Nomura Europe/Japan Roadshow: China CRDMO and Biotech Competitiveness Endorsed by Institutional Investors
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Nomura completed a two-week roadshow across Europe and Japan, where roughly 40 institutional investors endorsed China's CRDMO and biotech export capabilities, calling healthcare one of the few fundamentally solid sectors in Chinese equities.
Why are overseas institutions bullish on China healthcare now?
Two revenue streams anchor the thesis: CRDMO — contract research, development, and manufacturing — earning fees from global pharma, and out-licensing deals where Chinese companies sell rights to homegrown drug assets abroad.
This means → institutions are not betting on domestic insurance reimbursement growth; they are betting that Chinese firms can earn money globally.
Since June, rotation away from the AI trade has pushed capital into defensive sectors, giving healthcare an additional lift from allocation-driven inflows.
AI drug discovery — investors are excited, so why is Nomura cautious?
Investor enthusiasm for AI drug discovery (AIDD) is high, but Nomura is measured: AI is currently applied mainly at the pre-clinical stage, which accounts for a small share of total drug-development time and cost.
In plain terms = AI is helping with the "find a direction" step; it is still far from making drugs cheaper or faster to develop.
An open question remains: whether AI can identify truly novel targets — drug-action sites humans have never found before — is still unproven.
How strong is the CRDMO and out-licensing momentum?
Global demand for peptide manufacturing (the production process behind GLP-1 weight-loss drugs and similar) is robust; Nomura sees Chinese companies positioned to capture this capacity gap.
Out-licensing deals peaked in 2025 and have already set new highs in early 2026; overseas investors' doubts about Chinese drug-asset quality have faded as positive clinical readouts and larger deal sizes accumulate.
This means → as long as China's research and clinical resources stay strong, the overseas revenue line is not a one-off — it is sustainable, structural growth.
WuXi AppTec nearly doubled — is there still room to buy?
Nomura maintains a Buy rating on WuXi AppTec (2359.HK / 603259.SH), arguing that the rally is driven by earnings growth, not multiple expansion.
The forward P/E has stayed roughly flat at 20×; consensus expects ~20% year-on-year earnings growth for 2027.
In plain terms = the stock has risen a lot, but "expensive or not" depends on whether earnings can keep up — and Nomura believes the growth rate still supports the price.
Innovent Biologics — less known overseas, so why does Nomura pick it?
Nomura maintains a Buy rating on Innovent Biologics (1801.HK), with a long-term thesis: three major out-licensing deals with multinational pharma over the past 12 months validate its commercialisation capability and R&D efficiency.
The near-term risk is a biosimilar volume-based procurement round expected in Q4 2026, which could pressure revenue.
This reflects a trade-off: short-term procurement headwinds versus multi-year overseas potential — Innovent remains one of the Chinese biotech names with the most complete global expansion story.
Hengrui and Mindray — what else did investors ask?
Investors asked about the causes of Hengrui Medicine's (600276.SH / 1276.HK) weak second-quarter results.
On when growth will recover for med-tech companies such as Mindray Medical (300760.SZ), Nomura said it sees no clear signs yet.
This means → in Nomura's framework, a med-tech recovery still lacks catalysts; investors should focus on the two higher-conviction themes — CRDMO and innovative-drug globalisation.
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