Jiangyin International: Trump's increased tariffs on pharmaceuticals have limited impact on China's pharmaceutical industry, suggesting a focus on AKESO and others
Jiangyin International released a research report stating that Trump's imposition of a 100% tariff on pharmaceuticals has limited impact on Chinese medicine, suggesting attention to AKESO, Kelun-Biotech, and Rongchang Bio, among others. The bank believes that the innovative drug and CXO sectors are minimally affected in the short term, but long-term attention should be paid to policy changes. Multiple catalysts are expected in the fourth quarter of 2025, including the ESMO conference and the results of medical insurance negotiations. For the medium to long term, it recommends 3SBio and Deking Pharmaceutical-B, among others
According to the Zhitong Finance APP, Jiayin International released a research report stating that Trump announced a 100% tariff on all brand/patented drugs starting in October, unless the manufacturer is building production facilities in the United States (including those under construction). This tariff policy does not apply to generic drugs, biosimilars, and active pharmaceutical ingredients (APIs) and other intermediates.
Jiayin International believes that this will have a limited impact on China's innovative drug industry chain, and there is no need for excessive concern: 1) Innovative drugs: Currently, most self-developed overseas products have either built their own production capacity in the U.S. or have outsourced production to local CMO companies, while most domestic innovative drugs going overseas adopt a BD model. 2) CXO: Export products mainly consist of APIs/raw herbal extracts, which are currently unaffected, while the export proportion of formulations/final products is relatively low. It will take time for downstream MNC customers to invest in building factories, so the direct impact on CXO orders in the short term is limited. In the long term, policy changes may also affect their factory construction pace.
Catalysts for the sector in the fourth quarter of 2025: 1) The ESMO conference will be held in mid to late October, and the bank recommends focusing on companies with significant data readouts such as Akeso (09926), Kelun-Biotech (06990), and Rongchang Bio (09995); 2) The results of medical insurance negotiations and the first version of the commercial insurance innovative drug catalog will be announced in October-November.
For the medium to long term, the following sub-sectors are recommended: 1) Innovative drugs: 3SBio (01530) and Eucure Biopharma-B (06996) have rich short-term catalysts, and their valuations have not yet reflected the value of core blockbuster products; Innovent Biologics (02096), Hutchison China MediTech (00013), and Legend Biotech are significantly undervalued, with clear long-term growth logic; 2) CXO: Leaders in sub-sectors benefiting from high downstream prosperity and marginal recovery in financing, such as WuXi AppTec (02268)
