China’s healthcare defies Hang Seng slump with 0.9% gain

Investor sentiment, however, weakened during the second quarter.

China's healthcare sector outperformed the broader market in late June 2026, with the Hang Seng Healthcare Index rising 0.9% between 12 and 30 June even as the Hang Seng Index fell 7.4%.

In a market report, brokerage firm UOB Kay Hian said the State Council's approval of the National Health 15th Five-Year Plan (2026-30) on 29 June cemented healthcare as a state priority.

The plan calls for a whole-lifecycle health service system, tighter coordination across medical care, insurance and disease control, and active development of the health industry.

On reimbursement, the National Healthcare Security Administration's preliminary review for the 2026 National Reimbursement Drug List cleared 557 new drugs, whilst 54 new drugs passed review for the Commercial Health Insurance Innovative Drug List.

A newly introduced pre-submission consultation pathway and eight-year price protection mark a shift toward giving the industry greater certainty on pricing and return on research and development investment — addressing a long-standing sector risk.

In the weight-loss drug market, new oral and multi-target therapies are expected to enter China within 12 to 18 months, widening the addressable patient pool.

On medical devices, domestic surgical robotics makers are scaling commercial deployment both at home and abroad, with order volumes and unit placements in the first half of 2026 already surpassing full-year 2025 levels for some product categories.

The internet healthcare segment is also evolving, moving away from a drug-retail model toward full-cycle disease management.

New partnerships between platforms and multinational drugmakers are extending services from prescription fulfilment into ongoing chronic-disease monitoring and treatment support, particularly in obesity, diabetes and other chronic conditions.

Investor sentiment, however, weakened during the second quarter despite the policy support, prompting a sharp rise in share buybacks.

Hong Kong-listed healthcare companies executed a combined $879.8m (HK$6.9b) in buybacks during the second quarter of 2026, more than five times the volume seen in Q1, with 51 companies participating.

The scale of buyback activity — often cited by companies as a response to undervaluation — suggests the market pullback was seen within the industry as disconnected from underlying fundamentals.

Overall, the sector's outlook remains rated MARKET WEIGHT, with the greatest opportunity seen amongst drug innovators with strong pipelines and improving commercial execution.