Investment Rating - The report does not explicitly state an investment rating for the industry [1] Core Insights - The pharmaceutical and biotechnology sector experienced a decline of 2.4% from November 3 to November 7, 2025, underperforming compared to the Wind All A index (0.63%) and the CSI 300 index (0.82%) [2][7] - The rise in flu activity was noted, with the percentage of flu-like illness (ILI) cases reported at 4.7% in the week of October 27 to November 2, 2025, indicating an increase compared to previous weeks and years [2][10] - The final overall survival (OS) results from the HARMONi-A study of Ivosidenib combined with chemotherapy for EGFR-mutant non-small cell lung cancer showed a significant improvement in OS, with a median OS of 16.8 months versus 14.1 months for the control group [2][10] Weekly Market Review - The pharmaceutical and biotechnology sector's performance was down 2.4%, with notable declines in medical research outsourcing (-4.93%), chemical preparations (-4.42%), and other biological products (-4.33%) [7][8] - The leading gainers included Hezhi China (61.1%), Wanze Shares (30.3%), and Fuxiang Pharmaceutical (23.3%), while Changshan Pharmaceutical (-20%), Yifang Bio-U (-17.8%), and Guangshengtang (-15.3%) were the biggest losers [10] Industry News and Key Company Announcements - On November 7, 2025, the final OS analysis of the HARMONi-A study was presented, showing significant results for Ivosidenib in combination with chemotherapy [10][12] - According to data from the Chinese Center for Disease Control, flu-like illness percentages in southern provinces increased to 4.6%, while northern provinces reported 5.1%, both higher than the previous week [10][12] - BeiGene reported a total revenue of $1.412 billion for Q3 2025, a 41% year-on-year increase, driven by a 51% growth in global sales of its product [12][14] - Metsera announced a merger agreement with Pfizer, with an estimated total transaction value of approximately $9 billion [12][14]

Summary of the Pharmaceutical Industry Conference Call Industry Overview - The pharmaceutical industry is gradually stabilizing and recovering, with most companies optimizing product structures, reducing costs, and benefiting from the recovery in downstream biopharmaceutical demand, leading to profit restoration [1][2][3] - The CRO/CDMO sector shows stable recovery, with revenue and net profit growth of 14% and 36% respectively in the first three quarters [1][6] - The medical device sector is experiencing a turning point, with significant improvements in performance, particularly in the medical equipment segment [1][10] Key Points and Arguments Pharmaceutical Sector Performance - In Q3 2025, the upstream pharmaceutical sector showed signs of recovery, with revenue growth of 2.3% and net profit growth of 55.3% year-on-year [2] - The gross margin for the upstream sector increased by 0.6 percentage points quarter-on-quarter, while sales, management, and R&D expense ratios decreased year-on-year and quarter-on-quarter [2][3] CRO/CDMO Sector - The CRO/CDMO sector's revenue and net profit growth were 14% and 36% respectively, with Q3 profits accelerating compared to Q2 [1][6] - Investment in global biopharmaceuticals has rebounded since 2024, with domestic investment in Q3 2025 increasing by 76% year-on-year and over 150% quarter-on-quarter [1][7] Medical Device Sector - The medical device sector is expected to accelerate in 2026, with the negative impacts of past policies gradually clearing [1][11] - High-value consumables are experiencing differentiation, with some companies showing significant improvement [1][10] Traditional Chinese Medicine - The traditional Chinese medicine sector faced pressure in the first three quarters, but the decline has narrowed, and demand is expected to recover with the arrival of the winter peak season [1][24] Vaccine Industry - The vaccine industry faced significant challenges, with total revenue down 52.5% year-on-year in the first three quarters, but demand for flu vaccines is expected to rise [1][25][26] Blood Products Sector - The blood products sector saw a 1.5% revenue increase but a profit decline of over 20% in the first three quarters, primarily due to pressure on albumin prices [1][31] Retail Pharmacy Sector - The retail pharmacy sector experienced a slight revenue decline but a net profit increase of 16.8% year-on-year in Q3, with expectations for improved customer traffic due to policy changes [1][34][35] Other Important Insights - The medical device sector's performance is expected to improve significantly in 2026, with a focus on performance recovery and valuation opportunities [1][11] - The traditional Chinese medicine sector is anticipated to benefit from adjustments in the basic drug catalog and increased demand in the winter season [1][24] - The CRO/CDMO sector is seeing a positive trend in investment, which is likely to further enhance domestic demand [1][7] - The retail pharmacy sector is expected to benefit from improved customer traffic and a favorable policy environment, leading to potential valuation increases [1][35]

Macro Strategy - In October, China's exports showed a year-on-year decline of -1.10%, marking the first negative growth since March 2025, which affected the cumulative year-on-year growth rate, decreasing from 6.10% in September to 5.30% in October. This decline is attributed to a high base in October 2024 and a temporary escalation in trade conflicts between China and the US in early October 2025 [3][4]. Market Overview - From November 3 to November 7, 2025, A-share indices experienced wide fluctuations, with the Shanghai Composite Index rising by 1.08% and the ChiNext Index increasing by 0.65%. The market is expected to continue a "slow bull" trend with wide fluctuations in November due to reduced short-term trade conflict risks between China and the US [4][5]. - Among the 31 first-level industries, the top performers were electric equipment and coal, with weekly increases of 4.98% and 4.52%, respectively. Conversely, the beauty care and computer sectors saw declines of -3.10% and -2.54% [6][7]. North Exchange Market - As of November 7, 2025, the North Exchange had 282 listed stocks, with an average total market value of 908.24 billion yuan, reflecting a 1.24% increase from the previous week. The liquidity decreased, with average trading volume dropping by 17.23% [11][12]. - The highest weekly gain was recorded by Danna Biological, which surged by 377.78% in its first week of trading, while the largest decline was seen in Beiyikang, which fell by 12.35% [13]. Vaccine Industry - The vaccine industry is experiencing structural differentiation, with companies like Kangtai Biological and Zhonghui Biological making significant advancements in vaccine development for specific populations, such as infants and pregnant women. The updated technical guidelines emphasize the importance of vaccination for high-risk groups [17][21]. - The vaccine sector's performance remains under pressure, with a year-to-date decline of -1.57%. The industry is focusing on innovation and international expansion to navigate current challenges [19][21]. - The vaccine sector's price-to-earnings ratio (PE) is currently at 99.07X, reflecting a decrease of 4.97X from the previous week, while the price-to-book ratio (PB) remains stable at 1.94X [20]. Investment Recommendations - The vaccine industry is advised to focus on innovation and international markets, as the current market conditions present challenges due to supply-demand imbalances and intense competition. Companies with strong technological capabilities and differentiated product lines are recommended for investment [21][23].

Group 1 - The State Council will hold a press conference to discuss the acceleration of scenario cultivation and the large-scale application of new scenarios [2] - Domestic oil prices are expected to rise for the seventh time this year, with the new pricing window opening on November 10 [3] - The HPV vaccine will be included in the national immunization program starting November 10, 2025, for girls born after November 10, 2011 [4] Group 2 - A total of 13 companies will have their restricted shares unlocked today, with a combined market value of 12.143 billion yuan [5] - The companies with the largest number of unlocked shares include Youyan Silicon, Shapuaisi, and Southeast Electronics, with respective unlock volumes of 74 million shares, 4.99215 million shares, and 3.25328 million shares [5] - The companies with the highest market value of unlocked shares are Youyan Silicon, Southeast Electronics, and Shapuaisi, with respective values of 9.991 billion yuan, 677 million yuan, and 403 million yuan [5]

Investment Rating - The industry investment rating is maintained at "Overweight" [2][9]. Core Insights - The vaccine industry is currently transitioning from scale expansion to innovation-driven growth, facing short-term pain due to supply-demand imbalance and homogenized competition, but the long-term outlook remains positive driven by policy, demand, and technology [8][9][28]. - Recent breakthroughs in vaccine development for specific populations, such as the quadrivalent influenza vaccine for infants and pregnant women, highlight ongoing innovation in the sector [4][8][9]. - The industry is experiencing structural differentiation among companies, with a focus on innovative and multi-valent products to enhance competitiveness [8][9]. Market Performance - The vaccine sector saw a slight increase of 0.04% last week, while the overall pharmaceutical sector declined by 2.4% [5][11]. - Year-to-date, the vaccine sector has experienced a cumulative decline of 1.57% [5][11]. Company Developments - Companies like Kangtai Biological and Zhonghui Biological are making significant progress in vaccine trials for specific demographics, which could fill market gaps [4][8]. - The latest technical guidelines emphasize the importance of vaccination for high-risk groups, which may drive demand for vaccines [4][8]. Valuation Metrics - The vaccine sector's price-to-earnings (PE) ratio is 99.07X, down 4.97X from the previous period, indicating a high valuation relative to historical standards [7][20]. - The price-to-book (PB) ratio stands at 1.94X, remaining stable, with historical maximum and minimum values of 2.29X and 1.69X respectively [7][20]. Investment Recommendations - The report suggests focusing on companies with strong R&D capabilities and differentiated product offerings, recommending Kangxino and Kanghua Biological as key players to watch [9][28].

Core Insights - The report by Zhiyan Consulting highlights the competitive landscape and investment recommendations for the human vaccine industry in China from 2026 to 2032 [1] Import and Export Analysis - In September 2025, China's human vaccine imports totaled 48 tons, representing a year-on-year decrease of 4% [1] - The import value for the same period was $17.5 million, showing a year-on-year decline of 14.6% [1] - Conversely, in September 2025, China's human vaccine exports reached 84.97 tons, marking a significant year-on-year increase of 238.8% [1] - The export value during this period was $7.3 million, reflecting a remarkable year-on-year growth of 418% [1] Data Sources - The data presented is sourced from China Customs and organized by Zhiyan Consulting, a leading industry consulting firm in China [1]

Core Insights - The flu activity in China has significantly increased, with most provinces entering the flu epidemic period earlier than expected this year [1][2] - The proportion of flu-like illness (ILI%) in northern provinces has surpassed the levels of the past three years, indicating a potential rise in flu cases [2][5] Flu Activity Overview - As of the 44th week of 2025, there were 347 reported outbreaks of flu-like cases, a notable increase from 144 the previous week [1] - The ILI% for southern provinces was reported at 4.6%, while northern provinces reported 5.1%, both higher than the previous week and previous years [2][3] Virus Strain Information - The dominant strain currently circulating is the H3N2 influenza virus, accounting for 98.8% of the detected influenza A cases [5][11] - The presence of H1N1 and Victoria lineage B viruses has also been noted, but H3N2 remains the primary concern [5] Vaccination Recommendations - Vaccination is emphasized as the most effective method to prevent flu, with recommendations for all individuals aged six months and older to receive the flu vaccine [6][7] - High-risk groups, including healthcare workers, the elderly, and individuals with chronic diseases, should be prioritized for vaccination [8][10] Vaccination Coverage and Challenges - Current vaccination rates in China are low, estimated at only 2%-3%, which hinders the establishment of effective herd immunity [14][15] - Suggestions have been made to expand free vaccination programs to include more groups, such as school staff and public transport workers, to improve overall vaccination rates [15][16]

Core Viewpoint - The 8th China International Import Expo (CIIE) showcased GSK's commitment to the Chinese market with its innovative health solutions, particularly highlighting the newly approved shingles vaccine, which targets high-risk groups [1][2][3]. Group 1: GSK's Vaccine Innovations - GSK's shingles vaccine, Xinanlis, is the first and only shingles vaccine approved by the NMPA for high-risk adults aged 18 and above [1][3]. - The vaccine's approval for expanded indications aims to protect individuals with immune deficiencies or immunosuppression, reflecting a shift towards proactive immunization across all life stages [1][3]. - GSK emphasizes the integration of vaccine prevention into chronic disease management, particularly for high-risk groups such as those with hypertension, diabetes, and cardiovascular diseases [2][3][11]. Group 2: Market Potential and Growth - The adult vaccine market in China is projected to grow significantly, with the shingles vaccine market expected to reach 5.63 billion yuan by 2025 and exceed 10 billion yuan by 2031 [9]. - With over 500 million chronic disease patients in China, achieving a 5% to 10% vaccination rate could translate to a market size in the hundreds of billions [9][10]. - The increasing prevalence of chronic diseases and an aging population are key drivers for the growth of the adult vaccine market [9]. Group 3: Challenges and Strategies - Despite high awareness of shingles (80%-90%) and vaccine knowledge (60%-80%), the vaccination rate remains low at 1%-2% [5]. - GSK is addressing this "knowledge-action gap" by implementing "vaccine prescriptions" to enhance accessibility and conversion rates for vaccinations [5][6]. - The company is developing a multi-tiered adult vaccine management system, aiming to integrate vaccine management with chronic disease management [6][10]. Group 4: Future Directions - GSK plans to extend its focus from cardiovascular and diabetes management to include other chronic diseases like COPD, promoting a comprehensive approach to disease management [12]. - The company is committed to leveraging its innovative research and development capabilities to enhance public health in China, particularly through the introduction of new vaccines [12].

Core Viewpoint - Kanghua Biotech's stock has shown significant growth this year, with a 51.82% increase, despite a decline in revenue and net profit for the first nine months of 2025 [1][2]. Group 1: Stock Performance - On November 7, Kanghua Biotech's stock rose by 2.01%, reaching 81.29 CNY per share, with a trading volume of 2.09 billion CNY and a turnover rate of 2.21% [1]. - The company's market capitalization stands at 10.563 billion CNY [1]. - Year-to-date, the stock has increased by 51.82%, with a 5.24% rise over the last five trading days, 5.57% over the last 20 days, and 4.03% over the last 60 days [1]. Group 2: Financial Performance - For the period from January to September 2025, Kanghua Biotech reported a revenue of 840 million CNY, a year-on-year decrease of 20.78%, and a net profit attributable to shareholders of 189 million CNY, down 53.41% year-on-year [2]. - The company has distributed a total of 686 million CNY in dividends since its A-share listing, with 462 million CNY distributed over the past three years [3]. Group 3: Shareholder Information - As of September 30, 2025, the number of shareholders increased to 18,300, a rise of 6.13%, while the average number of circulating shares per person decreased by 8.10% to 6,502 shares [2]. - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited is the fifth largest with 1.1826 million shares, marking its entry as a new shareholder [3]. - The Southern CSI 1000 ETF is the seventh largest shareholder with 850,600 shares, having decreased its holdings by 11,000 shares compared to the previous period [3].

Group 1 - Recent announcements from vaccination points in cities like Guangzhou, Xi'an, Changzhou, and Jinan indicate a phase of tight supply or shortage of certain flu vaccines [1][3] - Different community health centers report varying shortages, with some lacking quadrivalent flu virus split vaccines and others facing shortages of quadrivalent flu subunit vaccines [1][3][5] - The demand for quadrivalent split flu vaccines has surged due to their lower price, leading to temporary supply tightness [3][5] Group 2 - As of November 5, 2023, some health centers reported limited availability of quadrivalent subunit flu vaccines, with quadrivalent split flu vaccines completely out of stock [5][6] - The increase in vaccination demand is attributed to the earlier onset of the flu season, with local disease control centers placing orders based on regional needs [6][9] - The supply of quadrivalent subunit flu vaccines is constrained by production capacity, as only Jiangsu Zhonghui Biological provides this type, with an annual production capacity of 4 million doses [9] Group 3 - The overall flu vaccine supply in China is gradually increasing, with the number of approved flu vaccines reaching 26 by July 2025, including 12 quadrivalent vaccines [7][11] - The flu vaccination rate in China remains significantly lower than in the U.S., with only 3.8% during the 2022-2023 flu season compared to 49.3% in the U.S. [11] - Forecasts suggest that China's flu vaccination rate could rise to approximately 9% to 9.5% by 2029 and further to about 15% to 15.5% by 2033, approaching levels seen in Western countries [12]