BOCOM INTL: Mainland pharmaceutical sector has a large space for repair; foreign investment environment is expected to improve.

BOCOM INTL released a research report stating that the stock performance of the mainland pharmaceutical sector was impressive last week. The bank believes that this is mainly due to the sector's undervaluation rebound, favorable policies being implemented, the "AI + healthcare" theme driving sentiment recovery, and the inflow of funds. It is expected that further favorable fiscal and medical insurance/commercial insurance policies will continue to be introduced, the overall sector valuation is still at historical lows, and there is still significant room for sector restoration. The mainland pharmaceutical industry is given a "outperform" rating. The bank continues to focus on recommending potential beneficiaries of future policy space, including: 1) AKESO (09926), INNOVENT BIO (01801), Legend Biotech Corp. Sponsored ADR (LEGN.US), EVEREST MED-B (01952) and other innovative drug targets with rich short-term catalysts, high profit growth, clear profit or loss breakeven points, and significant valuation restoration elasticity; 2) SIMCERE PHARMA (02096), HANSOH PHARMA (03692), SINO BIOPHARM (01177) and other leading prescription drug companies with the potential for both performance growth and multiple valuation repairs. It is also recommended to pay attention to: 1) pharmaceutical business circulation targets with high dividend yields that are expected to benefit from overall industry fundamentals improvement; 2) the trend of AI + healthcare development, focusing on targets with clear advantages in data access and landing scenarios (such as 2C health management), including YIDU TECH (02158), XTALPI-P (02228), AIRDOC-B (02251), XUNFEIHEALTH (02506), GUSHENGTANG (02273) and others.