Investment Rating - The report maintains an "Outperform" rating for several companies in the innovative drug sector, including BeiGene, WuXi Biologics, Innovent Biologics, and others, while assigning a "Neutral" rating to China National Pharmaceutical Group [1]. Core Insights - The Hang Seng Healthcare Index fell by 1.4% during the week of February 2-6, 2026, outperforming the Hang Seng Index by 1.6 percentage points. Year-to-date, the Hang Seng Healthcare Index has risen by 7.0%, surpassing the Hang Seng Index by 3.4 percentage points. The report indicates a recovery in market sentiment towards the end of the week, with a focus on companies with strong earnings visibility in internet healthcare and CXO/research services [4][39]. - Notable performances among Hong Kong-listed healthcare stocks included Henlius (+11%), Ascletis Pharma (+10%), and others, while TransThera Biosciences (-15%) and MicroPort MedBot (-11%) showed weaker performance [40]. - The report highlights significant licensing deals in the biotech sector, which are expected to enhance market attention and recovery [4][39]. Summary by Sections Market Performance - The Hang Seng Healthcare Index's performance was better than the broader market, with various sub-sectors showing mixed results. Medical Services (+1.9%) and CXO/Research Services (+1.7%) performed well, while Internet Healthcare (-6.1%) and Biotech (-2.0%) lagged [4][26]. Company Highlights - Innovent Biologics is projected to achieve a total product revenue of approximately RMB 11.9 billion in 2025, reflecting a year-on-year increase of 45% [42]. - Merck reported a revenue of $65 billion for 2025, with a net profit of $18.3 billion, both meeting prior guidance [43]. - Eli Lilly's revenue for 2025 reached $65.2 billion, a 45% increase, with projections for 2026 between $80-83 billion [43][21]. Strategic Collaborations - SGB Biotech entered a global licensing agreement with Genentech for an RNAi drug, receiving an upfront payment of $200 million and potential milestone payments totaling $1.5 billion [42]. - Innovent Biologics and Eli Lilly announced a global strategic collaboration to advance innovative drugs in oncology and immunology [24].