Institution: China's Pharmaceutical Industry Innovation Development Trends Remain Unchanged

By 2025, China’s pharmaceutical industry will enter a new stage of “improving quality, ensuring supply, controlling costs, and correcting deviations,” characterized by “slower growth, optimized structure, innovation-led development, and compliance.” Policy guidance, market demand, and technological change will deeply intertwine, accelerating the restructuring of the industry landscape. This presents new challenges for industry development but also creates structural opportunities for leading companies with core competitiveness.

Aijian Securities believes that recent tensions in the Middle East have intensified, energy supplies are limited, and global economic development faces uncertainties. In the short term, market trends are mainly influenced by international situations and trading factors. Investment opportunities should focus on price-inflated products like gloves and vitamins. In the long term, China’s pharmaceutical industry will continue its trend of innovative development, and after market clearing, there may be opportunities for long-term strategic positioning. In 2026, the outlook remains optimistic for Chinese innovative drugs going global, with particular attention to investment opportunities in core sectors such as ADCs, bispecific antibodies, small nucleic acids, and weight-loss drugs.

Ping An Securities believes that: 1. The global competitiveness of Chinese innovative pharmaceutical companies continues to improve. The main innovation themes can be grasped from two dimensions: treatment areas and technological platforms. (a) In potential treatment areas, besides popular existing fields like oncology and immunology, attention can be given to metabolism (e.g., weight loss), chronic diseases (e.g., hypertension, hyperlipidemia), and central nervous system (e.g., Alzheimer’s, Parkinson’s). (b) In potential technological platforms, focus on small nucleic acid drugs, radiopharmaceuticals (RDC), and CAR-T therapies. 2. Regarding CXO and upstream sectors: industry environment shows slight growth in pharmaceutical financing, with a rebound in BD transactions and H-share IPOs, which energizes innovation. Orders are also showing signs of recovery. 3. Medical devices: In the short term, the domestic market faces some pressure due to policy impacts. However, with the continued implementation of policies against “involution,” most sectors are consolidating through centralized procurement, and companies are continuously innovating and expanding internationally. The industry fundamentals are expected to improve, with opportunities for marginal performance improvements to be monitored.