CSPC Pharmaceutical Group Ltd

Goldman Sachs has identified Chinese healthcare stocks as a key post-AI growth opportunity, with pharmaceutical names accounting for one-third of the 12 companies that made its final screen. In a Sept. 7 report, the firm's portfolio strategy research team said nearly half of MSCI China index constituents beat estimates in the second quarter, led by IT and healthcare, and that Chinese stocks' earnings tracked by Goldman Sachs grew at their highest quarterly pace in five years at 24% in the second quarter from a year ago, accelerating from just 6% in the first quarter. The analysts screened their buy-rated coverage for Chinese companies with expected earnings growth of more than 15% annually through 2027 and an increase in earnings per share estimates by a median of 7% over the past month. The four healthcare names on the list are Suzhou-based Innovent Biologics, whose earnings are expected to more than double in the year ahead with Goldman's estimate 54 percentage points above consensus; Shanghai-listed BeOne Medicines, also expected to more than double; Hong Kong-listed CSPC, forecast to grow 26%; and Hong Kong-listed Hansoh Pharma, forecast to grow 15%. Goldman expects MSCI China earnings to grow by 8% this year, far more conservative than the consensus forecast for 17%.

Shenzhen UBTECH Robotics has secured overseas orders worth more than 50 million yuan. In the Hong Kong market on the afternoon of the 10th, Huazhu Group is raising 3.35 billion yuan through renminbi-denominated corporate bonds, while CSPC Pharmaceutical Group has obtained approval from Chinese authorities for clinical trials of a Parkinson's disease treatment and a hormone therapy drug. Wharf REIC is selling the Singapore shopping mall Scotts Square. Share buybacks in the Hong Kong market totaled 25 billion yen across 107 stocks. On the Chinese mainland, the Trump administration has demanded that Ford cut ties with Chinese companies, and the number of foreign visitors entering the mainland visa-free from January to August rose 27 percent.

CSPC Pharmaceutical announced that its interim profit increased 2.4 times compared with the same period last year. The rise was mainly driven by higher licensing fee income, reflecting an improvement in the company's earnings structure. Detailed figures and the reporting period were not disclosed, but a substantial profit expansion in the interim results was confirmed.

In early trading on August 20, innovative drug stocks surged at the open. Sanyuan Gene, Jiankai Technology, Walvax Biotechnology, Laimei Pharmaceutical, CanSino Biologics, Youcare Pharmaceutical, Shuanglu Pharmaceutical, and Baike Bio hit their daily limit up at the open, while Zhifei Biological, CSPC Innovation, and Kangtai Biological rose more than 10%. On the news front, Merck and Moderna announced on Wednesday that the first Phase III clinical trial of their jointly developed mRNA personalized cancer vaccine, intismeran autogene, produced preliminary positive results. Moderna's stock price soared nearly 180% in overnight U.S. trading. Among exchange-traded funds, the GF Hong Kong Innovative Drug ETF rose as much as 7%, the GF Hang Seng Biotech ETF and GF Medical ETF rose as much as 6%, and the GF Innovative Drug ETF and GF Pharmaceutical ETF followed higher. On the industry side, innovative drug listed companies have been releasing their 2026 interim reports and earnings forecasts in a concentrated manner. The industry is officially welcoming a triple earnings inflection point: commercialization of blockbuster single products, realization of overseas business development deals, and high prosperity across the entire upstream CXO chain. Blockbuster products such as zanubrutinib and mazdutide have achieved scaled profitability, while CSPC Pharmaceutical Group, Hengrui Pharmaceuticals, and Innovent Biologics have successively landed overseas business development deals worth billions of dollars. CXO leaders have seen profits and orders simultaneously hit record highs.

In the first half of 2026, the A-share Shenwan pharmaceutical and biotech sector remained sluggish, with the index falling 14.11% year-to-date, but the innovative drug supply chain bucked the trend. Traditional pharma companies faced operational pressure: Pian Zai Huang reported its first-ever decline in both revenue and net profit since listing, while Tong Ren Tang saw its revenue drop for the first time in five years. In contrast, BeiGene achieved its first full-year profit, and Hengrui Medicine's innovative drug sales exceeded 60% of total revenue for the first time. In the first half, total out-licensing deal value for domestic innovative drugs reached 99.7 billion dollars, roughly double the full-year total for 2024. This included an 18.5 billion dollar deal between AstraZeneca and CSPC Pharmaceutical Group, and an 8.5 billion dollar deal between Eli Lilly and Innovent Biologics. On the industrial capital front, 145 A-share pharma and biotech companies implemented share buybacks in the first half, totaling over 13.3 billion yuan, with innovative drug and CXO firms leading the charge. The secondary market's valuation logic is shifting from pipeline expectations to commercialization and overseas delivery. In the last week of June, the Shenwan pharmaceutical and biotech index rebounded 10.53% in a single week, while the innovative drug segment surged 17.06%.

The Sci-Tech Innovation Board Medical ETF Huaxia has recorded net capital inflows for nine consecutive trading days, totaling 125 million yuan, with an average daily net inflow of 13.85 million yuan. In related news, the newly added negotiated drugs in the 2025 medical insurance drug catalog have been stocked at 310,000 designated medical institutions, with over 12 million patient visits using the new additions. From January to May, national medical insurance fund spending on related new drugs reached 2.636 billion yuan, driving drug sales of 3.946 billion yuan. The first commercial insurance innovative drug catalog included 19 drugs, and as of the end of May, they have been stocked at 1,486 designated medical institutions, with over 100 inclusive insurance products covering drugs in the catalog. The National Healthcare Security Administration stated that adjustments to this year's medical insurance catalog and commercial insurance innovative drug catalog have begun, with a total of 818 application materials received, and the new catalogs are expected to be released in November. Guosheng Securities noted that domestic innovative drugs are actively engaging in external collaborations. Insilico Medicine reached a deal with Takeda worth up to approximately 600 million US dollars, while CSPC Pharmaceutical Group reached a deal with AstraZeneca worth up to 1.77 billion US dollars. The overseas expansion is extending from single-product licensing to platform capability output, including AI-driven drug discovery and small nucleic acid delivery.

The innovative drug sector has staged a strong rebound after an earlier correction, with the SSE STAR Market Biomedical Index rising 1.10%. In the first half of 2026, the total value of China's out-licensing deals approached 100 billion US dollars, and Chinese pharmaceutical companies occupied eight of the top ten global pharmaceutical transactions, indicating that the trend of innovative drugs going overseas remains robust. Guosheng Securities noted that domestic innovative drugs continue to see active external collaborations, and platform-based technological capabilities are gaining broad recognition from overseas multinational corporations. Landmark deals such as Insilico Medicine with Takeda and CSPC Pharmaceutical Group with AstraZeneca signal that Chinese pharmaceutical companies are upgrading from single-product licensing to the out-licensing of underlying technology platforms. The Sci-Tech Innovation Board Healthcare ETF Harvest closely tracks the SSE STAR Market Biomedical Index, which selects 50 large-cap biomedical industry leaders from the STAR Market, with the top ten constituents accounting for a combined weight of 51.84%.

The U.S. Justice Department closed a criminal probe into Abbott Laboratories over its handling of a baby formula plant linked to potentially deadly bacteria and infant deaths, opting instead for civil penalties. Some prosecutors believed they had evidence to charge the company under food safety laws, but top decision makers chose to claw back money earned through federally funded nutrition programs. Separately, AstraZeneca reached a partnership worth up to $1.77 billion with China's CSPC Pharmaceutical Group to develop and commercialize kidney disease treatments, with CSPC entitled to $30 million upfront and up to $1.74 billion in milestone payments. Meanwhile, the Centers for Medicare & Medicaid Services launched a program offering GLP-1 weight-loss drugs to Medicare enrollees for $50 per month starting July 1, benefiting several million Americans and extending through 2027. The Trump administration also proposed reducing payment rates for drugs under the 340B program, aiming to cut U.S. drug spending by roughly $5.7 billion as early as next year.

AstraZeneca has reached a partnership worth up to $1.77 billion with CSPC Pharmaceutical Group to develop and commercialize treatments for kidney diseases. Under the deal, AstraZeneca will have the option to obtain exclusive global rights to a preclinical small nucleic acid drug candidate and ex-China rights to a second experimental therapy. CSPC is entitled to $30 million upfront and up to approximately $1.74 billion in additional payments upon meeting certain development and commercial milestones. The agreement comes as Western pharmaceutical companies increasingly seek promising drug candidates in China, a trend that has drawn scrutiny from U.S. lawmakers.

The State Council has approved the '15th Five-Year Plan' for building a sports powerhouse, calling for improvements to the public service system for national fitness, reforms to the competitive sports management system, strengthened youth sports programs, and the revitalization and development of the 'three major ball sports'—football, basketball, and volleyball. Lithography giant ASML has raised its full-year revenue guidance, primarily driven by sustained demand for advanced lithography equipment related to AI chip manufacturing. The China Securities Regulatory Commission has approved the registration application of Unitree Technology for its initial public offering and listing on the STAR Market. The company's humanoid robot shipments in 2025 have already exceeded 5,500 units, ranking first globally in the industry. CSPC Pharmaceutical's holding subsidiary, Jushi Biotech, has signed an agreement with AstraZeneca to carry out strategic cooperation in the field of novel small interfering RNA drug candidates. AstraZeneca will make an upfront payment of 30 million US dollars, with potential milestone payments of up to 1.74 billion US dollars. BOE Technology Group saw a net institutional seat purchase of 1.458 billion yuan, while China Resources Microelectronics' order backlog reached a new high.