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TSMWhich 4 pharmaceutical stocks would you choose?
Hengrui Medicine listed on the Hong Kong stock market, unsurprisingly creating the largest IPO for pharmaceutical stocks in Hong Kong this year.
Taking advantage of this trend, let's talk about pharmaceutical stocks.
Two years ago, I just restarted my stock trading career, and pharmaceutical stocks were a heavily invested sector.
The logic at that time was relatively simple:
The largest baby boom in China was from 1962 to 1973 (1959-1961 were the three years of natural disasters), with a total of 300 million people. These people have gradually entered retirement and pension status, and the demand for pension and medical care will definitely increase.
So I heavily invested in pharmaceutical stocks, mainly focusing on the concept of the three highs (hypertension, hyperlipidemia, hyperglycemia), such as Gan & Lee Pharmaceuticals, Tonghua Dongbao, and Tasly, as well as representatives of pharmaceutical CRO and CDMO like WuXi AppTec and Asymchem.
At that time, I was most optimistic about Asymchem, WuXi AppTec, and Gan & Lee Pharmaceuticals. Ironically, Tasly and Tonghua Dongbao made a small profit (I added positions during the decline), but these three companies suffered the most losses (even after adding positions during the decline, they still lost money). Especially WuXi AppTec and Asymchem, despite having excellent financial data, were affected by factors such as the US "Biosafety Act", causing their stock prices to be more than halved.
So the biggest problem with pharmaceutical stocks is policy risk!
Whether it's domestic centralized procurement or foreign regulations, they can have a huge impact on pharmaceutical stocks.
For example, in 2022, Gan & Lee Pharmaceuticals' gross profit fell sharply due to centralized procurement, and net profit turned negative. In 2024, WuXi AppTec and Asymchem were affected by the Biosafety Act, causing their stock prices to be halved. In 2025, Trump's new drug pricing policy also led to a significant drop in medical stocks on the day it was announced.
Of course, although there are policy risks, healthcare is a basic necessity for people's livelihood and is still worth long-term attention.
1 Hengrui Medicine
2 BeiGene
3 Gan & Lee Pharmaceuticals
4 WuXi AppTec
The above are the four pharmaceutical stocks I have been paying attention to for a long time. If you were to choose an investment, which one would you choose?
My investment ranking:
1 BeiGene (referring to BeiGene in both Hong Kong and US stocks, the A-share premium is too high).
It has been growing rapidly in recent years, with its market share of innovative drugs surpassing Hengrui in 2024, and it occupies the top position in the US market for BTK inhibitors. It is one of the few pharmaceutical companies listed on the A-share, Hong Kong, and US stock markets simultaneously (with such a big move, it's not excessive for the total market value of BeiGene in Hong Kong and US stocks to catch up with A-share BeiGene!).
The risk is that the proportion of the US market share is too large. If Trump's drug pricing order is implemented (I guess it's unlikely, as forcibly lowering drug prices would make innovative drugs lose their innovation power, which is not conducive to the continuous investment in R&D by pharmaceutical companies), it may cause a significant stock price correction.
However, the large proportion of the US market share precisely shows the company's strong R&D capabilities. Achieving results in the highly competitive US market is not an easy task.
2 WuXi AppTec.
With a full industry chain layout of CRO and CDMO, it is the TSMC of the medical industry. It has a customer base of over 6000, covering the top 20 well-known pharmaceutical companies worldwide. The scale advantage is obvious.
It also has the problem of an overly large proportion of the US market share. With its global layout (Singapore, European bases), it partially hedges geopolitical risks.
3 Gan & Lee Pharmaceuticals.
In 2022, it suffered a significant loss due to centralized procurement. However, in 2024, the insulin special centralized procurement saw a price increase throughout the year, with an average increase of 31%. The profit data for the first quarter of 2025 has already shown initial results.
In the past three years, the number of employees has increased by more than 15% annually on average (in the past two years, the net profit per capita was only about 100,000 yuan, and they still significantly increased the number of employees), which shows their ambition for expansion. Coupled with the gradual retirement of the baby boomers from 1962 to 1973, the demand for medication will gradually increase.
4 Hengrui Medicine.
Financially stable, with sufficient cash flow. In recent years, it has faced problems such as the loss of R&D personnel and slow overseas market expansion (the overseas proportion is far less than that of BeiGene). The listing on the Hong Kong stock market may be paving the way for its overseas strategy in advance.
Brothers, which one would you choose? Or how would you rank them? Feel free to exchange ideas.
$HENGRUI PHARMA(01276.HK)
$WUXI APPTEC(02359.HK)
$BEONE MEDICINES(06160.HK)
$Gan & Lee(603087.SH)
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