BOCOM International released a research report stating that Zhejiang Province announced its first batch of innovative medical technology insurance payment incentive directory this week, which is expected to further alleviate the difficulties of innovative drugs entering hospitals. Overseas, although the Trump administration announced a 100% tariff on imported innovative drugs, the firm believes that its overall coverage is limited and the impact on China's pharmaceutical industry chain is controllable, recommending continued attention to subsequent implementation and changes.

The report noted that the ESMO conference will be held in mid-to-late October this year. The firm recommends focusing on companies with significant data readouts, including Akeso (09926), Colibri Oncology-B (06990), and RemeGen (688331.SH). The Hong Kong pharmaceutical sector performed relatively flat in September. Starting from October, as industry catalysts increase (various academic conferences, favorable policy implementations), the market is expected to restart.

The firm continues to recommend attention to the following sub-sectors: 1) Innovative drugs: Sunshine Guojian Pharmaceutical (01530) and ALPHAMAB Oncology-B (06996) have rich short-term catalysts and valuations that do not yet reflect the value of core blockbuster products; Simcere Pharmaceutical (02096), Hutchmed (00013), and Legend Biotech are significantly undervalued with clear long-term growth logic; 2) CXO: Sub-sector leaders benefiting from high downstream prosperity and marginal financing recovery, such as WuXi Biologics (02268).