CITIC Securities | Healthcare and Health Industry Core Recommendations for This Week

Pharmaceutical Industry: Continuing Optimism for Internationalization, Policy Support, and Technological Breakthroughs

Since 2020, China’s innovative drug globalization has shifted from product export to strategic and organizational collaboration. License-out transaction volume and prices are rising, with global clinical data enabling value revaluation; collaborations like Cinda and Takeda mark an upgrade to “organizational globalization.” On the technological front, frontier sectors such as small nucleic acids, IO multi-antibodies, ADCs, and GLP-1 are flourishing, continuously producing pipelines with BIC/FIC potential. Policy-wise, the efficiency of negotiations has improved and stabilized, coupled with the first-ever commercial insurance directory in 2025, expanding the volume of innovative drug releases. Based on international competitiveness, technological breakthroughs, and policy dividends, we are optimistic about leading companies with autonomous overseas expansion capabilities, platforms deeply engaged in frontier sectors, and firms maintaining profit growth through genuine innovation.

Global Perspective: Innovation Value Highlights, Chinese Strength Accelerates Penetration. Chinese pharmaceuticals benefit from “innovation upgrade + supply chain resilience.” In 2025, upfront payments for overseas licensing of innovative drugs significantly surpass last year’s total, and medical devices are actively exploring international markets. The US leads early-stage R&D and high-end pricing, but demand remains strong under patent cliffs for multinational pharma, highlighting the global cost-effectiveness of Chinese assets and broad scope for internal and external collaboration.

Domestic Value Reconfiguration: Focus on High-Quality Development, Strengthen Innovation and Compliance Foundations. ①Policy: Emphasize high-quality growth, optimize centralized procurement, diversify payment methods, and advance healthcare service reforms; ②Pharmaceutical Chain: Innovative drugs entering commercialization and volume growth phase, with attention to supply chain security; ③Medical Devices: Domestic substitution extending to mid- and high-end products, optimistic about overseas expansion, new technologies (AI, brain-machine interfaces), and M&A integration; ④Track opportunities in traditional Chinese medicine, pharmacies, and healthcare services for bottoming out and upgrading.

Globalization Value Rebuilding: Multi-dimensional Breakthroughs, Constructing a New Global Pattern. ①Innovative Drugs: Normalized business development, entering the Internationalization 2.0 era; ②Industry Chain: Demand recovery domestically and abroad; ③Active Pharmaceutical Ingredients (APIs): Addressing short-term disruptions, transitioning toward specialty APIs/CDMO; ④Medical Devices: Expanding overseas markets, parallel development of autonomous sales and business development; ⑤Blood Products/Vaccines: Overseas registration of plasma products, diversified vaccine export models.

Risk Alerts: Industry Policy Risks: Changes in research design requirements, pricing, volume-based procurement policies, and reimbursement scope and ratios due to policy adjustments. Particularly, shifts in centralized procurement and reimbursement policies significantly impact industry outlook. R&D Risks: Uncertainties in clinical trial enrollment progress, efficacy, and safety data during new drug and device development. Approval Risks: Potential delays caused by supplementary data requests and procedural changes. Macroeconomic Risks: Global economic slowdown may affect downstream demand; additional risks include international relations, climate change, inflation, exchange rates, and interest rates.

Report Source

Research Report Title: “Pharmaceutical Industry: Continued Optimism for Internationalization, Policy Support, and Technological Breakthroughs”

Publication Date: March 8, 2026

Published by: CITIC Securities Co., Ltd.

Analysts:

Yuan Qinghui SAC No.: S1440520030001

SFC No.: BPW879

Wang Zaicun SAC No.: S1440519080003

SFC No.: BVX723

Shen Yi SAC No.: S1440525080005

Tang Ran SAC No.: S1440524100001

He Juying SAC No.: S1440517050001

SFC No.: ASZ591

Medical Devices Weekly Report

Recommend continuous attention to companies actively transforming and expanding into emerging businesses, as well as stocks favored by both pharma and tech investors, which may see valuation upgrades. This week, some surgical robot companies experienced a correction after prior gains; we remain optimistic about the sector’s prospects and investment opportunities, suggesting follow-up positions. For 2026, increase allocation in the medical device sector, focusing on performance recovery, innovation, overseas expansion, M&A, and new tech directions such as surgical robots, brain-machine interfaces, and AI medical devices, which could generate several-fold gains. Long-term, investment opportunities in medical devices stem from innovation, globalization, and M&A integration. The sector’s innovation and internationalization capabilities are recognized by the market, and valuation systems are being reconstructed.

Summary: The medical device sector is at a turning point, with stocks showing performance and valuation repair potential in 2026. Focus on companies with accelerated growth in 2026 compared to 2025, which may achieve dual performance and valuation growth. In 2026, prioritize investment opportunities related to performance recovery and overseas expansion in A-shares, and in Hong Kong stocks, focus on leading companies’ listings and the profit realization and undervaluation of niche leaders.

Long-term opportunities in medical devices come from innovation, overseas expansion, and M&A, with the sector’s innovation and internationalization capabilities increasingly recognized, leading to valuation revaluation. After the surge in innovative drugs, products with global competitiveness—incremental and breakthrough innovations—are gradually gaining recognition. Some companies are actively strategizing to expand their second growth curve and achieve overseas high growth, driving valuation increases.

Continue to monitor high-potential, low-localization-rate innovative device tracks, as well as themes like M&A, brain-machine interfaces, AI medical devices, surgical robots, and exoskeleton robots. Pay attention to catalysts in clinical trials, registration, commercialization, and overseas expansion, such as PFA, RDN, TAVR products. Multiple potential catalysts could lead to several-fold stock gains, with AI medical and brain-machine interface technologies also becoming key new tech investment directions.

Risk Alerts: Industry Policy Risks: Changes in research design, pricing, volume-based procurement, and reimbursement scope and ratios due to policy adjustments. Particularly, shifts in centralized procurement and reimbursement policies significantly impact industry outlook. R&D Risks: Uncertainties in clinical trial enrollment, efficacy, and safety data during new drug and device development. Approval Risks: Possible delays caused by supplementary data requests and procedural changes. Macroeconomic Risks: Global economic slowdown may impact downstream demand; additional risks include international relations, climate change, inflation, exchange rates, and interest rates.

Report Source

Research Report Title: “Medical Devices Weekly Report”

Publication Date: March 9, 2026

Published by: CITIC Securities Co., Ltd.

Analysts:

Yuan Qinghui SAC No.: S1440520030001

SFC No.: BPW879

Wang Zaicun SAC No.: S1440521070003

SFC No.: BVA292

Zhu Hongliang SAC No.: S1440521080001

Zheng Tao SAC No.: S1440524060004

He Juying SAC No.: S1440517050001

SFC No.: ASZ591