<div id="readability-page-1"><div>G Sachs said in a research report that since the start of 2026, Chinas healthcare sector has delivered muted performance, with offshore and onshore markets posting returns of about -3% and 0%, respectively, while dispersion among individual stocks has widened significantly. Among them, the CRO/CDMO segment has risen about 8% YTD, and biotech stocks have gained about 6%, mainly driven by improved earnings visibility and expectations for key product data. The broker believes the market is increasingly rewarding companies with strong execution, high earnings sustainability and better asset-level visibility.Entering mid-2026, the broker continues to favor CDMO companies given their supportive earnings cycle, while selectively positioning in pharmaceutical and biotech firms, focusing on upcoming clinical data releases and progress in licensing deals: WUXI APPTEC (02359.HK) +2.200 (+1.745%) Short selling $75.54M; Ratio 34.085% may raise its 2Q outlook; HENGRUI PHARMA (01276.HK) -0.300 (-0.488%) Short selling $7.60M; Ratio 15.565% could deepen cooperation with multinational pharmaceutical companies; INNOVENT BIO (01801.HK) -0.700 (-0.875%) Short selling $97.74M; Ratio 22.794% and KELUN-BIOTECH (006990.HK) are expected to play central roles at the ASCO and ADA annual meetings, with key updates likely to further enhance global pipeline visibility. Specifically at the ASCO annual meeting, new developments in next-generation first-line non-small cell lung cancer therapies such as the HARMONi-3 trial targeting PD-1/VEGF and the optiTROP-Lung05 trial for the pembrolizumab and sac-TMT combination remain crucial to overall biotech market sentiment.In contrast, the domestic hospital environment remains weak, with reimbursement control measures continuing, a new round of anti-corruption regulations implemented from May, and softer tendering activities. Against this backdrop, going global remains a key structural offset, reinforcing the brokers preference for companies with overseas growth momentum, including MEDBOT-B (02252.HK) +0.540 (+2.158%) Short selling $2.51M; Ratio 4.049% , EDGE MEDICAL-B (02675.HK) +0.150 (+0.299%) and ANGELALIGN (06699.HK) +0.650 (+0.784%) Short selling $8.52M; Ratio 27.407% . (ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-20 12:25.)</div></div>

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G Sachs reports that China's healthcare sector has seen muted performance in 2026, with CRO/CDMO segments up 8% YTD. The broker favors visibility-led CDMO companies and selective pharmaceutical investments, focusing on upcoming clinical data. Key players include WUXI APPTEC, HENGRUI PHARMA, and INNOVENT BIO, with significant updates expected at ASCO and ADA meetings. The domestic hospital environment remains weak, prompting a preference for companies with overseas growth potential.

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G Sachs: Continue to Favor Visibility-led CDMO, Closely Watch Early Signs of Market Bottoming