As the Q1 2026 financial reporting period approaches, Shenwan Hongyuan has released a research report indicating that by April 12, a total of eight listed pharmaceutical companies had issued performance forecasts for the first quarter of 2026. Among these, six companies reported year-on-year profit growth, while two experienced a decline. Analysis by sector suggests that the performance of innovative drug companies, CXO (Contract X Organization) firms, and upstream suppliers is expected to exceed expectations and is highly recommended. The growth in the CXO sector is primarily attributed to favorable conditions in the global innovative drug market, strong growth in new contract signings, and a continued upward trend in pharmaceutical investment and financing both domestically and internationally. Key points from Shenwan Hongyuan's report are as follows:

Performance Forecast Releases: By April 12, eight listed pharmaceutical companies had issued performance forecasts for Q1 2026. Based on the median disclosed net profit attributable to shareholders, all eight companies were profitable. Six reported year-on-year profit growth, while two saw a decline.

Earnings Predictions: The institution provided forecasts for 28 listed pharmaceutical and biotech companies for Q1 2026. The predicted growth rates for net profit attributable to shareholders are categorized as follows: 1) Four companies are expected to have growth rates of 40% or higher: Xingqi Eye Drugs, Purui Si, Saifen Technology, and Hongyuan Pharmaceutical. 2) Nine companies are forecasted to have growth rates between 20% (inclusive) and 40%: Hengrui Pharmaceuticals, Jibeier, Jianyou Shares, Bide Pharmaceuticals, Haoyuan Pharmaceutical, Jiankai Technology, Teyi Pharmaceutical, Zuli Pharmaceutical, and Jiuzhitang. 3) Seven companies are predicted to have growth rates between 10% (inclusive) and 20%: Jingxin Pharmaceutical, Enhua Pharmaceutical, Huadong Medicine, Tongce Medical, Yiling Pharmaceutical, Dong-E-E-Jiao, and TASLY. 4) Three companies are expected to have growth rates between 0% (inclusive) and 10%: Kangchen Pharmaceutical, Aier Eye Hospital Group, and Aoruite. 5) Four companies are forecasted to turn a profit compared to a loss: Microcore Bio, Zijing Pharmaceutical-U, MediciNova, and Oulin Bio. Additionally, Biocytogen did not disclose its Q1 2025 net profit. The institution predicts its Q1 2026 net profit attributable to shareholders will be 100 million yuan, exceeding its H1 2025 figure of 48 million yuan.

Sector Performance Outlook: The performance of the innovative drug, CXO, and upstream sectors in Q1 2026 is anticipated to surpass expectations. The growth in the CXO sector is mainly driven by the sustained positive momentum in the global innovative drug industry, robust growth in new orders, and a continuous rise in pharmaceutical investment and financing. According to Arterial Orange data, global biopharmaceutical financing in Q1 2026 reached $7.573 billion, a year-on-year increase of 2.7%. Furthermore, research, development, and licensing activities in the innovative drug sector remain active. Data from the丁香园 database shows that the number of new drug clinical trial registrations with the CDE in China reached 620 in Q1 2026, a 39.0% year-on-year increase. Chinese companies completed 53 pharmaceutical transactions in Q1 2026, a 60.6% year-on-year rise, with a total deal value of $52.44 billion, up 43.5% year-on-year.

Investment Analysis Opinion: The institution strongly recommends focusing on innovative drugs, CXO, and upstream suppliers. Recommended companies in the innovative drug sector include BeiGene-U, Hengrui Pharmaceuticals, Aidi Pharmaceutical, and Microcore Bio. In the CXO sector, recommended companies are WuXi AppTec, Pharmaron, Asymchem, Purui Si, MediciNova, Innoforce, and Biocytogen. Recommended upstream companies include Haoyuan Pharmaceutical, Saifen Technology, and Jiankai Technology.

Risk Warning: Potential risks include price reductions from centralized procurement, research and development failures, and performance falling short of expectations.