Strong pipeline, M&A activity could trigger rapid earnings for Greater China's healthcare firms: UOB

The industry is expected to become a key international player.

Greater China’s healthcare sector maintains an overweight rating, with the industry expected to emerge as a key player on the international stage in 2026, according to a UOB Kay Hian report.

The sector is benefiting from a world-class pharmaceutical pipeline and a strong rebound in merger and acquisition (M&A) activity.

UOB analysts said growth in 2026 will be driven by global demand for targeted therapies, including antibody-drug conjugates, bi-specific antibodies, and siRNA.

Data from 2025 shows that Chinese companies completed 157 cross-border out-licensing deals, up from 94 in 2024, with total deal values rising 160% year-on-year to $135.7b.

The report cited robust financial performance, research and development (R&D) and product launches, globalisation, and policy support as key growth catalysts.

However, analysts highlighted several risks, including rising US–China trade tensions, geopolitical uncertainties, domestic or overseas regulatory changes, and potential economic downturns that could affect R&D investment and market launches.

M&A trends are also shifting, with companies increasingly seeking strategic control over platforms and production across the value chain, rather than simply “chasing the next blockbuster.”

The National Healthcare Security Administration has issued trial pricing guidelines to support the medical robotics sector, facilitating commercialisation of technologies such as surgical robots and 3D printing.

The report also noted recent regulatory milestones and highlighted top picks, which maintained a “buy” recommendation.