China healthcare policy watch

Research evidence excerpt

China healthcare policy watch

Macquarie Equity Research

07 July 2026

Pharma, Biotech & Life Sciences

ChinaChina healthcare policy watch

Pharma re-rating in motion despite policy risks

Tony Candyce

Key Points Ren Gao

• We sense palpable interest in leading pharma on strong R&D

productivity and compelling valuations. Geopolitical risks appear

Cerina

manageable. Zhang

• We flag anti-corruption remains the key near-term risk, possibly

weighing on 1H26 earnings and 2026 guidance (to be updated in

August). Figure 1 - Covered stocks mentioned

• CSPC and Hansoh look better positioned to navigate anti-corruption

and drug price risks. Our ST pecking order: CSPC/ Hansoh > Hengrui > Stock Ticker Rating TP (LC) CP (LC) TSR

SBP. Hansoh 3692 HK OP 42.20 33.0 29.4%

Hengrui 1276 HK OP 98.00 59.8 64.8%

Hengrui 600276 CH OP 90.00 56.8 59.3%

CSPC 1093 HK OP 11.50 8.0 48.0%

Large pharma as havens despite ST China policy risks SBP 1177 HK OP 8.50 5.0 72.6%

• Chinese healthcare names have been gaining traction since late-June. Source: FactSet, Macquarie Research, July 2026

We view defensive large-cap pharma names as potential havens for Note: Prices as of close of 6 July 2026.

investors seeking relative safety. In our view, their globally competitive

R&D productivity and attractive valuations, which have contracted to

2025 pre-outlicencing levels, support this view. The much-feared US ban

on China licencing is increasingly looking untenable.

• We acknowledge anti-corruption policy risks to 1H26 earnings (likely

moderately negative) and potential subsequent 2026 guidance cuts.

• China's anti-corruption campaign has unexpectedly intensified since

April. New measures signal tighter oversight of physician engagement/

academic promotion activities by drug reps in the entire pharma sector.