HK Stock Market Move | Medical stocks have mostly strengthened. The impact of Trump's drug tariffs is limited. Institutions say that the BD event in the fourth quarter is worth looking forward to.

Most pharmaceutical stocks are on the rise. As of the time of writing, IMMUNEONCO-B (01541) rose by 18.98% to 13.48 Hong Kong dollars; QYUNS-B (02509) rose by 12.11% to 32.96 Hong Kong dollars; XTALPI (02228) rose by 8.55% to 13.2 Hong Kong dollars; JACOBIO-B (01167) rose by 7.58% to 9.94 Hong Kong dollars; REMEGEN (09995) rose by 6.37% to 108.5 Hong Kong dollars. On the news front, on September 25th local time, Trump announced a 100% tariff on patented and branded drugs, with the only exemption being pharmaceutical companies that already have pharmaceutical factories under construction in the US. BOCOM INTL believes that this will have limited impact on the Chinese innovative drug industry, and there is no need for excessive concern. In terms of innovative drugs, current varieties that are going abroad are mostly either building production capacity in the US or have outsourced production to American CMOs, while most Chinese innovative drugs going abroad adopt a BD model. In terms of CXO, the export products are mainly active pharmaceutical ingredients/herbal extracts, which are currently not affected. The proportion of exported formulations/finished drugs is low. Downstream MNC clients' investments in building factories will take time, and the direct impact on CXO orders in the short term is limited. In the long term, policy changes may also affect the pace of building factories. Sinolink stated that the recent fluctuation in the innovative drug sector is mainly due to the lack of authoritative academic conferences held in July and August, leading to a decrease in overall BD events. The analysis of global BD events in previous years shows that major BD transactions tend to occur at the end of the year. With a series of authoritative academic conferences such as the ESMO conference starting in October, BD events are worth looking forward to. The industry trend of improving the global competitiveness of Chinese innovative drugs, improving their own operations, and intensifying BD cooperation remains promising.