On April 22, Zhong Ou Fund disclosed the first-quarter report for 2026 of the Zhong Ou Healthcare Hybrid Securities Investment Fund, jointly managed by Ge Lan and Zhao Lei. Regarding the portfolio, the fund's top ten holdings in order are: Wuxi Apptec Co., Ltd. (603259.SH), Jiangsu Hengrui Pharmaceuticals Co., Ltd. (600276.SH), Pharmaron Beijing Co., Ltd. (300759.SZ), Asymchem Laboratories Tianjin Co., Ltd. (002821.SZ), Haisco Pharmaceutical Group Co., Ltd. (002653.SZ), Baitaiheng (688506.SH), Kelun Pharmaceutical Co., Ltd. (002422.SZ), Shenzhen Salubris Pharmaceuticals Co., Ltd. (002294.SZ), Tigermed Consulting Co., Ltd. (300347.SZ), and Allist Pharmaceuticals Co., Ltd. (688578.SH).
Ge Lan stated that in the first quarter, adhering to a long-term value investment philosophy, the fund continued to focus on innovative drugs and medical devices and their industrial chains, as well as consumer healthcare, among other areas. Innovative drugs and their related chains remain the core focus. In terms of portfolio adjustments compared to the fourth quarter of 2025, the fund reduced positions in stocks such as Pharmaron Beijing and Tigermed Consulting during the first quarter, while increasing holdings in Asymchem Laboratories, Shenzhen Salubris Pharmaceuticals, Haisco Pharmaceutical Group, and Kelun Pharmaceutical. Allist Pharmaceuticals entered the top ten holdings for the first time.
In terms of performance, the net asset value growth rate for the fund's Class A shares during the period was -0.22%, while the benchmark return was -0.69%. The net asset value growth rate for Class C shares was -0.41%, compared to the benchmark return of -0.69%.
Ge Lan mentioned in the report that the innovative drug industry continued its strong industrial trend in the first quarter, with total out-licensing transaction value exceeding $60 billion for the quarter, a record high, achieving results in product cooperation and R&D platform collaboration. The CXO sector emerged from the cyclical trough of the past two years, with a good growth trend in order backlogs continuing into 2025. In the medical device sector, the international expansion of high-end medical devices deepened from "trade-based expansion" to "system-based expansion," with leading export growth rates seen in high-end categories such as artificial joints, endoscopes, and MRI equipment. The consumer healthcare and services sector is in a dual recovery phase for both performance and valuation. The retail pharmacy industry remained generally stable, with competition focusing on professional service capabilities, prescription承接 capacity, and supply chain efficiency. The medical services sector, after a prolonged adjustment period, currently has low valuation percentiles, and industry sentiment is expected to gradually recover, with AI-related businesses beginning to provide new growth drivers for enterprises.
The report indicated that looking ahead to the second quarter, the fund remains most optimistic about the innovation industrial chain, while also paying attention to opportunities in medical device internationalization and domestic substitution, as well as the recovery in consumer healthcare. The innovative drug sector and its chain are expected to maintain high activity levels and will be a key focus area in the second quarter. Major academic conferences such as AACR and ASCO in the second quarter may serve as important catalysts for the innovative drug sector, with significant data readouts expected in areas like bispecific/multispecific antibodies and ADCs, while data validation for emerging technology platforms such as molecular glues, small nucleic acids, and in vivo CAR-T will continue to advance. The upward trend in the CXO sector is expected to continue into the second quarter, with preclinical CROs likely to see rapid order growth driven by recovering demand and rising project prices. CDMO companies show strong growth certainty bolstered by external demand; the clinical CRO industry is experiencing increasing concentration, with leading companies poised to benefit.
In terms of allocation, the fund will follow two main lines: "leading technology platforms" and "resonance of favorable conditions across the industrial chain." It will focus on companies capable of consistently generating innovative pipelines and leading CXO sub-sector players with high order growth rates and strong earnings visibility. In the medical equipment field, the logic for domestic substitution of high-end equipment is certain in the long term, but the pace of short-term earnings realization needs to be tracked through tender data. The recovery trend in the consumer healthcare sector is expected to continue into the second quarter, with its strength depending on the degree of improvement in the consumer environment and the effectiveness of policy implementation. The application of AI in healthcare scenarios is at a critical juncture, transitioning from proof-of-concept to commercial implementation. Companies that can translate AI capabilities into chargeable services or products and demonstrate tangible cost reduction or efficiency improvements may become sources of alpha within the sector.
Overall, Ge Lan believes the pharmaceutical industry is undergoing a continuous transformation from "price competition" to "quality + innovation." Companies with core product competitiveness and efficient operational management capabilities stand out during this adjustment cycle. The fund maintains its long-term value investment framework, continuing to focus on core areas such as the innovative drug and device industrial chain and consumer healthcare. It conducts dynamic assessments strictly based on corporate earnings cycles, valuation attractiveness, and operational trends, striving to achieve long-term, stable returns for investors.
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