CITIC International views the pharmaceutical sector's pullback as a rebalancing of industry valuation and performance, recommending 3SBIO and others

ZhaoYin International published a research report indicating that recently, the pharmaceutical sector has experienced a pullback, which is believed to be mainly due to the digestion and rebalancing of valuations and expectations. This will create a better investment window for future layouts. Looking ahead to 2026, the trend of innovative drugs going overseas will continue in the long term, with a focus on the clinical progress and data realization of pipelines that have already gone overseas as the core catalyst.

ZhaoYin International also pointed out that on the policy front, although the U.S. Biodefense Act has been signed and enacted, since it does not affect Medicaid and Medicare procurement and has clear definitions for related parties, and given that the revenue proportion of Chinese CXO companies from U.S. administrative agencies is relatively small, the actual operational impact of this act on Chinese CXO enterprises is expected to be limited.

In terms of industry outlook, ZhaoYin International stated that the layout strategy is more conservative, focusing on opportunities in undervalued stocks, recommending to buy 3SBIO (01530.HK), GUSHENGTANG (02273.HK), WUXI XDC (02268.HK), and SINO BIOPHARM (01177.HK). For the ratings and target prices of the aforementioned stocks, please refer to the separate table