UBS Group AG: Most sales of Chinese biotechnology companies in the first half of the year exceeded expectations; in the second half, global research and development catalysts will be key, with BeOne Medicines Ltd. (ONC.US) as the top choice.

UBS Group AG released a research report stating that the performance expectations for the Chinese biotech sector in the first half of this year were relatively conservative. The main concerns included tightened regulation of domestic pharmaceutical marketing activities and anti-corruption actions in public hospitals. However, Chinese biotech companies focused on innovative drugs have been only mildly affected. Among the 12 biotech companies covered by the bank, 11 have entered the commercialization stage, with 8 of them exceeding sales expectations, and no company considers regulation a major barrier to commercialization. The bank's top picks are BeOne Medicines Ltd., followed by INNOVENT BIO (01801) and Kelun-Biotech (06990). UBS Group AG pointed out that the total product sales of these 11 companies grew by 34% year-on-year in the first half of this year. BeOne Medicines Ltd. (ONC.US) led in sales with $3.2 billion, representing a 31% increase; Kelun-Biotech increased by 112.1%, INNOVENT BIO by 56.7%, and InnoCare Pharma (09969) by 43.2%, showing strong growth rates. BeOne Medicines Ltd. raised its guidance, INNOVENT BIO provided new optimistic guidance, while the other companies maintained their annual guidance, expressing confidence in meeting or exceeding targets. The report mentioned that external licensing transactions in Chinese biotech remain active, with the upfront payments and total transaction volume as of the end of August reaching 90% and 82% of the total levels for the entire year of 2025, respectively. Some companies have achieved significant profits; in addition to BeOne Medicines Ltd. and INNOVENT BIO maintaining profit growth, HUTCHMED (00013), InnoCare Pharma, and JUNSHI BIO (01877) also achieved net profits in the first half of this year. The overall cash situation in the industry has strengthened, with 91 companies reporting a total of cash and cash equivalents up 34% year-on-year, and the median cash coverage ratio improved from 2.8 times at the end of 2025 to 3.4 times. UBS Group AG expects that the academic conference season in the second half of this year will kick off in September, focusing on the WCLC/ESMO Solid Tumor Conference and the ASH Hematology Conference. Catalysts include AKESO (09926) Yvoxi's PDUFA date in the U.S. set for November 14, Kelun-Biotechs sac-TMT submission of BLA in the U.S., as well as data reads from Yvoxi's HARMONI-3 final PFS/interim OS analysis and HARMONI-2 OS updates. The bank also lowered the target price for JUNSHI BIO from HKD 32.1 to HKD 29.1 to reflect a more competitive global market landscape, while maintaining a "buy" rating.