<div id="readability-page-1"><div>Citi published a research report stating that results over the past fiscal year and the recent earnings season for 1Q have confirmed continued improvement in the fundamentals of Chinas healthcare sector, driven by innovative drugs and CDMOs (Contract Development and Manufacturing Organizations). Domestic medical technology, healthcare services and pharmacy segments have bottomed out. Innovation is beginning to generate returns, with upfront and milestone payments from licensing deals supporting earnings growth. Sales of innovative drugs are accelerating, while CXO (Contract Research, Development and Manufacturing Organization) order volumes have reached a record high.Looking ahead, the bank expects a series of near-term catalysts, including data releases at ASCO 2026, continued momentum in licensing transactions, follow-ups to the April 14 drug pricing reform, potential upward revisions to CXO guidance, and accelerated industry consolidation benefiting leaders in medical technology, services and pharmacy chains. Sector-specific headwinds, such as in-vitro diagnostics pricing, centralized procurement of biosimilars, and DRG 3.0, have largely been digested and reflected by the market.Citi updated its Hong Kong Buy list, which includes HENGRUI PHARMA (01276.HK) -0.100 (-0.155%) Short selling $12.12M; Ratio 21.490% , CSPC PHARMA (01093.HK) -0.080 (-0.976%) Short selling $37.70M; Ratio 15.148% , ASCLETIS-B (01672.HK) +0.040 (+0.236%) Short selling $1.30M; Ratio 7.245% , INNOVENT BIO (01801.HK) -1.650 (-1.833%) Short selling $167.53M; Ratio 20.401% , WUXI APPTEC (02359.HK) +0.700 (+0.518%) Short selling $57.46M; Ratio 30.178% , WUXI BIO (02269.HK) -0.260 (-0.796%) Short selling $46.17M; Ratio 14.576% , ALI HEALTH (00241.HK) -0.060 (-1.304%) Short selling $65.50M; Ratio 28.289% , MEDBOT-B (02252.HK) -0.740 (-2.550%) Short selling $2.35M; Ratio 3.028% , MINDRAY BIO-MEDICAL (300760.SZ) -3.070 (-1.799%) , AIER EYE (300015.SZ) 0.000 (0.000%) and YIFENG PHARMACY (603939.SH) +1.010 (+4.545%) . Its Top Sells include CR MEDICAL (01515.HK) 0.000 (0.000%) Short selling $340.78K; Ratio 19.783% and BLOOMAGE BIOTECH (688363.SH) -0.800 (-1.913%) . (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-11 12:25.) (A Shares quote is delayed for at least 15 mins.)</div></div>

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Citi's research report highlights ongoing improvements in China's healthcare sector, driven by innovative drugs and CDMOs. Key segments have stabilized, with sales of innovative drugs accelerating and record CXO order volumes. Upcoming catalysts include data releases and licensing momentum. Citi updated its Hong Kong Buy list, featuring top picks WUXI APPTEC, WUXI BIO, and ALI HEALTH, while noting sector-specific challenges have been largely absorbed by the market.

AASTOCKS News

WUXI APPTEC

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Bosera Hang Seng Health Care ETF(QDII)

Yinhua CSI Innovative Drugs Industry ETF

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ChinaAMC SSE Health Care ETF Initiating Fund

ICBCCS SSE STAR Biology and Medicine ETF

China Merchants CSI Biotechnology Theme ETF

Founder Fubon CSI Medicine and Medical Device Innovation ETF

Bosera Hang Seng SCHK Innovative Drug Select ETF

Guotai SSE STAR Brand Name Drug ETF

China Universal CNI HK Connect Innovative Drugs Industry ETF

Hwabao WP Hang Seng SCHK Innovative Drug Select ETF

Tianhong CNI BIOMEDICINE ETF

ChinaAMC Hang Seng Biotechnology Technology ETF(QDII)

Penghua CSI HK Connect Health Care Composite ETF

E Fund CSI 300 Health Care ETF

China Universal 800 Health Care ETF

Hwabao WP CSI Pharmaceuticals ETF

China Southern Hang Seng Biotech ETF(QDII)

Huatai-PB Hang Seng Innovative Drugs Industry ETF(QDII)

Ping An CSI Medicine and Medical Device Innovation ETF

Guotai CSI Bio-medicine ETF

Huaan Hang Seng Biotech ETF

Citigroup

WUXI BIO

ALI HEALTH

HENGRUI PHARMA

Hengrui Pharma

CSPC PHARMA

ASCLETIS-B

INNOVENT BIO

MircroPort Medbot-B

Mindray

Aier

Yifeng Pharmacy

CR MEDICAL

Bloomage Biotech

CITIGROUP INC 6.250 NON CUM SER II PFD WI

Citi: Fundamentals of China Healthcare Sector Continue to Improve; Top Picks WUXI APPTEC , WUXI BIO , ALI HEALTH