Active licensing transactions within China's pharmaceutical industry, coupled with ongoing corporate research and development efforts, are expected to drive a re-evaluation of the sector's valuation.

CSPC Pharmaceutical Group Limited (HKEX: 01093) recently announced a collaboration agreement with AstraZeneca plc (NASDAQ: AZN) to utilize its siRNA drug discovery and extrahepatic targeted delivery platform for the joint development of two pre-clinical candidate drugs targeting kidney disease. CSPC will receive an upfront payment of $30 million, along with potential development and sales milestone payments of up to $540 million and $1.2 billion, plus potential single-digit percentage royalties. The firm has incorporated the upfront payment into its forecasts, raising its 2027 revenue and net profit estimates by 0.8% and 2% respectively, and has increased its long-term sales forecast. Consequently, its price target has been raised from HK$6.8 to HK$7.6. However, due to persistent sales pressure on core marketed drugs, the firm maintains its "Underperform" rating.

The report notes that Innovent Biologics, Inc. (HKEX: 01801) announced a commercialization agreement with Eli Lilly and Company (NYSE: LLY) for the CDK4/6 inhibitor Verzenios in mainland China. In response, the firm has raised its revenue forecasts for 2026, 2027, and 2028 by 3.3%, 5.3%, and 4.7% respectively. Its price target for Innovent Bio has been increased from HK$116.8 to HK$119.2, with a maintained "Buy" rating, citing the company's rich commercial product portfolio and robust internal R&D capabilities.

Additionally, GuShenTang (HKEX: 02273) announced the acquisition of equity interests in Shahe Hospital and Beijing Hongyang Hospital. The firm has maintained its "Buy" rating and price target of HK$32.6 for the company.