Lyon: China's biotech fundamentals are still stable, and Baiji Shenzhou (06160), Cinda Biotech (01801), and Weilizhibo (09887) are preferred

The Zhitong Finance App learned that Lyon released a research report saying that the fundamentals of China's biotechnology industry are still stable, benefiting from strong mid-term results, continued momentum from authorized foreign transactions, and encouraging clinical data; however, sector sentiment has not fully reflected fundamental progress. The bank believes that the relevant gap is mainly due to liquidity factors, not weakening fundamentals. The bank maintains BeiGene Shenzhou (06160), Cinda Biotech (01801), and Weilizhibo-B (09887) as the first choice for biotechnology in China.

The bank pointed out that during the first half of 2026, the mid-term results of most Chinese biopharmaceutical companies covered beat market expectations, especially BeiGene and Cinda Biotech. Increased sales of innovative drugs and operating leverage were the main drivers for profit victory over expectations.

In terms of external licensing, there were 96 foreign licensing transactions for innovative drugs in the first half of the year. The total amount of transactions disclosed was 99.7 billion US dollars, equivalent to 61% and 73% of the full year of 2025, respectively; Chinese origin transactions accounted for 59% of global innovative drug transactions, and 8 of the top 10 innovative drug transactions in the world originated in China.

Clinically, there are positive data on the early to late stage assets of Chinese companies. Among them, Kangfang Biotech (09926)'s evosimab and Clenbuta-B (06990)'s sAC-TMT both beat investors' expectations.

In terms of individual stocks, BeiGene's second-quarter revenue increased 29.6% year over year to US$1.7 billion, and net profit increased 151.3% year over year to US$237 million, winning market expectations; management once again raised the 2026 revenue guidance to 6.6 billion to 6.8 billion US dollars, and GAAP operating profit guidance was raised to 1 billion to 1.1 billion US dollars. The bank maintained a target price of HK$321.7 for BeiGene H shares and a “outperforming the market” rating.

Cinda Biotech's revenue for the first half of the year increased 44.8% year on year to RMB 8.618 billion, in line with market expectations. Net profit increased 50.2% year over year to RMB 1,253 billion, beating market expectations. Product sales increased 56.7% year over year to RMB 8.2 billion; management proposed a mid-term target of 35 billion to 40 billion yuan in total revenue for 2030. The bank maintained a target price of HK$146.1 and a “outperforming the market” rating.

Weilizhibo is still in the no-revenue stage. The bank is optimistic about its differentiated technology platform and points out that the PD-L1/4-1BB bispecific antibody LBL-024 data for first-line non-small cell lung cancer was updated as a short-term catalyst, maintaining a target price of HK$116.9 and a “outperforming the market” rating.