China Biotechnology: 2H26 Outlook: Defensive Growth Despite Rate-Sensitive Tape

研报英文原文证据摘录

China Biotechnology: 2H26 Outlook: Defensive Growth Despite Rate-Sensitive Tape

IdeaM

Executive Summary

China biotech enters 2H26 with structural progress intact and a more constructive

tactical setup: The key trackers from Innovation Dawn remain broadly on course. China-

originated licensing momentum has stayed robust, FY25 earnings delivery was solid, FY26

guidance continues to imply healthy topline growth for true innovators, and policy

support for differentiated innovation is becoming more tangible. At the same time, the

sector’s funding profile has improved: licensing income is now a larger source of non-

dilutive capital, cash runway has extended, and profitability is broadening. We still see

China biotech as a rate-sensitive risk sector, not a rate-decoupled defensive sector, but the

underlying companies are less funding-fragile than in prior cycles. This is the basis for our

2H26 constructive view.

Why allocate now? The first Innovation Dawn re-rating was about proving that China can

supply global innovation. The next phase is about proving that China originators can retain

more of the value they create. That transition is becoming investable now because

valuation has reset toward mid-2025 levels, while three evidence streams are improving:

risk-bearing capacity is rising through longer runway and broader profitability; global

translatability will be tested through pivotal multi-regional clinical trial (MRCT) readouts,

biologics license application (BLA) / supplemental biologics license application (sBLA)

submissions and Prescription Drug User Fee Act (PDUFA) events; and deal structures are

evolving from pure licensing toward models that can preserve more retained risk-adjusted

net present value (rNPV). Broad beta still needs rate stability, but the 2H26 stock-