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<Research> M Stanley: Risk-Reward of China Biotech Stocks to Improve in 2H2026
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M Stanley issued a report stating that valuations of China biotech stocks have retraced to mid-2025 levels, while fiscal 2026 growth, funding resilience, licensing momentum and registration catalysts have improved the risk/reward profile for 2H2026. The report noted that China biotech companies delivered solid results in fiscal 2025, and fiscal 2026 guidance continues to indicate strong growth in innovative drug revenue. Policies remain supportive of differentiated innovation, and overseas licensing momentum stays robust. Fundamentals have also become more resilient, with licensing income increasingly serving as an important funding source, extended cash runways and broader profitability expansion. Although the sector remains sensitive to interest rates, downside risks have gradually been cushioned by growth, longer cash runways and non-dilutive financing. More intensive global registration catalysts are expected in 2H2026. The broker recommends selective allocation to two types of names: first, companies that underperformed in 1H2026 but have upside catalysts in 2H2026, such as Ying'en Bio-B (9606.HK) and ABBISKO-B (02256.HK); second, companies with strong globalisation track records and repeat licensing capabilities, such as AKESO (09926.HK), INNOVENT BIO (01801.HK) and KEYMED BIO-B (02162.HK). These companies are better positioned to convert global recognition into retainable risk-adjusted net present value, rather than merely headline licensing amounts. For target prices, please refer to a separate table. (ha/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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