Recently, the long-silent healthcare sector has seen a resurgence.
Choice data shows that from May 25, 2026, to July 24, 2026, the CSI Healthcare Index, the CS Innovative Drug Index, and the Stock Connect Innovative Drug Index rose by 11.52%, 6.81%, and 15.57%, respectively. This burst of momentum has shattered the sluggish and volatile pattern dominated by the technology sector in the first half of the year.
Amid this, voices in the market are suggesting that "no matter how the market moves, portfolios should always include a healthcare allocation." Has the healthcare sector, once dismissed as part of the "old guard," finally made a comeback?
What makes this recent strong rebound in healthcare different? Is it worth watching now? How can ordinary investors seize the opportunity?
The logic behind the recent strong rebound in healthcare—can it be followed?
The healthcare sector has been on a long "cold bench," but now change seems to have come overnight. Many investors are likely wondering: Should I trust it this time? Can I really follow it?
Regarding the recent sustained recovery in the healthcare market, with innovative drugs and industry chains rising alternately, Huafu Securities believes this round of the market is a triple resonance of capital, policy, and fundamentals, firmly bullish on its sustainability!
While we cannot predict the future, from multiple perspectives, the positive factors for the healthcare sector are indeed materializing. Simply put, it may have entered a "four-stage phase."
Industry Side: Innovation Pipeline
In terms of R&D pipelines, the quality and efficiency of domestic innovative drug R&D have significantly improved. According to the Ministry of Industry and Information Technology statistics, in the first half of 2026, China approved 38 new innovative drugs for market, of which 31 were domestic, accounting for over 80%. Meanwhile, high-quality results from China's innovative drugs continue to emerge, with a batch of "world firsts" receiving approval, including the world's first anti-hepatitis D antibody drug, the world's first solid tumor CAR-T therapy, the world's first rabies bispecific antibody, and the world's first invasive brain-computer interface medical device. (Sources: The Paper, MIIT)
Performance Side: Orders
In recent years, Chinese innovative drugs have been heavily acquired by global pharmaceutical companies, a trend that reached new heights in 2026. Data from PharmaCube shows that the total transaction value of Chinese innovative drug BD outbound deals in the first half of 2026 was $99.7 billion, about twice that of 2024 and 73% of 2025. The industry generally expects full-year 2026 BD transaction value to hit new records.
Policy Side: Support
Policies related to healthcare in China have been progressively strengthened. The 2026 Government Work Report for the first time designated biomedicine as an "emerging pillar industry," marking a historic leap in industrial positioning. For innovative drugs, comprehensive support policies have been continuously optimized, covering R&D support, review and approval processes, pricing mechanisms, commercial insurance plus medical insurance settlement mechanisms, and market protection periods. (Sources: Chinese Government Network, NMPA Official Website, NHSA Official Website, China Merchants Securities)
Market Side: Capital
In the market, the healthcare sector has recently seen a "buyback wave," with multiple listed pharmaceutical companies initiating share repurchase plans for the first time. In my view, this dense and large-scale buyback is not merely a tool for market value management but rather industrial capital voting for "trust" with real money.
Driven by multiple favorable factors, the investment value of the healthcare industry may gradually become apparent. If the healthcare sector was navigating through fog in the past few years, it is now slowly forging a new narrative path and lighting up multiple streetlights to withstand market scrutiny. We may not be able to bet on the height of a short-term rebound, but we can believe that the return of value will only be delayed, not absent.
How to seize future investment opportunities in the healthcare sector?
With the rebound of the healthcare sector, market attention has refocused. According to Wind statistics, over the past two months (May 25, 2026 – July 24, 2026), Ge Lan, who deeply focuses on the healthcare track, leveraged solid investment research capabilities and precise grasp of the industrial cycle. Her managed fund, 中欧医疗健康A (Lion Medical Health A), saw a unit net value increase of 17.29% during the statistical period, ranking first among similar healthcare-themed funds. Following closely, 汇添富医疗服务A (China Universal Healthcare Services A), 摩根中国生物医药A (JPMorgan China Biomedicine A), and 摩根医疗健康A (JPMorgan Medical Health A) also showed strong performance, with gains exceeding 15%. Another fund managed by Ge Lan, 中欧医疗创新A (Lion Medical Innovation A), rose by 14.01%, ranking 12th among all healthcare-themed funds.
The healthcare sector's sub-tracks are diverse and ever-changing. For investors hoping to seize opportunities in the healthcare track, choosing a theme fund with strong active management capabilities could be a good entry point.
It is worth noting that the price of experimental monkeys has recently soared. As a critical resource for innovative preclinical trials, monkeys are an "essential resource." The surge in the "value" of these monkeys not only reflects supply-demand imbalances but also sends an important signal: pipelines are advancing, projects are landing, and money is flowing. Monkeys do not lie; they tell you earlier than research reports that the prosperity of innovative drugs is brewing.
According to the 2026 mid-year report, the top ten heavy holdings of 中欧医疗健康A (Lion Medical Health A) are all innovative drug concept stocks. Among them, 药明康德 (WuXi AppTec), 凯莱英 (Asymchem), 康龙化成 (Pharmaron), and 泰格医药 (Tigermed) are recognized CXO leaders or key participants in the market. (Image source: Tiantian Fund)
Looking ahead, Ge Lan stated in the second-quarter report that innovation remains the core growth driver of the industry, while the domestic demand sector is still in an adjustment phase. She believes that innovative drugs and their industrial chains remain the main direction for allocation. The recovery trend in the innovative industry chain is clear, and the sector is poised for a dual repair resonance of performance and valuation.
The CXO sector's fundamentals have formed a positive transmission chain of order recovery, performance realization, and valuation improvement. The upstream life science sector is also benefiting simultaneously, with downstream demand recovery driving growth in orders for high-end consumables and reagents. Domestic substitution is accelerating in high-end areas, and leading companies may achieve high performance growth by leveraging their technological and service advantages.
Ge Lan indicated that in the third quarter, healthcare industry investment will revolve around the core theme of "innovative drugs and their industrial chains," while balancing the long-term industrial trend of "domestic substitution" and the recovery expectations of "consumer healthcare."
Overall, China's innovative drugs have entered a new stage of full-scale development and global competition. High-quality companies across the industry chain will experience dual enhancements in performance and valuation. They will continue to actively seize investment opportunities brought by the resonance of sector valuation and fundamental improvements.
The market is like a pendulum, never staying at one extreme forever. The healthcare "winter" has endured for so long, and spring may be on the horizon. Interested investors can keep an eye on it.
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