According to a research report released by China Securities Co., Ltd. (601066), the brain-computer interface has been elevated to a strategic direction for the 15th Five-Year Plan. With strong support from multiple policies, the pace of industrial implementation is expected to accelerate, and investors are advised to pay attention to investment opportunities in this sector.
The brain-computer interface carries dual attributes of healthcare and technology. In the short term, its core applications focus on disease treatment. In the long term, if human function enhancement is achieved and deeply integrated with AI and robotics technologies, it is expected to open up a trillion-dollar market space.
China Securities Co., Ltd. pointed out that there is no absolute superiority or inferiority between non-invasive and invasive brain-computer interface technology routes. The key lies in identifying "true brain-computer" technologies that align with national policy support and have genuine downstream demand.
China's brain-computer interface technology research is in a relatively leading tier globally, and the country is expected to cultivate world-leading brain-computer interface enterprises. This could drive valuation improvements for related listed companies in the secondary market while also boosting primary market financing activity, with capital and industrial development expected to form positive resonance.
On the industry fundamentals front, the pharmaceutical sector as a whole is witnessing an improvement trend, with innovation-related segments performing more prominently. In 2025, the overall revenue of the pharmaceutical industry across all segments declined by 0.56% year-on-year, with the decline continuing to narrow compared to the first three quarters of 2025. In the first quarter of 2026, total sector revenue grew by 2.16% year-on-year, officially entering a recovery channel on the revenue side.
On the profit side, improvement is also evident. In 2025, the sector's non-recurring net profit attributable to parent companies declined by 18.91% year-on-year, while in the first quarter of 2026, it grew by 2.69% year-on-year, turning positive.
Among sub-sectors, in the first quarter of 2026, biopharmaceutical upstream, CRO/CMO, medical services, chemical formulations, home medical devices, and high-value consumables all achieved dual growth in both revenue and non-recurring net profit attributable to parent companies, with the CRO/CMO segment showing the most significant growth.
From a global perspective, China's pharmaceutical industry advantages of "innovation upgrading plus supply chain resilience" are becoming increasingly prominent. The United States dominates global early-stage pharmaceutical R&D and high-end pricing, but under the patent cliff faced by multinational pharmaceutical companies, demand remains strong. The global cost-effectiveness of Chinese assets continues to stand out, offering broad room for domestic and international collaboration.
In 2025, the upfront payments for overseas licensing of domestic innovative drugs significantly surpassed the full-year total of 2024, and medical device companies are also actively exploring pathways for going abroad.
On the domestic industrial front, the focus is on high-quality development, building a foundation for innovation and compliance across multiple dimensions. On the policy side, procurement rules are being continuously optimized, diversified payment mechanisms and medical service pricing reforms are being advanced. On the pharmaceutical chain side, innovative drugs are entering a commercialization ramp-up period, and attention to supply chain security is increasing. On the device side, domestic substitution is extending toward the mid-to-high end, with AI healthcare, brain-computer interfaces, and other new technologies being implemented, alongside industry M&A integration and overseas expansion jointly driving upgrades. Traditional Chinese medicine, pharmacies, medical services, and other segments are also welcoming opportunities for bottoming out, recovery, and transformation.
On the going-global front, China's pharmaceutical industry is making multi-dimensional breakthroughs and building a new globalized landscape. BD cooperation for innovative drugs has become normalized, entering the era of internationalization 2.0. Demand across the entire industrial chain is recovering simultaneously both domestically and overseas. Active pharmaceutical ingredients are resolving short-term disruptions and accelerating the transition toward specialty APIs/CDMOs. In the device sector, independent sales and BD are being pursued in parallel to explore overseas markets. In the blood products and vaccine fields, overseas registration of intravenous immunoglobulin is being continuously advanced, and vaccine going-global models are becoming increasingly diversified.
Looking ahead to 2026, the value reshaping trend in the pharmaceutical industry is clear, and coupled with catalysis from cutting-edge technologies such as brain-computer interfaces, China Securities Co., Ltd. recommends positioning around four main themes.
First, the innovation theme. The global liquidity environment is expected to continue improving, providing support for the pricing of innovative assets. Combined with national policies encouraging industry innovation, the pace of cutting-edge technology industrialization is accelerating. Focus should be placed on innovative drug and pharmaceutical companies (in directions such as ADC, second-generation IO, small nucleic acids, weight loss, and TCE), as well as cutting-edge technology targets in the medical device field such as AI healthcare and brain-computer interfaces.
Second, the going-global theme. The global competitiveness of China's pharmaceutical industry is steadily improving, and in the long term, enterprises with global influence are expected to emerge. It is recommended to pay attention to targets in the innovative drug and medical device tracks that have outstanding product strength and internationalization capabilities of their teams. It should be noted that going global is a long and winding process, and challenges and pace should be viewed with rational expectations.
Third, the marginal change theme. On one hand, attention should be paid to investment opportunities in pharmaceutical distribution and medical equipment renewal brought about by policy improvements. On the other hand, attention should be paid to the CXO industry where supply-demand relationships are improving, as a recovery in global investment and financing is expected to drive the gradual recovery of downstream customer demand.
Fourth, the integration theme. It is recommended to focus on integration and restructuring opportunities in the medical device and traditional Chinese medicine sub-sectors, as well as in certain pharmaceutical companies and state-owned pharmaceutical enterprises.
Risk warnings: Risks of R&D progress falling short of expectations; invasive technologies face issues such as surgical risks, biocompatibility, and long-term stability, while non-invasive technologies are limited by skull signal attenuation, low signal-to-noise ratios, and insufficient spatial resolution. Data privacy and security risks: brain-computer interface systems involve large amounts of EEG data and personal sensitive information, posing risks of hacker attacks and data leaks. Ethical risks: direct intervention in the brain may trigger controversies related to consciousness control and identity. Commercialization progress falling short of expectations: the transformation of technology from laboratory to large-scale commercial application is difficult, requiring high capital and time investment, and the pace of implementation may fall short of expectations.
Comments