CCB International released a research report maintaining a cautiously optimistic stance on China's pharmaceutical industry. The firm noted that since early 2025, Hong Kong biotech stocks have risen an average of 137%, primarily benefiting from cash returns from innovative drug licensing deals and remaining unaffected by any potential U.S. tariffs.

The sector has experienced recent corrections due to: 1) Some major biotech companies' first-half 2025 results showed weaker-than-expected drug sales, including Chi-Med (00013); 2) Market concerns over Trump's planned phased implementation of drug tariffs, which could reach 150% within 18 months and eventually rise to 250%.

The firm's preference lies in innovative sectors that demonstrated strong first-half 2025 performance. Among these, BeiGene (06160) has a target price of HK$230 with an "Outperform" rating. The company showed robust first-half results, raised its 2025 gross margin guidance despite U.S. tariff impacts, and achieved positive cash flow for the first time.

The firm expects Akeso (09926) to report adjusted earnings of approximately RMB 23 million for the first half, primarily driven by revenue growth from its AK104 and AK112 drugs, with an "Outperform" rating.

CCB International raised its target price for Innovent Biologics (01801) by 10%, from HK$100 to HK$110, maintaining an "Outperform" rating. The firm expressed high confidence in the company achieving its full-year product revenue growth forecast of 37% year-over-year.

The firm continues to monitor licensing transactions for Chinese innovative drugs and noted that increased subsidies for high-priced innovative drugs could drive sales volume growth. This involves companies including CAR-T (Shanghai) Biotechnology (02171), Fosun Pharma (02196), JW Therapeutics (02126), and Eucure Biopharma (06990).