Following recent market overheating, a phase of consolidation has emerged, primarily driven by expectations of overseas liquidity tightening and pressure from cyclical sector adjustments. Looking ahead, how will market trends evolve? Which investment opportunities in the healthcare sector deserve close attention? Here are the latest insights from the portfolio managers of Great Wall Fund's healthcare investment team.
Tan Xiaobing: Short-term market volatility is possible. February offers a rare earnings vacuum period, and the Asia-Pacific situation remains relatively stable. However, with an extended Lunar New Year holiday this year, some investors may take profits early. Overall, we believe the market may experience fluctuations, with stock selection being the key focus.
Long Yufei: Continued optimism for new medical technologies. Looking forward, we remain optimistic about the empowerment and implementation of the current wave of technological innovation in healthcare and consumer sectors. The acceleration of global technology, represented by AI, coupled with the catch-up efforts of domestic industries, presents investment opportunities in China's capital markets. Over the past year, we have focused on areas where technological innovation intersects with healthcare. Driven by policy support and industry trends, we continue to favor emerging medical technologies such as AI healthcare, brain-computer interfaces, surgical robots, AI-driven drug innovation, innovative medical devices, and cell, gene, and nucleic acid therapies. Concurrently, as AI applications gradually advance, we are also monitoring opportunities for AI in the broader consumer sector.
Liang Furui: Seeking a new rationale for innovative drugs. For innovative drugs, the BD transaction model that previously led the sector is losing effectiveness. Against a backdrop of crowded capital positions, innovative drug stocks have weakened successively. At this juncture, a new consensus in the capital markets is needed to guide the next uptrend. Personally, three potential directions may emerge: first, a return to core value, where the globalization of domestic innovative drugs requires minimal excessive speculation; second, earnings breakthroughs, where some platform-based innovative drug companies with overseas expansion potential may begin to demonstrate non-linear profit growth; and third, a virtuous cycle of BD transactions. Market sentiment is cyclical, having shifted from excessive exuberance mid-last year to extreme pessimism now, reflecting instability in valuation systems. With sentiment cooling, overseas BD expectations for many companies have nearly reset to zero.
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