Healthcare - China (H): Robust deal activity and continued R&D progress driving healthcare re-rating

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Healthcare - China (H): Robust deal activity and continued R&D progress driving healthcare re-rating

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Healthcare - China (H)

Robust deal activity and continued R&D

progress driving healthcare re-rating

Price Objective Change

CSPC: another collaboration with AstraZeneca 07 July 2026

On 2 July, CSPC announced a collaboration agreement with AstraZeneca (AZ) to leverage Equity

CSPC’s siRNA drug-discovery and extrahepatic targeted-delivery platforms. CSPC and AZ China

will co-develop PCCs for two renal disease targets. AZ will have the option to obtain Healthcare

exclusive global, or ex-China, rights for each preclinical candidate, while CSPC will retain David Li >>

China rights to one candidate. CSPC will receive an upfront payment of US$30mn and is Research Analyst

eligible for up to US$540mn/US$1.2bn in development/sales milestone payments plus Merrill+852 3508Lynch4531(Hong Kong)

potential single-digit royalties. We add the US$30mn upfront payment to our estimates davidbo.li@bofa.com

and raise our 2027 revenue/NP estimate by 0.8%/2.0%, as well as lift our long-term Sandra Sun >>

Research Analyst

sales estimates. Our PO increases to HK$7.6 from HK$6.8. However, we reiterate our Merrill Lynch (Hong Kong)

Underperform rating on CSPC given continued sales pressure on its key marketed drugs. sandra.sun@bofa.com

Ethan Cui >>

Gushengtang: footprint expansion through acquisitions ResearchMerrill LynchAnalyst(Hong Kong)

On 5 July, Gushengtang (GST) announced the acquisitions of Shahe Hospital and Beijing ethan.cui@bofa.com

Hongyang Hospital. The acquisitions will expand the company’s medical institution

network and strengthen its presence in Beijing. Mgmt. expects the acquired hospitals to