China Healthcare: China Healthcare Tour Takeaways; Compelling Valuation Marks Good Entry Point

Research evidence excerpt

China Healthcare: China Healthcare Tour Takeaways; Compelling Valuation Marks Good Entry Point

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23 Jun 2026 11:25:07 ET │ 25 pages

China Healthcare

China Healthcare Tour Takeaways; Compelling Valuation Marks Good

Entry Point

John Yung, CFA AC

CITI'S TAKE +852-2501-2790

We hosted the China healthcare tour last week, involving multiple subsector john.yung@citi.com

leaders and industry experts. Fundamentals continue to improve, with Zoe Bianinnovative drug pipeline advancing fast, strong BD trend and CDMO orders

sustaining and accelerating globalization supported by emerging forefront +852-2501-2752

technologies (e.g. Brain-Computer Interface, AI-driven Drug Design, and zoe.bian@citi.com

remote surgery). Besides, valuations are at or near multi-year trough levels. Eva Zhao, CFA

The risk/reward is asymmetric to the upside, as improving fundamentals +852-2501-2701and resilient order books are not reflected in current valuations in our view.

Geopolitical concerns and domestic policy fears appear fully priced in, while eva.zhao@citi.com

a wave of share repurchases signal strong insider confidence. Potential

catalysts include favorable policy shifts, such as potentially more

supportive pricing mechanism, and continuous overseas expansion

progress of sector leaders. We see limited downside from current levels and

see long term investors are likely to build positions in near term.

Compelling Valuation Marks Good Entry Point — China healthcare valuations are

at or near multi-year troughs across eight sub-sectors - see below our analysis of

China healthcare subsectors PE bands, market cap vs. cash on hand in biotechs. We

believe recent valuation compression was overdone.

CXO Confidence and Operational Momentum — We see high management