics [2][4] - The commercial aerospace sector is seen as an extension of the AI industry, with significant speculative interest due to government support and the nascent stage of the industry [2] - Robotics is identified as a key area where AI and semiconductor industries converge, presenting further investment opportunities [2] Group 3: Market Predictions and Strategies - Predictions for the market from January 5 to January 9 indicate a potential upward trend, with key resistance levels identified at 3950 and 4034 [3] - The focus for 2026 includes dividend stocks, new technologies, new pharmaceuticals, and new consumer trends, with a strategy to reduce positions if the Shanghai Composite Index exceeds 5178 points [3] - Emphasis is placed on identifying industry performance turning points, particularly in sectors like CXO and medical devices, as well as individual stock opportunities in lithium batteries and energy metals [4]

Core Viewpoint - The Hong Kong stock market experienced a strong upward trend in 2025, with the Hang Seng Index rising by 27.77% and the Hang Seng Tech Index increasing by 23.45%, driven by active trading and improved market sentiment [1][12]. Market Performance - The trading volume in the Hong Kong stock market significantly increased compared to previous years, indicating heightened trading activity and a broad release of market profit potential [1]. - The year saw a clear phase rotation in the market, with different sectors driving the market's upward movement at various times, including AI technology, innovative pharmaceuticals, and non-competitive policies leading to industrial optimization [3][5]. Sector Analysis - The technology sector was a major player in the market, with the Hang Seng Tech Index rising by 20.74% in Q1 2025, outperforming the Hang Seng Index's 15.25% increase during the same period [4]. - The innovative pharmaceutical sector gained momentum due to a surge in business development (BD) transactions, benefiting from improved global liquidity as the Federal Reserve began its rate-cutting cycle [4][5]. - The metals sector, particularly non-ferrous metals, emerged as the strongest performer by year-end, with copper stocks rising by 261.85%, gold and precious metals by 197.85%, and other metals and mining stocks by 187.91% [6][7]. Individual Stock Performance - Notable individual stock performances included Zijin Mining (02899.HK) rising by 162%, Shandong Gold (01787.HK) increasing by over 183%, and Jiangxi Copper (00358.HK) climbing nearly 281% [9]. - The stock of珠峰黄金 (01815.HK) skyrocketed by over 1286%, marking it as a rare "tenfold" stock in a year [9]. Investment Drivers - The rise in non-ferrous metals was attributed to multiple favorable factors, including the global trend of "de-dollarization," supply-demand imbalances in industrial metals, and domestic policies optimizing supply structures [6][10]. - The rapid development of emerging industries such as AI, new energy, and innovative pharmaceuticals provided a wealth of high-growth investment opportunities, supporting long-term stock price increases [12][13]. Future Outlook - Analysts expect the Hong Kong stock market to continue its upward trend in 2026, driven by improved liquidity and corporate profit recovery, with a potential shift in market driving logic from valuation recovery to profit growth [13].

Core Insights - The CXO sector in A/H shares shows signs of fundamental recovery ahead of expectations in 2025 after three years of valuation downgrades [1] - The recovery is uneven, with the clinical CRO segment still facing challenges, indicating a divergence in industry recovery [1][7] Group 1: Financial Performance - WuXi AppTec (药明康德) reported a revenue of 32.857 billion yuan in the first three quarters of 2025, a year-on-year increase of 18.61%, and a net profit of 12.076 billion yuan, up 84.84% [1] - The company had a backlog of orders amounting to 59.880 billion yuan as of September 2025, reflecting a 37.2% year-on-year growth [1] - The average price of clinical research services in China has decreased by approximately 30% since 2022, impacting gross and net profit margins [2] Group 2: Order Fulfillment and Business Model - The business model of CXO leads to a natural lag in order fulfillment, with revenue recognition often taking multiple quarters or years [2] - WuXi AppTec's backlog at the end of 2024 was 49.310 billion yuan, 1.26 times its revenue for that year, indicating visible future revenue growth potential [2] - The order-to-revenue ratio is crucial for assessing conversion efficiency, with a healthy range identified between 1.2 to 1.3 times [3] Group 3: Market Dynamics and Challenges - The global pharmaceutical R&D investment continues to grow, but structural fluctuations are evident, particularly among innovative drug startups [1] - The clinical CRO segment is heavily influenced by funding constraints and project strategy adjustments, leading to a situation where project numbers increase but individual project outputs decline [8] - The international expansion of clinical CROs raises higher standards for organizational capability and compliance, making short-term recovery challenging [8] Group 4: Emerging Opportunities - The global expansion of GLP-1 and related indications has led to unexpected order increases in upstream peptide and related processes, maintaining high demand in 2025 [9] - Core stock Novartis Bio (诺泰生物) achieved a revenue of 1.527 billion yuan in the first three quarters of 2025, with a net profit of 445 million yuan, reflecting a year-on-year growth of 21.95% and 26.92% respectively [9] - The market for cell and gene therapy (CGT) is still growing, but profitability remains elusive, with significant investments required before becoming a core profit driver [10][11]

Core Viewpoint - The A-share pharmaceutical sector in 2025 exhibits structural differentiation, with innovative drugs and CXO sectors thriving due to overseas demand and business development, while traditional Chinese medicine, medical devices, and pharmaceutical commerce face performance pressures [3][20]. Summary by Category Overall Market Performance - The A-share pharmaceutical and biotechnology sector saw an overall increase of 25.64% from January 1 to December 30, 2025, despite a slight decline in revenue and a stabilization in profits, with total revenue of 18,544.52 billion yuan, down 1.42% year-on-year, and net profit of 1,407.32 billion yuan, down 1.65% year-on-year [4][21]. Innovative Drug Sector - The innovative drug sector was a standout performer in 2025, with the chemical pharmaceutical segment rising by 32.58% and the medical services segment by 32.91% [4][21]. - Companies like BeiGene (百济神州) reported significant growth, achieving revenue of 27.595 billion yuan, a 44.2% increase year-on-year, surpassing the total revenue of 27.21 billion yuan for 2024 [4][22]. Business Development (BD) Trends - The business development landscape for innovative drug companies is evolving, with significant partnerships such as the 11.4 billion USD deal between Innovent Biologics and Takeda, and a 12.5 billion USD collaboration between Hengrui Medicine and GlaxoSmithKline [5][22][24]. - The total value of business development transactions reached approximately 94.158 billion USD in the first three quarters of 2025, significantly exceeding the total for 2024 [25]. CXO Sector Performance - The CXO sector, driven by the demand for innovative drug research, achieved a 32.91% increase in 2025, with total revenue of 1,365.72 billion yuan, up 3.63% year-on-year, and net profit of 209.12 billion yuan, up 36.47% year-on-year [10][27]. - Leading companies like WuXi AppTec (药明康德) and Kanglong Chemical (康龙化成) returned to growth, with WuXi AppTec reporting a revenue increase of 18.61% and net profit growth of 84.84% [28][31]. Traditional Chinese Medicine and Medical Devices - The traditional Chinese medicine sector experienced a modest increase of 6.75% in 2025, with total revenue of 2,590.69 billion yuan, down 4.33% year-on-year, and net profit of 294.99 billion yuan, down 1.53% year-on-year [36]. - The medical device sector reported a revenue of 1,792.10 billion yuan, down 2.24% year-on-year, with notable performance differences among sub-sectors, where companies like Mindray Medical (迈瑞医疗) showed strong overseas revenue growth [33][34].

Group 1: Core Insights - The report maintains a strong market rating for the pharmaceutical industry, indicating a clear upward trend driven by recovering demand and improved performance in the CXO sector [1][2] - The CXO sector has shown significant stock price increases, with some companies experiencing nearly 100% growth since the beginning of 2025, driven by the innovative drug market and a recovery in orders [3][6] Group 2: CXO Sector Analysis - The CXO sector's overall revenue increased by 11.8% year-on-year in the first three quarters of 2025, with a notable profit increase of 58.1% [13] - External demand for CXO services has rebounded, with significant order growth from leading CDMO companies, indicating a clear recovery trend [22][31] - Internal demand for CXO services has lagged behind external demand, but there are signs of strong growth in domestic innovative drug projects and increased investment in the domestic market [3][22] Group 3: Life Sciences Upstream - The life sciences upstream sector has seen a 37.7% increase in stock prices year-to-date, outperforming the pharmaceutical and biotechnology index by 18% [3] - Revenue for the upstream sector increased by 8.8% year-on-year in the first three quarters of 2025, with net profit rising by 27.7% [3] Group 4: Investment Recommendations - The report suggests a strategic investment focus on companies such as WuXi AppTec, WuXi Biologics, and Tigermed, while also highlighting more flexible investment options like Zhaoyan New Drug and Nossan [3]

Core Insights - The report recommends key stocks across various industries for January 2026, highlighting potential investment opportunities based on market trends and company performance [2][3]. Industry Summaries Construction - Shenghui Integration (603163.SH) is a Taiwanese cleanroom engineering service provider and a core supplier for Google's TPU supply chain, poised to benefit from TSMC's expansion in the U.S. with potential orders from TSMC Arizona and multiple North American data centers [2]. Social Services - China Duty Free Group (601888.SH) is expected to benefit from a new cycle in domestic duty-free sales, with a boost from the upcoming consumption peak during the New Year and Spring Festival, leading to improved performance expectations [2]. Electronics - Lante Optics (688127.SH) is experiencing significant growth in its optical prism product line and is collaborating with multiple waveguide manufacturers for AR glasses, indicating strong profit elasticity and expansion potential [2]. Utilities and Environmental Protection - China General Nuclear Power (003816.SZ) is set to benefit from the normalization of nuclear power approvals and improvements in market pricing mechanisms, with expected production increases in Guangdong province [2]. Nonferrous Metals - Zijin Mining (601899.SH) is a leading player in the nonferrous sector, with high profit contributions from gold and copper, and is entering a rapid growth phase in lithium production, making it a highly valued investment opportunity for 2026 [2]. Agriculture, Forestry, Animal Husbandry, and Fishery - Youran Dairy (9858.HK), a global leader in dairy farming, is expected to benefit from rising milk prices and beef price increases, leading to significant performance recovery [2]. Internet - Tencent Holdings (0700.HK) is well-positioned for the AI era, leveraging its ecosystem advantages, with potential growth from e-commerce and AI agent capabilities not yet reflected in current profit forecasts [2]. Pharmaceuticals - WuXi AppTec (603259.SH) is supported by strong performance, order growth, and capital expenditure, with favorable regulatory changes expected to enhance the valuation of the CXO sector [2]. Light Industry - Sun Paper (002078.SZ) is entering a new capacity release phase with significant production increases expected, making it a compelling investment with reasonable valuation metrics [2]. Textiles and Apparel - Anta Sports (2020.HK) is anticipated to benefit from the performance of its premium sports brands, with a favorable valuation and upcoming catalysts from Q4 operational disclosures and the Spring Festival consumption peak [2].

Summary of Conference Call Notes Industry Overview - The notes pertain to the Clinical Research Organization (CRO) and Contract Development and Manufacturing Organization (CDMO) sectors, with a focus on the performance and trends in these industries for the fourth quarter of 2025 [1][2][6]. Key Insights and Arguments - **New Orders and Pipeline Growth**: The new order amount reflects an increase in the pipeline, with an expected growth of 20%-30% in new preclinical candidate compounds (PCC), driven by an innovation cycle [1][2]. - **Rising Costs of Preclinical Toxicology Testing**: The price of monkeys used in preclinical toxicology tests has surged from approximately 120,000 yuan to an expected 150,000 yuan due to a spike in demand, particularly for small nucleic acids and ADC antibody drugs. The independent testing schedule has been extended to after May 2026, indicating a severe supply-demand imbalance [1][3][4]. - **Open Contracts**: The re-emergence of open contracts means that if monkey prices rise during the period from order to execution, the buyer must pay the price at execution. This reflects the industry's bullish outlook on future prices and allows companies to extend schedules to manage supply-demand imbalances, potentially increasing operational costs [1][5]. - **CRO Market Recovery**: The clinical CRO market is showing signs of recovery, with discount limits rising from 40%-70% to 60%-80%, indicating reduced competition. Orders have achieved over 10% growth, and WuXi AppTec's decision to sell its clinical business is attributed to insufficient competitiveness in large clinical operations and low profit margins [1][6]. - **CDMO Sector Performance**: The CDMO sector performed reasonably well in Q4 2025, with strong demand from multinational corporations (MNCs) and moderate demand from biotech companies. The U.S. market is gradually improving, while the European market is performing even better, with overall performance aligning closely with third-quarter expectations [1][7][8]. - **Order Trends in CDMO**: The CDMO industry is meeting expectations, particularly in the large molecule sector, with rapid growth in ADC CDMO business. Domestic companies are showing strong growth in the ACCDM (Antibody-Drug Conjugate Development and Manufacturing) field, while small molecule CDMO companies are expanding into emerging businesses such as ADCs, peptides, and small nucleic acids, which are beginning to show incremental growth [1][9][13]. Additional Important Points - **Impact of NBA Legislation**: The NBA legislation's impact on domestic companies is mixed, with some European-focused companies reporting no effect on new orders. WuXi AppTec expresses more concern over tariff issues rather than the NBA legislation itself, indicating that tariffs are a more pressing risk factor [1][11]. - **Inclusion in 160H List**: WuXi AppTec's inclusion in the 160H list is attributed to its R&D capabilities rather than defense or genetic concerns. There are speculations about potential access to U.S. corporate trade secrets, but the actual impact appears minimal [1][12]. - **MNC Influence on Orders**: Companies with a higher proportion of MNCs typically exhibit better order performance, which is a common trend observed in the industry [1][10].

证券研究报告 | 2025年12月26日 | 晨会纪要 | | --- | 行业与公司 | 数据日期:2025-12-25 | 上证综指 | 深证成指沪深 | 300 指数 | 中小板综指 | 创业板综指 | 科创 50 | | --- | --- | --- | --- | --- | --- | --- | | 收盘指数（点） | 3959.62 | 13531.41 | 4642.53 | 14517.25 | 3938.41 | 1349.05 | | 涨跌幅度（%） | 0.47 | 0.33 | 0.18 | 0.70 | 0.69 | -0.22 | | 成交金额（亿元） | 7850.18 | 11395.04 | 3853.56 | 4151.46 | 5262.93 | 448.28 | 【常规内容】 中国神华(601088.SH) 公司快评:千亿规模收购助力未来发展，龙头行稳 致远 中国海油(600938.SH) 公司快评:渤海海域获得亿吨级油田发现，国内油 气持续上产 金融工程 金融工程周报:股指分红点位监控周报-股指期货主力合约贴水幅度收窄 金融工程日报:沪指震荡攀升录得六连阳，商业 ...

| 数据日期:2025-12-25 | 上证综指 | 深证成指沪深 | 300 指数 | 中小板综指 | 创业板综指 | 科创 50 | | --- | --- | --- | --- | --- | --- | --- | | 收盘指数（点） | 3959.62 | 13531.41 | 4642.53 | 14517.25 | 3938.41 | 1349.05 | | 涨跌幅度（%） | 0.47 | 0.33 | 0.18 | 0.70 | 0.69 | -0.22 | | 成交金额（亿元） | 7850.18 | 11395.04 | 3853.56 | 4151.46 | 5262.93 | 448.28 | 【常规内容】 行业与公司 医药生物行业 2025 年 12 月投资策略：推荐关注 CXO 板块 证券研究报告 | 2025年12月26日 | 晨会纪要 | | --- | 中国神华(601088.SH) 公司快评:千亿规模收购助力未来发展，龙头行稳 致远 中国海油(600938.SH) 公司快评:渤海海域获得亿吨级油田发现，国内油 气持续上产 金融工程 金融工程周报:股指分红点位监控周报-股 ...