Large firm rating | Citibank: The policy environment is more supportive of pharmaceutical stocks, increasing the allocation weight for Stone Pharmaceutical and Jiangsu Hengrui Pharmaceuticals.

On May 13, according to Gelonghui, a report from Credit Lyonnais indicated that President Trump’s remarks on Pharmaceutical pricing have reignited market volatility. The report suggests that the multi-payer structure of the Medical system in the USA limits the government's pricing power, and any meaningful reform would impact a wide range of stakeholders, making actual implementation highly uncertain. Although concerns about peak sales of overseas products are increasing, the USA remains a growth market for Chinese companies. The policy environment in China is becoming more supportive, especially in terms of more lenient Pharmaceutical pricing. The report believes that the recovery of in-hospital Pharmaceutical sales will be a major driving force for the next domestic cycle, with April data showing positive signs of improvement. The report increased its allocation to leading Pharmaceutical companies in its investment portfolio, including CSPC PHARMA and Jiangsu Hengrui Pharmaceuticals. Additionally, due to the easing of the Sino-US trade conflict, the report increased its allocation to WUXI APPTEC.