China Galaxy Securities: Deepseek sparks an AI medical boom, expected to continuously enhance the valuation of the pharmaceutical sector

Zhitong
2025.02.21 06:26
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China Galaxy Securities released a research report stating that the launch of Deepseek will trigger a surge in AI medical applications, which is expected to continuously enhance the valuation of the pharmaceutical sector. The application of AI in the medical field, especially in new drug development, equipment intelligence, and diagnostic services, will drive rapid industry growth. The advancement of AI technology will shift the biopharmaceutical industry from "experience-driven" to "data-driven," bringing significant economic increments to the industry

According to the report from China Galaxy Securities, the release of the Deepseek R1 version in January 2025 will trigger a wave of low-cost, high-quality AI applications. As one of the most important and promising scenarios for AI applications, healthcare's core lies in the resonance between AI large model inference capabilities and healthcare big data. Pharmaceutical companies in the industry are rapidly deploying localized applications of Deepseek, significantly enhancing the performance of specialized large models. AI will widen the gap between industry leaders and followers, benefiting the increase in core business share, while AI applications will generate new services and functions, bringing incremental growth to the long-term development of the industry. From the perspective of AI medical applications, new drug development, equipment intelligence, diagnostic services, and health check services (which are essentially diagnostic services) are expected to advance rapidly, likely continuing to enhance the valuation of the pharmaceutical sector.

Artificial intelligence enhances data inference capabilities, combined with professional databases to increase value

AI technology is transforming the paradigm of the biopharmaceutical industry from "experience-driven" to "data-driven," a trend reflected in many aspects. In the early stages of new drug development, AI can improve research efficiency and accelerate the entry of drugs into clinical trials; in the field of diagnostic services, artificial intelligence empowers various sub-directions through multidimensional means, providing precise diagnostic assistance; in the direction of medical services and healthcare informatization, artificial intelligence can enable various medical scenarios, promoting the accelerated implementation of innovative applications.

A multidimensional perspective on Deepseek applications has a profound impact on the pharmaceutical industry

1) Historical perspective: The arrival of the AI technology singularity may lead to a paradigm shift in the biopharmaceutical industry from "experience-driven" to "data-driven."

2) Economic perspective: The rise in big data processing capabilities and new demands are driving industry expansion. It is estimated that the leap in healthcare data processing capabilities could bring nearly $40 billion per year in direct increments to the global biopharmaceutical market. In the long term, as more demands such as precision medicine are released, the industry may unleash a larger-scale service ecosystem market.

3) Industrial perspective: Industry leaders strengthen rigid barriers, and the market share of core businesses tends to increase. The closed loop of clinical data is always the company's moat. Equipment intelligence requires continuous clinical data feedback to optimize algorithms, while leading companies form a data acquisition closed loop due to their large equipment installation volume, making it difficult for small and medium-sized manufacturers to break through the data scale bottleneck. The cost of intelligent upgrades may further reinforce the scale effect.

4) Investment perspective: The liquidity of pharmaceutical assets is improving, and the valuation center is expected to rise. Based on the liquidity and valuation expansion of the AI medical concept sector, a positive feedback mechanism of "capital inflow - value discovery - reallocation" is formed, supporting the rise of the sector's valuation center.

Recommended AI medical targets to focus on:

Diagnostic services: Kingmed Diagnostics (603882.SH), Dian Diagnostics (300244.SZ); Diagnostic equipment: Mindray Medical (300760.SZ), Lepu Medical (300003.SZ), United Imaging Healthcare (688271.SH), Yuwell Medical (002223.SZ); Health management: Meinian Onehealth (002044.SZ); New drug development: Hongbo Pharmaceutical (301230.SZ), Chengdu Xian Dao (688222.SH); Pharmaceutical processes: Chuan Ning Biological (301301.SZ), etc Risk Warning:

The risk of insufficient growth in pharmaceutical consumption capacity due to increased macroeconomic pressure; the risk that policies such as medical insurance payment for innovative drugs do not meet expectations; the risk of global order shifts caused by geopolitical factors; the risk that centralized procurement or price reductions exceed market expectations

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