Core Insights - The report highlights a selection of stocks for May, including companies like SF Holding and Guizhou Moutai, indicating potential investment opportunities in various sectors [1] Industry Overview - The pharmaceutical industry faced challenges in 2024 and Q1 2025, with a slight decrease in revenue and net profit. However, R&D expenses continue to rise, and the impact of centralized procurement and anti-corruption measures is gradually weakening, suggesting a potential recovery in revenue and profit as innovative products are launched [2][7][8] - In 2024, the pharmaceutical sector's total revenue was CNY 2.47 trillion, down 1.53% year-on-year, with a net profit of CNY 122.83 billion, down 8.07%. In Q1 2025, revenue was CNY 603.70 billion, down 6.14%, and net profit was CNY 42.82 billion, down 15.66% [8][9] Company Performance - Anji Technology reported a revenue of CNY 1.835 billion in 2024, a year-on-year increase of 48.24%, with a net profit of CNY 534 million, up 32.51%. In Q4 2024, revenue reached CNY 523 million, up 53.90% year-on-year [3][12] - Foxit Software achieved a revenue of CNY 711 million in 2024, a 16.44% increase, and turned a profit with a net income of CNY 27 million. The company’s subscription business showed strong growth, with an annual recurring revenue (ARR) of CNY 411 million, up 64.42% [17][18] Market Trends - The semiconductor CMP polishing materials market is projected to grow, with Anji Technology increasing its global market share from approximately 7% to 11% over three years. The global market size for CMP polishing materials is expected to reach USD 4.4 billion by 2028, with a CAGR of 5.6% from 2024 to 2028 [14] - The functional wet electronic chemicals segment saw a revenue increase of 78.91% in 2024, indicating strong demand and market expansion [15] R&D and Innovation - The pharmaceutical sector's R&D expenditure reached CNY 138.33 billion in 2024, a 1.25% increase from 2023, with significant investments in chemical pharmaceuticals and medical consumables [10] - Foxit Software's dual transformation strategy focusing on subscription and channel prioritization has shown positive results, with a notable increase in subscription revenue contributing to overall growth [17][19]

Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" [2]. Core Insights - The report highlights a marginal easing of tariff policies, suggesting a potential recovery in consumption and export sectors within the industry [3][12]. - The pharmaceutical and biotechnology sector has shown a weekly return of 1.01%, ranking 26th among 31 primary sub-industry indices, with medical devices leading at 1.67% [3][27]. - Recent government policies, such as the establishment of geriatric medicine departments in hospitals and new regulations for drug wholesale management in the Beijing-Tianjin-Hebei region, are expected to positively impact the industry [3][47]. Summary by Sections 1. Industry Overview - The pharmaceutical and biotechnology sector's performance over the past month was a return of 4.77%, ranking 19th among 31 primary sub-industry indices [3][14]. - The sector's current PE (TTM) is 26.29 times, which is below the historical average of 31.15 times, indicating a relatively low valuation [20][21]. 2. Market Performance - The report notes that the recent three-month performance shows a decline of 1.88%, while the six-month performance indicates a drop of 7.71% [15][16]. - The report suggests that the easing of tariff impacts may lead to a valuation recovery in specific sub-sectors such as CXO, raw materials, and medical devices [3][12]. 3. Export Industry Chain - The report recommends focusing on the export industry chain, particularly in the CXO sector, with key companies including WuXi AppTec and others highlighted for potential investment [3][12]. - In the raw materials sector, companies like Junshi Biosciences and others are suggested for attention [3][12]. 4. Consumption Recovery - The report anticipates that monetary policies such as interest rate cuts and reserve requirement ratio reductions will enhance macroeconomic consumption [3][12]. - Specific sectors for investment include ophthalmology and dental care, medical aesthetics, traditional Chinese medicine, and retail pharmacy leaders [3][12]. 5. Industry Dynamics - Recent policy developments include the release of guidelines for geriatric medicine and new regulations for drug wholesale management, which are expected to foster healthy development in the pharmaceutical distribution sector [3][47]. - Notable industry news includes collaborations between major pharmaceutical companies and health platforms, as well as significant investments in local production facilities [47].

Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" (maintained) [1] Core Insights - The report emphasizes the focus on innovative drugs and the recovery of consumer demand as key drivers for investment in the pharmaceutical sector [3] - The TCE (T-cell Engager) solid tumor pipeline is highlighted, with Janux and Vir making significant progress in their development plans [5][13] - The pharmaceutical sector saw a 1.01% increase in the second week of May, underperforming the CSI 300 index by 1 percentage point, ranking 26th among 31 sub-industries [6][15] Summary by Sections TCE Solid Tumor Pipeline Update - Janux announced that JANX007 (PSMA/CD3) will enter the 1b expansion trial, targeting taxane-naive patients, marking a significant step for TCE in solid tumors [5][13] - Vir has registered VIR-5525 (EGFR/CD3) for a first-in-human trial, expected to start this month, focusing on EGFR-expressing NSCLC [5][13] Market Performance - In the second week of May, the pharmaceutical sector increased by 1.01%, with the medical device sector showing the highest growth at 1.98% [6][19] - The report notes that the offline pharmacy sector experienced the largest decline, dropping by 1.65% [19] Recommended and Benefiting Stocks - Recommended stocks in the pharmaceutical and biotechnology sector include: - Innovative drugs: Zai Lab, Innovent Biologics, and others [7] - Traditional Chinese medicine: Dong-E E-Jiao, Jiangzhong Pharmaceutical, and others [7] - Medical devices: Mindray Medical, and others [7]

Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" (maintained) [1] Core Insights - The report emphasizes the focus on innovative drugs and the recovery of consumer demand as key drivers for investment in the pharmaceutical sector [3] - The TCE (T-cell Engager) solid tumor pipeline is highlighted, with Janux and Vir making significant progress in their development plans [5][13] - The pharmaceutical sector saw a 1.01% increase in the second week of May, underperforming the CSI 300 index by 1 percentage point, ranking 26th among 31 sub-industries [6][15] Summary by Sections TCE Solid Tumor Pipeline Update - Janux announced that JANX007 (PSMA/CD3) will enter the 1b expansion trial, targeting taxane-naive patients, marking a significant step for TCE in frontline indications [5][13] - Vir has registered VIR-5525 (EGFR/CD3) for a first-in-human trial, expected to start this month, focusing on EGFR-expressing NSCLC [5][13] Market Performance - In the second week of May, the pharmaceutical sector increased by 1.01%, with the medical device sector showing the highest growth at 1.98% [6][19] - The report notes that the offline pharmacy sector experienced the largest decline, dropping by 1.65% [19] Recommended and Benefiting Stocks - Recommended stocks in the pharmaceutical and biotechnology sector include: - Innovative drugs: Zai Lab, Innovent Biologics, Kelun-Biotech, Yifan Pharmaceutical, and others [7] - Traditional Chinese medicine: Dong-E E-Jiao, Jiangzhong Pharmaceutical, and others [7] - Medical devices: Mindray, Aohua Endoscopy, and others [7]

Group 1 - The peak impact of tariff events has passed, and A-shares are expected to continue their recovery amidst fluctuations. The extreme drop on April 7 was a one-time reaction to the so-called "reciprocal tariffs" event, and the rebound in April is a correction of pessimistic sentiment. With the implementation of reserve requirement ratio cuts and interest rate reductions in May, A-shares have entered a new phase of substantial recovery, although the process is not smooth due to uncertainties regarding the impact of the U.S. imposing "reciprocal tariffs" on the global economy [1][2][3] - Industries with high dependence on overseas business, such as consumer electronics and CXO, are likely to be significantly affected by "reciprocal tariffs." In contrast, domestic consumption and technological self-innovation are expected to benefit from future hedging policies [1][2] Group 2 - In May, attention can be refocused on technology growth sectors. The low valuation and high dividend direction yielded excess returns in April, and the market style may switch back to technology growth in May. Catalysts for technology sectors include updates to AI large models and developments in robotics competitions [2] - The AI development transition from model training to inference was confirmed at the NVIDIA GTC conference, with emerging AI directions such as cloud computing, AI+office, and AI+medicine to be monitored in May [2] - The trend of domestic semiconductor production continues, with a focus on semiconductor equipment, wafer manufacturing, semiconductor materials, and IC design [2] - The low-altitude economy is expected to accelerate following the announcement of six pilot cities in November 2024, with strong expectations for catch-up performance in ground takeoff and landing facilities and low-altitude aircraft [2] Group 3 - The technology growth sector showed active performance, while cyclical industries lagged. The market maintained an upward trend, with the ChiNext index leading gains. The total trading volume approached 1.3 trillion, indicating a relatively high level. Among 31 primary industry sectors, leading sectors included communication, defense, electric equipment, banking, and machinery, primarily technology growth sectors. In contrast, lagging sectors included beauty care, non-ferrous metals, steel, petrochemicals, and transportation, which are mainly cyclical sectors [3]

医药板块 2024 年报及 2025 年一季报业绩总结：创新药 高景气，多个细分板块或迎来拐点 20250508 摘要 • 2025 年 Q1 医药行业整体归母净利润下滑，但创新药、CXO（康德带 动）、医疗耗材及医院相关业务表现突出，国泰海通重点推荐创新药、 CXO、器械国产替代及部分消费医疗领域公司，维持恒瑞医药等增持评级， 并推荐药明生物和康德等 CXO 公司。 • 2025 年上半年上游产业受国产替代趋势驱动，百普赛斯和纳微等公司经 营出现拐点。自主可控政策、关税及国产性能提升推动品牌力和高性能公 司提高市场份额，稳定价格与毛利率，科思创、阿拉丁等企业值得关注。 • 疫苗板块受反腐压力及消费降级影响承压，智飞生物及万泰生物业绩增速 放缓，需关注应收账款问题。未来增长依赖创新品种如带状疱疹疫苗，以 及中国儒意出海机会。生物制品行业预计下半年业绩回升，龙头公司量价 逻辑依然有效，博雅收购天坛等寡头集中趋势明显。 • 中药板块受反腐影响严重，院内企业业绩下滑，但阿胶、明锐制药和白云 山保持增长。2025 年预计稳定增长，关注零售药店龙头及国企改革相关 企业如太极集团、昆药集团和东阿阿胶，中药材成本回落亦有助 ...

Investment Rating - The industry investment rating is "stronger than the market" indicating an expected performance that exceeds the market by more than 5% over the next six months [49]. Core Views - The chemical agents and blood products sectors are expected to perform outstandingly in 2024, with positive revenue and profit growth reported in the CXO and medical services (hospitals) sectors for Q1 2025 [4][5]. - The biopharmaceutical industry is anticipated to outperform the market overall [4]. Summary by Sections Industry Performance - As of April 30, 2025, 467 A-share biopharmaceutical companies reported their 2024 annual and Q1 2025 results. In 2024, 28 companies had revenue growth exceeding 30%, while 50 companies exceeded 20%, and 113 companies exceeded 10%. Approximately 220 companies reported positive revenue growth, while 246 experienced negative growth. On the profit side, 102 companies had profit growth over 30%, 132 over 20%, and 172 over 10%, with 218 maintaining positive profit growth and 249 facing negative growth [4]. - In Q1 2025, 24 companies reported revenue growth over 30%, 52 over 20%, and 109 over 10%, with 214 maintaining positive revenue growth and 251 reporting negative growth. For profits, 100 companies had growth over 30%, 120 over 20%, and 159 over 10%, with 220 maintaining positive profit growth and 240 facing negative growth [4]. Investment Strategies - Focus on "innovation," "going global," "equipment upgrades," and "consumption recovery." - **Innovation**: Invest in globally competitive innovative drugs and categories with significant market potential. Recommended companies include BeiGene, Dongcheng Pharmaceutical, and others [7]. - **Going Global**: Explore overseas markets for long-term opportunities, with companies like Mindray Medical and others highlighted [7]. - **Equipment Upgrades**: Expect support for medical equipment updates from central and local government financing, with companies like Mindray Medical and others recommended [7]. - **Consumption Recovery**: Anticipate recovery in quality sectors like ophthalmology and medical aesthetics, with companies such as Puri Eye Hospital and others suggested [7]. Key Companies to Watch - **Nocare Biopharma**: Expected to achieve over 1 billion yuan in revenue from its core product, with a 49% year-on-year sales increase. The company reported a gross margin of 86.3% and a significant reduction in losses [8]. - **Sihuan Pharmaceutical**: Strong fundamentals with core products maintaining growth, and a robust pipeline expected to yield multiple approvals from 2025 to 2027 [11]. - **China Biopharmaceutical**: Rapid revenue growth with an increasing share of innovative products, and a strong pipeline in oncology [13]. - **Aibo Medical**: Anticipated growth in high-end artificial lenses and recovery in consumption due to aging trends [23]. Industry News Highlights - BeiGene's Sonrotoclax NDA application has been accepted for review, indicating potential market entry for a new treatment for CLL/SLL [30]. - Novartis' Pluvicto has received acceptance for a new indication in China, expanding its market potential [31]. - The partnership between Fuhong Hanlin and Sandoz for HLX13 indicates a significant milestone in the commercialization of biosimilars [33].

Investment Rating - The industry investment rating is "stronger than the market" indicating an expected performance that exceeds the market by more than 5% over the next six months [50]. Core Insights - The chemical agents and blood products sectors showed outstanding performance in 2024, while the CXO and medical services (hospitals) sectors reported positive growth in both revenue and profit for Q1 2025 [4][5]. - As of April 30, 2025, among 467 selected A-share biopharmaceutical companies, 28 companies reported revenue growth exceeding 30% for 2024, while 50 companies had growth over 20% [4]. - In Q1 2025, 24 companies achieved revenue growth greater than 30%, and 100 companies reported profit growth exceeding 30% [4]. Summary by Sections Industry Performance - In 2024, the chemical agents and blood products sectors maintained positive growth in both revenue and profit [5]. - For Q1 2025, the CXO and medical services sectors also reported positive growth in revenue and profit [5]. Investment Strategy - Focus on "innovation," "going global," "equipment upgrades," and "consumption recovery" as key investment themes [7]. - Recommended companies for "innovation" include BeiGene, Dongcheng Pharmaceutical, and others [7]. - For "going global," companies like Mindray Medical and Sinopharm are highlighted [7]. - In "equipment upgrades," companies such as Mindray Medical and Aohua Medical are suggested [7]. - Under "consumption recovery," companies like Puri Eye Hospital and Tongce Medical are noted [7]. Key Companies to Watch - **Nocera Health**: Achieved revenue of 1.009 billion yuan in 2024, with a 49% year-on-year increase in sales of its core product, Obinutuzumab [8]. - **Sihuan Pharmaceutical**: Maintained a stable performance with core products continuing to grow [11]. - **China Biopharmaceutical**: Rapid revenue growth with an increasing proportion of innovative products expected to accelerate profit growth [13]. - **Aibao Medical**: The launch of its self-developed ICL lens is expected to drive significant revenue growth [23]. Industry News Highlights - BeiGene's Sonrotoclax new drug application has been accepted for review [30]. - Novartis' Lutetium-177 injection has been accepted for a new indication in China [31]. - Fuhong Hanlin signed a licensing agreement with Sandoz for HLX13 [33]. - BeiGene won a patent dispute, strengthening its market position for its BTK inhibitor [34].

Summary of the Conference Call Industry Overview - The pharmaceutical sector is experiencing a resurgence driven by strong domestic and foreign demand, with the innovative drug segment performing particularly well. The recovery of medical insurance policies and limited impact from Sino-US trade tensions have contributed to this positive trend. Institutional holdings have notably increased [1][4][5]. Key Points and Arguments - **Innovative Drugs**: The innovative drug sector is recommended for overweight allocation due to strong demand and supply dynamics. Companies in this segment have shown better-than-expected performance, supported by favorable policy changes [1][10]. - **Medical Devices**: The electrophysiology and orthopedic consumables sectors are highlighted as areas of strong performance. Orthopedic consumables benefit from a low base and domestic substitution, while electrophysiology maintains stable growth [1][6]. - **CXO Sector**: The CXO sector has shown robust performance, with companies like Kangde Biological and LianTuo Biological reporting impressive results. The first quarter results indicate a strong growth momentum, making this sector a viable investment option [1][7]. - **Consumer Healthcare**: Overall performance in consumer healthcare is lukewarm, but leading companies like Aier Eye Hospital and JD Health have exceeded expectations, demonstrating their ability to gain market share amid a consumption downturn [1][8]. - **Upstream Supply Chain**: While overall performance in the upstream supply chain is not as strong as in innovative drugs, companies like Baipusais and Nawei Technology have shown significant competitive advantages, increasing their market share during the industry downturn [1][9]. Additional Important Insights - **Market Performance in April 2025**: The pharmaceutical sector had a lackluster performance in April, with the Shanghai Composite Index down 1.7% and the Shenwan Pharmaceutical Index down 2.1%. Notable gainers included Yipin Hong and Yong'an Pharmaceutical, both up 56% [3]. - **Investment Strategy**: The strategy suggests overweighting innovative drugs and gradually increasing allocation to reasonably valued CXO companies. Individual stock selection is recommended for consumer and upstream supply chain investments [1][10][12]. - **Monthly Portfolio Changes**: The May 2025 portfolio includes large-cap pharmaceutical stocks such as Heng Rui Pharmaceutical and BeiDa Pharmaceutical, reflecting positive changes in their fundamentals and strong R&D capabilities [2][13]. - **Rationale for Large-Cap Stocks**: The focus has shifted to larger companies due to their improved fundamentals and strong R&D capabilities, as smaller companies have already seen significant price increases [14]. - **Specific Company Recommendations**: - **Heng Rui Pharmaceutical**: Leading in R&D among traditional large enterprises, with over 100 projects in development [15]. - **Hua Dong Pharmaceutical**: Valued at approximately 16 times earnings, with a promising transition and sales growth expected [16]. - **BeiDa Pharmaceutical**: Expected to adopt more collaborative R&D approaches, making it a valuable investment at current valuations [17]. - **Xinda**: Anticipated revenue growth from 1.4 billion to 2.4 billion, with a favorable outlook due to policy improvements [18]. - **Kelong Biotechnology**: Notable performance in clinical trials, making it a strong candidate for investment [19]. - **Xinda**: Projected revenue of 40 billion in Q1, with a strong annual forecast [20]. - **Rongchang Biological**: Long-term tracking with good overseas positioning [21]. - **CXO Companies**: Notable mentions include WuXi AppTec and WuXi Biologics, recognized for their solid fundamentals [22].

Investment Rating - The report indicates a cautious outlook for the pharmaceutical industry, with a focus on recovery in 2024 after a challenging 2023 due to anti-corruption measures [6][19]. Core Insights - The pharmaceutical industry is projected to see a decline in sales revenue and net profit for 2024 compared to 2023, with total sales revenue growth at -0.46%, net profit at -6.73%, and non-recurring net profit at -11.97% [2][13]. - The fastest-growing segments in Q4 2024 are expected to be CXO, medical devices, and pharmaceutical distribution, while in Q1 2025, the growth leaders will shift to CXO, pharmacies, and pharmaceutical distribution [22]. - The report highlights a significant slowdown in growth for traditional Chinese medicine and a mixed performance across various sectors, with some showing resilience and others facing challenges [5][24]. Summary by Sector Pharmaceutical Industry - In 2024, the total revenue growth for 405 pharmaceutical companies is projected at -0.46%, with net profit declining by 6.73% [2][13]. - Q1 2025 shows a continued decline in revenue and net profit, indicating ongoing challenges [13]. Traditional Chinese Medicine - For 62 listed companies in traditional Chinese medicine, revenue and net profit are expected to decline by -3.9% and -14.6% respectively in 2024, with further declines in Q1 2025 [24][32]. Chemical Preparations - The 96 chemical preparation companies are expected to see revenue growth of 1.2% and net profit growth of 15.7% in 2024, with a slight slowdown in Q1 2025 [2][5]. Research Services - The 16 research service companies are projected to experience a revenue increase of 6.56% in 2024, despite a significant drop in net profit [2][5]. Medical Services - The 11 medical service companies are expected to face revenue growth of 1.4% in 2024, with a notable recovery in Q1 2025 [2][5]. Medical Devices - The 97 medical device companies are projected to see a slight revenue increase of 1.16% in 2024, with a decline in net profit [2][5]. Biopharmaceuticals - The 54 biopharmaceutical companies are expected to see a revenue decline of -6.9% in 2024, with a significant drop in Q1 2025 [3][5]. CXO - The 22 CXO companies are projected to experience a revenue decline of -4.14% in 2024, but a recovery is anticipated in Q1 2025 with a revenue increase of 13.1% [3][5]. Raw Materials - The 50 raw material companies are expected to see a slight revenue increase of 2.48% in 2024, with a recovery trend starting in Q1 2025 [3][5]. Pharmacies - The 7 pharmacy companies are projected to see revenue growth of 4.9% in 2024, but face challenges in Q1 2025 [2][5]. Pharmaceutical Distribution - The 22 pharmaceutical distribution companies are expected to see a slight revenue increase of 0.27% in 2024, with ongoing challenges in Q1 2025 [2][5].