中国医疗健康-2025 年上半年业绩简述：子行业财务分化表明创新是终极驱动力-China Healthcare-1H25 results in a nutshell Subsector financial divergence implies innovation is the ultimate driver

Summary of J.P. Morgan's China Healthcare Sector Conference Call Industry Overview - The conference call focused on the China Healthcare sector, particularly the biotech and pharmaceutical subsectors, which have shown significant financial performance in the first half of 2025 (1H25) [1][4]. Key Financial Performance - The MSCI China Healthcare Index and Hang Seng Healthcare Index have rallied over 70% and 100% respectively year-to-date [1]. - Most companies in the China healthcare sector met or slightly exceeded financial expectations for 1H25, with biotech companies showing solid growth in both top-line and bottom-line metrics [1][4]. Subsector Insights - Biotech: Remains a strong performer with robust growth driven by out-licensing, efficiency improvements, and cost control. Companies like Kelun Biotech, RemeGen, and Innovent reported results that met or exceeded expectations, prompting raised price targets [4][5]. - CXO: Continued positive momentum with companies like WuXi AppTec, WuXi Bio, and WuXi XDC exceeding market expectations and raising FY25 guidance [6]. - Pharma: Experienced slight revenue pressure, potentially due to volume-based procurement (VBP), but net profit showed mild recovery year-over-year (YoY) and quarter-over-quarter (QoQ) [5]. - Medtech: Reported mixed results with some companies experiencing revenue growth while others faced declines. The competitive landscape is shifting, with United Imaging gaining market share [6]. - Diagnostics: Faced overall pressure with significant sales declines for key players due to price reductions and policy changes [12]. Market Dynamics and Future Outlook - The Hang Seng Healthcare Index saw a 10% surge in the last 30 days, indicating a search for broader catalysts to sustain growth [4]. - Upcoming events such as WCLC'25 and ESMO'25 are expected to be significant catalysts for the sector [4]. - The sector is also looking forward to outcomes from NRDL negotiations and the drug coverage list from commercial health insurance in late 2025 [4]. Company-Specific Highlights - Innovent is highlighted as a top pick due to its diversified and innovative pipeline [4]. - Akeso showed potential despite results falling short of expectations, with promising data from its HARMONi-A trial [4]. - Hengrui is pursuing an independent global expansion strategy, which may lead to increased licensing income in the future [5]. Risks and Challenges - The pharmacy sector is expected to see consolidation, with an anticipated 100,000 store closures in 2025 and 2026 [6]. - Consumer sentiment remains weak, impacting medical services and growth for companies like Topchoice and Aier [6]. Conclusion - The China healthcare sector is poised for further growth, driven by innovation and upcoming catalysts, despite facing challenges in certain subsectors. The overall sentiment remains optimistic, particularly for biotech and CXO companies, while pharma and diagnostics may require strategic adjustments to navigate current pressures [1][4][6].