Guoxin Securities: Opportunities in CXO and Medical Device Sectors, Focus on Innovative Drug Industry Chain and Low-Valuation Sectors

Guoxin Securities released a research report stating that domestic innovative drugs have excellent clinical data, continue to expand overseas, and their R&D capabilities are recognized by multinational pharmaceutical companies. CXO remains the strongest investment theme in the pharmaceutical sector. Global investment and financing are improving, and domestic R&D demand is warming up, ensuring steady mid- to long-term competitiveness. Aging drives increased demand for home-use medical devices, and policies favor leading chain pharmacies. Surgical robots receive policy support, and domestically produced endoscopes and orthopedic systems are accelerating their overseas expansion.

Guoxin Securities’ main points are as follows:

Continuous advancement in innovative drug clinical development

Recently, domestic innovative drugs have shown outstanding clinical data at academic conferences, with attention recommended for major events like ASCO in Q2. Since Q1 2026, the trend of domestic innovative drugs going abroad continues. Multiple project cooperation agreements based on technological platforms demonstrate that China’s innovative drug R&D capabilities are increasingly recognized by multinational pharmaceutical companies. The efficiency and cost advantages of Chinese innovative drugs are being consistently reflected.

Focus on CXO industry investment opportunities

Based on short-term industry performance and long-term global competitiveness, the bank believes CXO remains the strongest investment theme in the current pharmaceutical sector. From the R&D perspective: internationally, investment and financing are improving, and global pharmaceutical R&D is gently recovering; domestically, innovative drug R&D is thriving, driving a rebound in preclinical demand and rapid growth in clinical approval numbers. From the D and M segments: in small molecules, China’s strong chemical capabilities, sufficient compliant production capacity, and skilled engineering workforce ensure medium- to long-term competitiveness; in large molecules, the industry is developing rapidly, with increasing cooperation between Chinese companies and MNCs. Recommended stocks include WuXi AppTec, WuXi Biologics, Kelun Pharma, Proya Pharmaceuticals, Kanglong Chemical, and Zhaoyan New Drug.

Optimistic about the consumer-driven and undervalued home-use medical devices and chain pharmacies

With deepening aging and the release of popular products, the home-use medical devices sector shows long-term industry potential and short- to medium-term structural growth. Improving domestic consumption is expected to boost demand for home-use devices. Favorable companies include Yuwell Medical, Rymate, Kefu Medical, Sannuo Bio, among others, which have well-established high-end product layouts domestically and rapid overseas expansion. Recently, nationwide policies for retail pharmacies have promoted industry compliance, professionalism, and concentration. Under industry consolidation, leading chain pharmacies are expected to leverage strong M&A capabilities, efficient supply chains, and management models to gradually increase market share. Focus on top chain pharmacies with margin improvement and strong cross-regional operations, such as Yifeng Pharmacy, Lao Bai Xing, and Da Shen Lin.

Focus on surgical robot investment opportunities

On January 20, the National Healthcare Security Administration issued the “Guidelines for the Establishment of Pricing Items for Surgical and Therapeutic Assistance Medical Services (Trial)”, which set pricing standards for navigation, participation, and precise execution, breaking traditional restrictions related to surgical approaches, application sites, and brands (domestic and foreign). This allows innovative intelligent products to be used clinically with reasonable fee standards. Domestic surgical robots, including endoscopes and orthopedic systems, are accelerating their overseas expansion. As of February 12, MicroPort’s TiRobot surgical robot has surpassed 200 global commercial orders, covering nearly 50 countries and regions, with nearly 130 units installed commercially. Tianzhi Hang’s orthopedic surgical navigation and positioning system and toolkit have obtained CE certification and are expanding into overseas markets through multiple channels.

Investment portfolio as of March 2026

A-shares: Mindray Medical, United Imaging Healthcare, WuXi AppTec, New Industry, InnoCare Pharma, Aide Biological, Yaokang Biological, KingMed Diagnostics, Aier Eye Hospital, Yuwell Medical, Yifeng Pharmacy, Da Shen Lin; H-shares: Innovent Biologics, Kelun-Bare Biopharmaceuticals, Hutchison China MediTech, Conba Biotech, Sihuan Pharmaceutical, Guoshengtang, iKang Healthcare.

Risk warnings: R&D failure risk; commercialization underperformance risk; geopolitical risks; policy risks exceeding expectations.