Which pharmaceutical sectors are sustaining growth, and which continue to face headwinds? Our analysis of the latest half-year reports reveals a clear picture.

Overall Revenue Rises Steadily, Net Profit Shows Noticeable Improvement

During the first half of 2026, the structural divergence within the pharmaceutical industry deepened. Innovative drugs and innovative medical devices have emerged as core growth engines, while traditional generics, traditional Chinese medicine (TCM), and parts of the consumer healthcare sector continue to face pressure. Excluding the pharmaceutical distribution sector, 480 drug companies generated combined operating revenue of RMB 727.728 billion, a year-on-year increase of 2.48%, and achieved a net profit attributable to shareholders of RMB 98.894 billion, a substantial year-on-year growth of 12.80%.

A breakdown by sector shows that 158 chemical pharmaceutical companies generated revenue of RMB 274.933 billion, up 1.66% year-on-year, with net profit attributable to shareholders reaching RMB 32.796 billion, up 23.96%, leading the pack in profitability improvement, largely due to contributions from innovative drugs. The 66 TCM companies saw revenue of RMB 166.422 billion, down 4.72%, and net profit of RMB 19.942 billion, down 10.66%, making it the only one of the five major sectors to see declines in both revenue and profit.

The 144 medical device companies reported revenue of RMB 133.957 billion, up 7.08%, and net profit of RMB 21.016 billion, up 4.35%, achieving growth in both metrics. The 54 medical service companies generated revenue of RMB 104.338 billion, up 12.28%, and net profit of RMB 16.168 billion, up 15.92%, recording the fastest revenue growth among the five sectors with increases across the board. Meanwhile, the 58 biological products companies saw revenue of RMB 57.332 billion, up 2.39%, and net profit of RMB 8.972 billion, a striking 74.07% increase, though this was largely driven by one-off income from overseas licensing deals.

Top Companies by Revenue in Each Sub-Sector

In the chemical pharmaceutical sector, the first half of 2026 saw slight revenue growth but a marked improvement in profitability, with revenue up 1.66% and net profit attributable to shareholders up 23.96%. Innovative drug makers served as the key growth engine. The sector's R&D spending hit RMB 29.836 billion, representing an R&D expense ratio of 10.85%, one of the highest across all sectors and underscoring its innovation-driven character.

BeiGene Ltd (HKEX: 06160) led the sector with revenue of RMB 22.220 billion, and its R&D investment of RMB 7.953 billion (an R&D expense ratio of 33.79%) topped the industry. Its revenue grew 26.84% year-on-year, while net profit surged 627.15% to RMB 3.271 billion, driven by the global expansion of core products like zanubrutinib, setting a benchmark for Chinese innovative drug companies going global. Huadong Medicine Co Ltd (SZSE: 000963) posted revenue of RMB 22.067 billion, up 1.81%, and net profit of RMB 1.861 billion, up 2.53%. Fosun Pharma (HKEX: 02196) reported revenue of RMB 20.442 billion, up 4.75%, with net profit of RMB 1.721 billion, up 1.15%.

Jiangsu Hengrui Pharmaceuticals Co Ltd (SHSE: 600276) saw revenue dip slightly by 1.94% to RMB 15.456 billion, but maintained robust net profit of RMB 4.465 billion. Its R&D spending of RMB 3.493 billion, an R&D expense ratio of 22.60%, ranked second in the sector, with its commercial launch of innovative product portfolios continuing to pay off. Sichuan Kelun Pharmaceutical Co Ltd (SZSE: 002422) reported revenue of RMB 8.839 billion, down 2.70%, and net profit of RMB 1.128 billion, up 12.71%. Traditional pharmaceutical companies are generally under pressure: Joincare Pharmaceutical Group Industry (SHSE: 600380) saw revenue fall 16.66% to RMB 6.583 billion, and net profit decline 17.49% to RMB 648 million, as the impact of volume-based procurement price cuts and product mix adjustments continues to be felt.

In the TCM sector, the first half of 2026 saw both revenue and net profit fall, down 4.72% and 10.66% respectively, as fluctuating herbal material prices, medical insurance cost controls, and hospital prescription pressures persist. The sector's R&D spending totaled RMB 4.384 billion, with an R&D expense ratio of only 2.63%, the lowest among all sectors, suggesting a relative lack of innovation momentum.

Baiyunshan Pharmaceutical Co Ltd (SHSE: 600332) led with revenue of RMB 42.091 billion, up a marginal 0.61%, but its net profit dropped 16.70% to RMB 2.096 billion, with its high proportion of pharma distribution and consumer health businesses diluting overall profitability. Yunnan Baiyao Group Co Ltd (SZSE: 000538) grew steadily, with revenue up 2.95% to RMB 21.884 billion and net profit up 1.88% to RMB 3.701 billion. China Resources Sanjiu Medical & Pharmaceutical Co Ltd (SZSE: 000999) saw revenue rise 1.37% to RMB 15.014 billion, though net profit slipped 7.96% to RMB 1.671 billion. Both Beijing Tongrentang Co Ltd (SHSE: 600085) and Zhangzhou Pientzehuang Pharmaceutical Co Ltd (SHSE: 600436) saw declines, with the former's revenue down 14.23% to RMB 8.379 billion and net profit down 23.19% to RMB 726 million, while the latter's revenue fell 14.98% to RMB 4.573 billion and net profit dropped 24.22% to RMB 1.093 billion. In contrast, Tasly Pharmaceutical Group Co Ltd (SHSE: 600535) saw revenue decline 2.03% to RMB 4.201 billion, but its net profit improved 15.23% to RMB 893 million, indicating better profitability.

The medical device sector achieved growth in both revenue and profit in the first half of 2026, with revenue up 7.08% and net profit up 4.35% year-on-year. The sector's recovery is underway, driven by domestic substitution and overseas expansion. R&D investment reached RMB 11.920 billion, for an R&D expense ratio of 8.90%.

Mindray Medical International Ltd (SZSE: 300760) led the sector with revenue of RMB 17.747 billion, up 6.00%, but its net profit fell 5.37% to RMB 4.797 billion, showing resilience on the top line while profitability was affected by procurement price cuts and exchange rate fluctuations. United Imaging Healthcare Co Ltd (SHSE: 688271) saw revenue jump 17.22% to RMB 7.052 billion, with R&D spending reaching RMB 1.011 billion (an R&D expense ratio of 14.33%), among the highest in the sector. However, net profit fell 10.12% to RMB 897 million, as investments in high-end imaging equipment and overseas expansion are still ramping up. Intco Medical Technology Co Ltd (SZSE: 300677) achieved high growth, with revenue up 40.61% to RMB 6.909 billion and net profit up 17.86% to RMB 837 million, driven by both higher glove volumes and prices. Yuwell Medical (SZSE: 002223) saw revenue decline 1.92% to RMB 4.569 billion and net profit drop 29.92% to RMB 843 million, while Blue Sail Medical Co Ltd (SZSE: 002382) reported revenue of RMB 3.705 billion, up 29.67%, and net profit of RMB 96 million, a 179.72% surge, marking a return to profitability.

The medical services sector, encompassing CRO/CDMO, diagnostics, and specialty care, saw both revenue and net profit grow in the first half of 2026, with revenue up 12.28% and net profit up 15.92% year-on-year, the fastest revenue growth among the five major sectors. R&D spending in the sector totaled RMB 3.622 billion.

WuXi AppTec Co Ltd (HKEX: 02359) posted revenue of RMB 28.897 billion, up 38.93%, with net profit of RMB 11.080 billion, up 29.43%. The CRO leader's position remains solid, contributing nearly 70% of the sector's total profit, as its global capacity and order delivery capabilities continue to deliver. Pharmaron Beijing Co Ltd (HKEX: 03759) grew steadily, with revenue up 17.92% to RMB 7.595 billion and net profit up 6.96% to RMB 750 million. Asymchem Laboratories (Tianjin) Co Ltd (SZSE: 002821) saw revenue rise 13.13% to RMB 3.607 billion, but net profit fell 15.71% to RMB 520 million, reflecting price competition pressures in the CDMO space. The diagnostics and specialty segments show a clear divergence: DIAN Diagnostics Group Co Ltd (SZSE: 300244) saw net profit soar 2160.87% to RMB 232 million and Kingmed Diagnostics Group Co Ltd (SHSE: 603882) recorded RMB 190 million, up 324.27% and returning to profitability, though both were boosted by a low comparison base or turnaround effects. Meanwhile, Tigermed Consulting Co Ltd (SZSE: 300347) posted a net loss of RMB 413 million, and Porton Pharma Solutions Ltd (SZSE: 300363) also fell into the red, indicating that laggards continue to struggle. Aier Eye Hospital Group Co Ltd (SZSE: 300015) reported revenue of RMB 11.946 billion, up 3.81%, but net profit fell 33.83% to RMB 1.357 billion, with revenue stable in ophthalmic services but profitability under pressure.

The biological products sector posted substantial increases in both revenue and net profit in the first half of 2026, with revenue up 2.39% and net profit up 74.07% year-on-year. However, this was largely driven by a one-time contribution from RemeGen Co Ltd's (HKEX: 09995) overseas licensing income, and the sector remains under pressure when excluding this factor. The sector's R&D investment reached RMB 8.658 billion, with an R&D expense ratio of 15.10%, the highest among all sectors.

RemeGen Co Ltd (HKEX: 09995) saw revenue surge 433.11% to RMB 5.853 billion, with net profit reaching RMB 4.662 billion, up an extraordinary 1137.06%, driven primarily by upfront payments and milestone fees from overseas BD collaborations, becoming the biggest source of the sector's profit surge. Changchun High-Tech Industry (Group) Co Ltd (SZSE: 000661) faced significant pressure, with revenue down 16.06% to RMB 5.543 billion and net profit down 51.64% to RMB 475 million, due to the impact of growth hormone procurement and competitive pressures, though its R&D spending of RMB 948 million (an R&D expense ratio of 17.11%) remains at the forefront of the sector as it actively pursues innovative transformation. Liaoning Chengda Co Ltd (SHSE: 600739) reported revenue of RMB 4.411 billion, down 13.56%, but net profit of RMB 1.620 billion, up 125.77%. Chongqing Zhifei Biological Products Co Ltd (SZSE: 300122) saw revenue fall 18.36% to RMB 4.024 billion, and posted a net loss of RMB 809 million, reflecting significant pressure on vaccine sales. Shanghai RAAS Blood Products Co Ltd (SZSE: 002252) reported revenue of RMB 3.209 billion, down 18.79%, and net profit of RMB 661 million, down 35.80%.

Innovative biopharma companies are showing notable strength: Chongqing Taloph Pharmaceutical Co Ltd (SHSE: 600867) saw revenue grow 21.58% to RMB 1.837 billion and net profit rise 11.37% to RMB 477 million, while Shanghai Junshi Biosciences Co Ltd (HKEX: 01877) reported revenue of RMB 1.696 billion, up 45.18%, and net profit of RMB 22 million, up 105.25%.

Appendix: Detailed Half-Year Performance List for 480 Pharmaceutical Companies

Note: Data is sourced from listed companies' 2026 half-year reports, as of August 31, 2026, and is sorted in descending order of revenue.