UBS has released a research report indicating that first-half results among Chinese pharmaceutical stocks were mixed, with five of the nine rated companies exceeding market expectations. These outperformers included Hansoh Pharma (03692), Simcere Pharma (02096), SBP Group (01177), CSPC Pharmaceutical (01093), and Kelun Pharma (002422.SZ). United Lab (03933) delivered results broadly in line with forecasts, while 3SBio (01530) and Huadong Medicine (000963.SZ) fell short of expectations. All companies were assigned "Buy" ratings.

During the period, business development (BD) collaboration revenues provided positive surprises, generally exceeding UBS's projections. The median revenue and net profit growth for the sector in the first half were 4% and 3%, respectively. UBS currently forecasts that full-year growth could accelerate to 7% and 9%.

UBS has named Simcere Pharma as its top pick in the sector, noting it is the only company to have raised its 2026 guidance. The adjusted net profit growth target has been upgraded from 30% to 45%, while revenue growth remains at 30%. The bank has set a target price of HK$16.6 for the stock. Management indicated that Sanbexin, Quviviq, and the new oncology portfolio continue to drive product sales growth. A recent collaboration with Roche on a preclinical TCE asset is expected to bring an additional US$75 million in upfront payment revenue.

Based on better-than-expected gross margins in the first half, UBS has raised its target price for Hansoh Pharma from HK$48.8 to HK$50.8. For SBP Group, CSPC Pharmaceutical, United Lab, and 3SBio, target prices are set at HK$7.7, HK$11.8, HK$12.8, and HK$26.4, respectively.