China Post Securities: Triple Index Verifies Recovery of Clinical CRO Prosperity Under Multi-Factor Resonance, Head Clinical CRO will usher in an upward cycle
The Zhitong Finance App learned that China Post Securities released a research report saying that clinical CRO is the middle and back end of innovative drug development, and is relatively lagging behind due to the innovative drug investment and financing boom. When investment and financing resumed, the first benefit in the CXO industry chain was pre-clinical CRO (chemistry, efficacy, safety evaluation, etc.), while clinical CRO was 6-12 months behind pre-clinical CRO. Although clinical CRO is lagging behind in transmission, its popularity is expected to be higher than that of pre-clinical CRO, and it has investment value.
The main views of China Post Securities are as follows:
Leading economic indicators
The recovery in the biotechnology financing environment and the sharp increase in external licensing transactions have directly relieved the cash flow pressure of innovative pharmaceutical companies. It is expected to be transformed into an R&D budget that can be implemented within the next 6-12 months, which will drive the growth of CRO orders. The biotechnology financing environment has picked up, and external licensing transactions have taken the lead in recovering in 2025. Judging from the pace of transmission, it has already begun to have a positive impact on clinical CRO. The number of IND admissions reached a record high, and the most sensitive indicator of prosperity was strong.
Simultaneous Boom Index
New clinical trials continue to grow rapidly, orders from leading companies are growing rapidly, and personnel are expanding, and the inflection point of the economy is gradually becoming clear. Orders from many companies in the 2026H1 industry have picked up: new orders for Kanglong Clinical 26H1 clinical research services increased by more than 30% year-on-year, Tiger 2026H1 net new orders grew faster than in the same period in 2025, and the average unit price of new orders returned to the upward trend. Considering the pace of order signing, we judge that 2026H2 clinical CRO industry orders are expected to pick up at an accelerated pace and further improve.
Index of lagging economic conditions
High-priced orders show that the reporting side often takes 1-3 years. Currently, the lagging clinical CRO index is still under pressure, but a subsequent recovery can be expected. There was a partial improvement in 2026H1 revenue (Tiger +14.1%, Northgate +23.3%), but profits were hampered by the delivery of low price orders in the early period, and reporting side improvements are expected to begin in 2027.
Conclusions
In the short term: The demand side and supply side of the clinical CRO industry are improving simultaneously, and the inflection point of the boom is gradually becoming clear. Looking at the medium to long term: The complexity of drug therapy, the expansion of MRCT demand, and the ability of AI to reduce costs and increase efficiency are expected to drive a sharp rise in the volume and price of clinical CRO in the head. Recommended focus: Leading clinical CROs that benefit from both demand recovery and pattern optimization: Tiger Pharmaceuticals, Prius, Norske Pharmaceuticals, etc.
Risk warning:
There are risks such as downstream demand sustainability falling short of expectations, increased industry competition, and policy changes.