The analyst rating is based on the muted performance of China's healthcare sector in 2026, with a focus on the CRO/CDMO segment and biotech stocks showing positive returns due to improved earnings visibility. The broker favors CDMO companies for their supportive earnings cycle and selectively positions in pharmaceutical and biotech firms, anticipating key clinical data releases and licensing progress. The weak domestic hospital environment and ongoing reimbursement controls are offset by opportunities for companies with overseas growth potential.
