On September 10th morning session, the medical sector opened lower but quickly warmed up, with the CXO concept staging a strong rebound. Joinn Laboratories (China) Co.,Ltd. hit the daily limit up, Pharmaron rose over 5%, and industry giant WuXi AppTec gained over 2%.

On the news front, Grand View Research forecasts that the global CXO market size is expected to grow from $197 billion in 2024 to $298 billion in 2030, representing a compound annual growth rate of 7%, slightly higher than the 6% CAGR for the global pharmaceutical market during the same period.

China's largest medical ETF (512170) surged over 1% in a straight line, with trading volume approaching 200 million yuan within 20 minutes of opening. Notably, during yesterday's pullback in the medical ETF (512170), over 220 million yuan in funds took advantage of the dip to increase positions.

Based on the latest institutional views, the capital-driven logic may stem from two aspects:

First, the medical device and CXO industries may be approaching a cyclical turning point. Zhongtai Securities believes that China's medical device industry remains in a rapid development phase, with the device sector expected to reach a cyclical turning point in Q3 2025. Regarding CXO, as the innovative drug industry continues to heat up and overseas demand is further released, the upstream life sciences industry is warming up, with most companies showing significant performance improvements. CXO is expected to enter a new round of upward industrial cycle.

Second, left-side positioning in the medical sector offers outstanding cost-effectiveness. Analysis points out that from interim reports, the high-value consumables segment has already shown a performance turning point, while the overall sector's stock price performance exhibits characteristics of relative underperformance compared to innovative drugs. As equipment updates gradually return to normal, combined with the recovery of in-hospital diagnostics and overseas performance release, the current medical device sector offers clear cost-effectiveness for left-side positioning.

From a valuation perspective, the CSI Healthcare Index, which serves as the underlying index for the medical ETF (512170), currently trades at approximately 36 times PE, still below the level of over 60% of the time intervals in the past 10 years, making its allocation cost-effectiveness relatively outstanding.

In a bull market's "high-to-low switch," focus on medical valuation opportunities. For allocation tools, consider China's largest medical ETF (512170) and its feeder fund (012323): focusing on "medical devices (52%) + medical services (40%)", highly correlated with AI healthcare, covering 6 leading CXO stocks. As of September 8th, the medical ETF (512170) has assets under management of 27.5 billion yuan, the largest scale in its category; since the beginning of the year, daily average trading volume reached 645 million yuan, demonstrating excellent liquidity.

Risk Warning: The medical ETF and its feeder fund passively track the CSI Healthcare Index, which has a base date of December 31, 2004, and was released on October 31, 2014. The annual performance of the CSI Healthcare Index from 2020 to 2024 was 79.67%, -14.71%, -25.1%, -24.25%, and -17.16% respectively. The index constituent composition is adjusted timely according to the index compilation rules, and historical backtesting performance does not predict future index performance. Individual stocks mentioned in the article are for display purposes only and do not constitute any form of investment advice, nor do they represent holding information or trading trends of any fund under management. The fund manager evaluates the medical ETF's risk level as R3-Medium Risk, suitable for balanced (C3) and above investors. The medical ETF feeder fund's risk level is R4-Medium-High Risk, suitable for aggressive (C4) and above investors. Please refer to sales institutions for appropriateness matching advice. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors must take responsibility for any independent investment decisions. Furthermore, any views, analyses, and forecasts in this article do not constitute investment advice to readers in any form, nor do we assume any responsibility for direct or indirect losses caused by the use of this article's content. Fund investment involves risks, past performance of funds does not represent future performance, and performance of other funds managed by the fund manager does not guarantee fund performance. Fund investment should be approached with caution.

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