China Healthcare Pulse

Goldman Sachs maintains a preference for visibility in the China Healthcare sector, favoring CRO/CDMO and selective Biotech names with strong clinical catalysts and 'go-global' capabilities. While domestic hospital conditions remain weak due to policy pressures, early signs of recovery are emerging in retail pharmacy and consumer health services.

Key Takeaways

• 1.Visibility-driven alpha theme persists as healthcare dispersion widens materially beneath a muted headline index.
• 2.The 'Go-Global' strategy remains the primary structural offset to a soft domestic in-hospital environment plagued by reimbursement controls.
• 3.CRO/CDMO sectors show healthy order recovery, while MedTech and Retail Pharmacy show early signs of bottoming out.

Table of Contents

• Key takeaways by sub-sectors
• Our key investment thesis and preferred stocks by sector
• Guidance summary
• Performance, valuation, earnings and flows
• Performance: Offshore HC outperformed versus index YTD, led by CDMO/CRO
• CDMO: healthy new order/ backlog growth in 1Q26
• CDMO: Overseas funding momentum holds; relatively muted for domestic funding
• Biotech license-in/-out continued to drive share price
• China GLP-1: Oral readout / BD visibility / China commercialization as top focus
• Biotech & Pharma Catalysts
• Biotech cash runway — break-even as key thing to watch
• Pharma saw growing contribution from innovative drugs; distributors continued to face GM pressure
• MedTech: Hospital equipment bidding: Weakness continues
• Medtech: VBP tracker
• Service: Reimbursement pressure persists; going-global remains the key growth driver
• Valuation: Onshore/offshore HC trading multiples remain stable
• Upward revision for CRO/CDMO in 3M; Slightly picked up for A/H premium in Apr
• Trading activities: Onshore trading value trending high with increased interest in CRO/CDMO; offshore stable with trading towards Biotech
• Sector valuation (P/E)
• Sector valuation (P/S)
• China Healthcare comp sheets by sub-sector
• Methodologies
• Glossary
• Disclosure Appendix

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