In response to whether there is a valuation bubble in the Hong Kong-listed stocks within the innovative pharma sector, BOCOMI wrote in its report that the current rally is fundamentally driven by a value re-rating, and valuations remain attractive.

The broker based its opinion on reasons including the fact that the leading innovative pharma companies' forward 12-month P/S ratios are roughly in line with historical averages since the bear market, slightly above comparable US stocks, but with much higher revenue growth expectations.

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Regarding China's soon-to-be-launched commercial insurance innovative drug list, BOCOMI said that this is the first innovative drug list formulated with commercial insurance participants. With an aim to include products beyond the scope of basic medical insurance, this list is expected to create a more flexible pricing environment than medical insurance negotiations.

Looking forward to the future growth potential for commercial health insurance, the broker expects premiums and innovative drug payments to experience an over ten-fold increase in the long run.

In terms of stock selection, BOCOMI preferred those with solid mid- to long-term fundamentals, abundant short-term catalysts, and immense upside potential in valuation.

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Within the biotech and innovative prescription drug sectors, the broker recommended AKESO (09926.HK)  +13.100 (+10.397%)    Short selling $161.99M; Ratio 10.444%   , SIMCERE PHARMA (02096.HK)  +1.000 (+9.174%)    Short selling $15.38M; Ratio 6.432%   , HUTCHMED (00013.HK)  +0.500 (+1.859%)    Short selling $17.67M; Ratio 8.147%   , and ANTENGENE-B (06996.HK)  +0.620 (+19.255%)   .
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-07-17 12:25.)