According to a research report from CMB International, the MSCI China Healthcare Index has risen 12.3% since the beginning of 2026, outperforming the MSCI China Index by 13.6%. Recent policy developments, including the designation of biomedicine as an emerging pillar industry in China's government work report, have led to a moderate recovery in risk appetite for the sector. This elevation in policy status signals a transition for the pharmaceutical industry from a "strategic emerging industry" to an "emerging pillar industry," indicating sustained policy benefits across the entire value chain. Additionally, breakthroughs in AI-driven drug development and a surge in outbound licensing deals for Chinese innovative drugs are creating dual positive momentum. CMB International expects an acceleration in fundamental improvements for the industry. The firm's top recommendations include Hansoh Pharma (03692), Innovent Bio (01801), 3SBIO (01530), Jacobio-B (01167), Wuxi XDC (02268), and Pfizer (PFE.US). CMB International assigned a "Buy" rating to these six stocks, with target prices set at HK$46.41, HK$113.86, HK$34.87, HK$10.34, HK$82, and US$35.46, respectively.