The three ministries issue guidelines to standardize grassroots traditional Chinese medicine services; the biopharmaceutical sector strengthens in the afternoon.

(Source: Financial News)

          In the long term, the trend of innovation and development in China's pharmaceutical industry remains unchanged, and there are expected to be long-term layout opportunities after market clearing.            

On the afternoon of March 24, the biopharmaceutical sector surged again, with Lingkang Pharmaceutical (603669.SH) hitting the daily limit, Dizhe Pharmaceutical-U (688192.SH) rising over 8%, and Gongtong Pharmaceutical (300966.SZ), Yuandong Biology (688513.SH), and Chengyi Pharmaceutical (603811.SH) following suit.

On the news front, on the same day, the National Administration of Traditional Chinese Medicine, the National Health Commission, and the National Center for Disease Control and Prevention issued a notice on “Further Regulating the Management of Traditional Chinese Medicine Services in Grassroots Medical and Health Institutions,” requiring local traditional Chinese medicine authorities to work with health and disease control authorities to strengthen the supervision and management of traditional Chinese medicine services in grassroots medical and health institutions. The National Administration of Traditional Chinese Medicine, the National Health Commission, and the National Center for Disease Control and Prevention require local traditional Chinese medicine authorities to work with health and disease control authorities to strengthen the supervision and management of traditional Chinese medicine services in grassroots medical and health institutions, investigate and handle illegal and irregular activities according to law, and respond promptly to complaints and reports related to traditional Chinese medicine services.

In addition, on March 24, according to news from the National Medical Products Administration’s official website, the National Medical Products Administration approved a pilot program for the optimization of the review and approval process for supplementary drug applications by the pharmaceutical administrations of Fujian and Henan provinces.

WuXi AppTec (603259.SH) recently released its 2025 annual report, showing that the company achieved operating revenue of 45.456 billion yuan in 2025, a year-on-year increase of 15.8%; net profit attributable to the parent company was 19.151 billion yuan, a year-on-year increase of 102.65%. The significant growth in the performance of leading companies has boosted market confidence in the entire innovative drug industry chain.

Aijian Securities stated that the recent escalation of the situation in the Middle East and limited energy supply have brought uncertainty to global economic development. We believe that the short-term market trend is mainly influenced by international situations and trading chips, with a focus on investment opportunities brought by price increases in gloves, vitamins, and other products. In the long term, the trend of innovation and development in China’s pharmaceutical industry remains unchanged, and there are expected to be long-term layout opportunities after market clearing. By 2026, we remain optimistic about the trend of Chinese innovative drugs going abroad and will continue to closely track investment opportunities in core advantageous tracks such as ADCs, bispecific antibodies, small nucleic acids, and weight-loss drugs.

Kaiyuan Securities pointed out that overall, we continue to be optimistic about innovative drugs and their industry chains (CXO + research services) and national strategic emerging industries such as AI, brain-computer interfaces, and biomanufacturing. With the first quarter of 2026 approaching, the innovative industry chain is expected to continue the overall upward trend in performance, and the signing of preclinical CRO contracts is expected to accelerate growth, currently recommended for focus.

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