Biopharmaceutical Industry Biweekly Report No.5 2025 (Total No.128): Annual Reporting Season Begins – Focus on Performance-Driven or Innovation-Driven Companies

Industry Review

During this reporting period, the pharmaceuticals and biotechnology industry index fell by 0.89%, ranking 16th among the 31 primary industries in the Shenwan classification, outperforming the CSI 300 Index (-1.24%). Among the sub-industries, active pharmaceutical ingredients (API) and chemical formulations led with gains of 5.86% and 2.80%, respectively; offline pharmacies and pharmaceutical distribution experienced the largest declines, with drops of 3.17% and 2.89%, respectively.

In terms of valuation, as of February 28, 2025, the PE (TTM overall method, excluding negative values) of the pharmaceuticals and biotechnology industry was 26.54x (26.68x at the end of the previous period), with a decline in valuation, which is below the average. The top three sub-industries of the SW Pharmaceuticals and Biotechnology Industry by PE (TTM overall method, excluding negative values) were Diagnostic Services (97.65x), Hospitals (41.61x), and Other Medical Services (36.90x), with a median of 27.77x, while Pharmaceutical Distribution (15.38x) had the lowest valuation.

During this reporting period, shareholders of 34 listed companies in the pharmaceuticals and biotechnology industry of the two exchanges net sold 8.07 billion yuan. Among them, 7 companies increased holdings by 4.85 billion yuan, while 27 companies reduced holdings by 12.92 billion yuan.

As of February 28, 2025, among the 501 pharmaceuticals and biotechnology industry listed companies we are tracking, 249 have disclosed their 2024 earnings forecasts. Among them, the number of companies with forecast types indicating growth, slight growth, or turning a profit are 43/6/24 respectively; there are 47 companies with a lower limit of forecasted net profit growth rate equal to or exceeding 30% and positive net profit attributable to shareholders in 2023.

Important Industry Information:

Ministry of Commerce/National Development and Reform Commission: "2025 Stabilization of Foreign Investment Action Plan"

Johnson & Johnson: IL-23 Inhibitor "Guselkumab" Approved by NMPA for Crohn's Disease Indication, as the World's First

Fosun Pharmaceutical: First-in-class New Drug "Tenapanor (Hydrochloride Tinaparo Tablets)" Approved for Marketing by NMPA

CSPC Group: New Anti-Tumor Drug "Sirolimus for Injection (Albumin-Bound Type)" Proposed for Inclusion in Breakthrough Therapy

CR Pharmaceutical: To Establish a Pharmaceutical Innovation Industry Fund in Chengdu

Investment Advice:

Currently, there are 47 pharmaceutical and biotech companies in China's A-share market with forecasted earnings growth rates of 30% or more and positive net profits in 2023. Among them, the number of companies in the chemical pharmaceuticals, medical consumables, and active pharmaceutical ingredients sub-sectors rank in the top three, with 13, 11, and 7 companies respectively. The earnings disclosure period is about to begin, and the latest clinical progress and key clinical data of innovative pharmaceutical companies will be gradually disclosed at major industry conferences. We recommend paying attention to companies with earnings that exceed expectations or demonstrate superior efficacy based on clinical data.

Risk Warning:

Policy falls short of expectations, R&D progress lags behind expectations, and market risks intensify.