CITIC Securities: Steady performance expectations focus on investment opportunities in the healthcare industry

The Zhitong Finance App learned that CITIC Securities released a research report saying that innovative pharmaceutical companies and companies in the global pharmaceutical industry chain are expected to continue to experience steady growth in performance over the next 3-5 years. At the same time, with the beginning of Q3 this year, the core pipeline of domestically produced innovative drugs is about to usher in heavy data readings, and the internationalization value of assets with global potential is expected to be realized at an accelerated pace. At the same time, major policy changes have also begun to gradually return to a market price pricing system based on clinical value and demand, bringing about a stable and continuous domestic pharmaceutical market environment and the main development tone of Changpo Heavy Snow, and bringing about alpha and beta with high certainty about the growth of the industry. It is recommended to focus on investment opportunities in the healthcare industry.

CITIC Securities's main views are as follows:

26Q2/H1 Looking at the overall performance of the healthcare industry, performance is expected to be stable.

The 26Q2/H1 performance of the 63 pharmaceutical companies covered was predicted. Among them, the performance of 55 companies is expected to achieve positive year-on-year growth or flat performance, and the performance of 8 companies is expected to experience negative growth/loss/continued losses (the performance caliber is mainly net profit, some companies use revenue growth indicators, and some companies without quarterly reports use semi-annual indicators). Among them, many pharmaceutical and medical companies achieved rapid performance growth or loss in 26Q2/H1. In the overall domestic demand environment where domestic demand is weak, the pharmaceutical sector continues to highlight the high degree of certainty that is just needed. Domestic creatures Pharmaceutical financing data continues to grow at a high rate. The bank believes that innovative pharmaceutical companies and companies in the global pharmaceutical industry chain are expected to continue to experience steady growth in performance over the next 3-5 years.

At the same time, with the beginning of Q3 this year, the core pipeline of domestically produced innovative drugs is about to usher in heavy data readings, and the internationalization value of assets with global potential is expected to be realized at an accelerated pace. At the same time, major policy changes have also begun to gradually return to a market price pricing system based on clinical value and demand, bringing about a stable and continuous domestic pharmaceutical market environment and the main development tone of Changpo Heavy Snow, and bringing about alpha and beta with high certainty about the growth of the industry. It is recommended to focus on investment opportunities in the healthcare industry.

Let's take a closer look:

Innovative drugs: 2026H2 The fundamentals of China's innovative drug industry are improving steadily. The core comes from improving R&D quality, verifying global value, and improving profitability. China's innovative drugs are gradually entering the “global registration+commercialization” stage. In terms of research and development, according to the ASCO conference, the 2026 ASCO China original research was selected for the number of oral presentations reached 94, Harmoni-6 was selected for Retention Session, and SKB264 defeated K-drug head-to-head, indicating that the quality of the Chinese pipeline continues to improve.

In terms of global cooperation, according to Pharmaceutical Rubik's Cube, the total license out amount for YTD China's innovative drugs in 2026 reached US$94.3 billion, +80.8% year over year, and the down payment reached US$5.50 billion, +124.2% YoY. MNC's recognition of China's innovative assets continues to grow. According to reports, innovative pharmaceutical companies such as BeiGene Shenzhou and Cinda Biotech have turned losses into profits in 2025. Looking ahead to the second half of the year and the future, with conferences such as WCLC, ESMO, ACR, and ASH being held one after another, multiple registered studies have entered the readout window, global Phase III/registered research continues to advance, and the gradual implementation of overseas commercialization is expected to jointly drive the performance of the innovative drug sector.

Pharmaceutical industry chain: With the rapid recovery of global biomedical financing, global demand for pharmaceutical research and development is gradually recovering. At the same time, combined with China's excellent and efficient CRO service capabilities, the overall growth in sector performance is expected to accelerate. On the one hand, with the boom in early research demand in 2025, we continue to be optimistic that pre-clinical CRO volume and price will rise sharply and clinical CRO will recover steadily in 2026; on the other hand, in the context of rapid growth in downstream drug development demand/commercialization volume, CDMO companies in the peptide and ADC related business are expected to perform well.

Medical industry chain: 1) Medical devices: innovative payment expansion+overseas gains. Looking ahead to the future market, innovative products and equipment will continue to be the two main lines of sector development. Specifically: ① IVD & ICL: It is expected that the results of harvesting implementation will be evident. The performance may bottom up in 2026, and the leading companies will continue to increase their market share after harvesting is realized. ② High-value consumables sector: Revenue is growing steadily, overseas sales are continuing, and profitability is gradually increasing. ③ Low-value consumables sector: After the epidemic, the sector removed inventory well and gradually entered an upward cycle. The performance was stable, and the proportion of overseas travel was high. We need to focus on exchange gains and losses. ④ Medical equipment & upstream sector: Equipment renewal policies guarantee the steady development of the industry, but high inventories take time to digest, and net interest rates are affected by collection.

2) Consumer healthcare: The consumer healthcare circuit has long slopes and heavy snow. Policies are improving in multiple dimensions, and sector allocation values are prominent. Leading companies have demonstrated resilient performance and focused on marginal improvements in the consumer healthcare sector. Specifically: ① Healthcare services: Revenue and profit improved at the same time, the bottom was established, and the recovery trend is expected to begin throughout the year. ② Household appliances: Domestic channel adjustments continue, overseas markets expand rapidly. ③ Pharmaceutical retail: Revenue is under pressure, profits have improved, and a reversal trend in the industry has emerged. ④ Internet healthcare: Benefiting from multiple benefits, we have entered the harvest period. ⑤ Chinese medicine consumer goods: The sector is under phased pressure and is about to reach an inflection point. ⑥ Medical and aesthetic sector: The sector is under pressure in stages and is expected to show a recovery trend throughout the year.

3) AI Healthcare: Improving commercialization capabilities and accelerating the restructuring of the 10-trillion pharmaceutical market. 4) Traditional Chinese Medicine Health: Innovation and transformation go far, and the “15th Five-Year Plan” opens a grand chapter.

Individual stock performance outlook:

(The performance caliber is mainly net profit. Some companies use revenue growth indicators. If 26H1 is specified, the 26H1 performance forecast is 26H1; if not specified, they are all 26Q2 performance forecasts): There are 7 companies that expect 26Q2/H1 performance to grow at 50% or lose profits; there are 8 companies that expect 26Q2/H1 performance to grow at 30-50% year-on-year; there are 26 companies that expect 26Q2/H1 performance to grow at 10-30% year on year; 14 companies are expected to grow 26Q2/H1 performance at 0-10% year on year; meter There are 8 companies that showed negative growth in 26Q2/H1 performance, and caused loss/continued losses.

Risk factors:

Geopolitical frictions heighten risks; risks of macroeconomic recovery falling short of expectations; risk of falling volume procurement prices and exceeding expectations; risk of declining financing popularity of primary market biopharmaceutical companies; risk of price reduction of high-value consumables and exceeding expectations; risk of clinical research and development failure of innovative drugs; risk of medical service health insurance policy risk; risk of medical accident risk; risk of industrial policy changes falling short of expectations; risk of medical AI development falling short of expectations; risk of commercial insurance policy progress and commercial insurance product development falling short of expectations, etc.