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<Research>M Stanley Reinitiates Coverage on INNOVENT BIO w/ Rating Overweight; Catalysts for CN Biotech Sector Concentrated in 2H26
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China's biotech sector is entering a turning point this year, with fundamentals stabilizing, a resilient innovation base, ongoing licensing transactions, and a continuous recovery in financing activities, Morgan Stanley wrote in its research report. In 1H26, however, the market saw only limited high-conviction investment themes and unstable risk appetite Beta due to a scarcity of catalysts. With increasing geopolitical uncertainties, Morgan Stanley expects a broader de-risking sector rotation, with high Beta, long-duration sectors like biotech facing greater allocation pressure. In Morgan Stanley's estimate, China's biotech sector will experience range-bound fluctuations in 1H26, while catalysts, capital reallocation, and more favorable valuations will lay the foundation for a clearer stock price direction in 2H26. The next growth phase will likely begin when meaningful data releases, business development (BD) activities, and visibility of licensing transactions start to show up. As most events are concentrated in 2H26, Morgan Stanley believes further industry revaluation should be deferred rather than disrupted. Morgan Stanley has reinitiated coverage on INNOVENT BIO (01801.HK) with an Overweight rating and a target price of HKD130. It has also tweaked its target prices for several stocks, details of which are available in a separate table. AAStocks Financial News |
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