EB SECURITIES released a research report stating that since the start of autumn in 2025, as temperatures gradually drop, flu cases have shown a significant upward trend across regions. Additionally, influenza virological surveillance results differ notably from previous years. In Week 44 of 2025, a total of 20,321 influenza-like illness (ILI) specimens were tested, with A(H3N2) being the predominant positive strain. The recent surge in flu cases may heighten public and market attention, driving demand for prevention, treatment, and diagnostic products. Investment opportunities in flu vaccines, virus testing, cold medicines, and antiviral drugs are worth noting, along with blood products as a preventive measure for complex scenarios. Key insights from EB SECURITIES are as follows:

**Rising Flu Incidence Rates** According to the National Influenza Center’s weekly report, in Week 44 of 2025 (October 27–November 2), the ILI% (Influenza-Like Illness percentage) reported by sentinel hospitals in southern provinces was 4.6%, higher than the previous week (4.1%) and above the levels seen in 2022 and 2024 (3.1% and 3.3%), though lower than 2023 (5.9%). In northern provinces, the ILI% reached 5.1%, exceeding the prior week (3.7%) and surpassing 2022–2024 levels (2.5%, 4.4%, and 3.5%).

**Higher-Than-Historical ILI% and Strain Shift Suggest Major Flu Season Risk** Since autumn 2025, flu cases have risen sharply with cooling temperatures, indicating a potentially more severe outbreak than in previous years. The dominant strain, A(H3N2), differs from past trends, increasing the risk of breaching herd immunity. While predicting respiratory virus outbreaks remains challenging due to strain variations and immunity factors, flu trends typically persist for weeks, signaling a heightened risk for 2025.

**Investment Recommendations** 1) **Flu Vaccines**: With low domestic penetration, high flu incidence could boost demand. The flu vaccine sector, a global blockbuster market, still has significant growth potential in China. As the 2025 flu season intensifies, vaccine demand may surge, benefiting companies like **Hualan Vaccine (301207.SZ)**, **Baike Biotech (688276.SH)**, and **Jindike (688670.SH)**.

2) **Virus Testing**: Demand for respiratory virus differentiation may drive growth for diagnostic firms. With COVID-19 still present and flu A/B and RSV becoming active, accurate testing is critical for targeted treatment. Companies such as **Innotek (688253.SH)**, **Sanxiang Bio (688289.SH)**, **Biotopped (688767.SH)**, and **Wondfo (300482.SZ)** could benefit.

3) **Cold & Antiviral Drugs**: Q4 2025 marks peak demand for cold medicines, potentially exceeding expectations. Clearing pandemic-era inventory and new multi-pathogen diagnostic tools may support timely treatment, bolstering earnings for firms like **Zhong Sheng Pharma (002317.SZ)**, **CR Sanjiu (000999.SZ)**, **Kangyuan Pharma (600557.SH)**, **Fangsheng Pharma (603998.SH)**, **Jichuan Pharma (600566.SH)**, **Yiling Pharma (002603.SZ)**, **HEC Pharm (06887)**, **Livzon (600380.SH)**, and **Teyi Pharma (002728.SZ)**.

**Risks**: Lower-than-expected demand; worsening competition.