The fourth-quarter reports for 2025 are now being released, offering potential clues to the market's future direction and investment opportunities that investors are keenly watching. Let's examine the latest insights from Liang Furui, Portfolio Manager of the Great Wall Healthcare Industry Select Fund.
In the fund's fourth-quarter report for 2025, Manager Liang Furui stated that during the period, A-shares exhibited a pattern of "rushing higher - pulling back - ending with an uptick" in a volatile upward trend, while H-shares consolidated with a noticeable underperformance compared to A-shares in December. Both markets were driven by policy, liquidity, and earnings expectations; however, Hong Kong stocks faced additional pressure from divergent overseas liquidity conditions and capital preferences, leading to a continuation of the innovative drug sector's adjustment trend from the third quarter. The duration and extent of this adjustment slightly exceeded market expectations.
Liang Furui believes that at the current juncture, many individual innovative drug stocks have become quite attractive from a valuation perspective. Building on the original stock selection framework, the strategy has been adjusted to form two allocation lines: "already BD" and "not yet BD." For stocks in the "already BD" category, the focus is on the importance of the pipeline within the multinational corporation (MNC) and the pace of global core clinical trials. The selection of "not yet BD" stocks is more heavily based on the logic of global competitiveness and scarcity of the core pipeline, with an adjusted balance between the long-term potential, certainty of drug development success, and certainty of overseas expansion for individual stocks. Concurrently, considering that the impact of centralized drug procurement on financial statements is nearing its end and the innovation transformation of generic-drug companies turning to innovative drugs is overall entering a verification phase, attention to these "generic-to-innovative" companies has been increased.
