Long-term care insurance implementation imminent, Jiuan Medical hits two consecutive limit-ups. Institution: Can initiate a left-side position in innovative drugs and other assets with deep adjustments and low valuations.

Ask AI · Why do investment opportunities exist at a valuation low point for assets such as innovative drugs?

On March 30, Jiu’an Medical (002432.SZ) hit the daily limit to complete a two-day winning streak, with a cumulative gain of 20.99% over two days.

On the news front, Jiu’an Medical has made substantive progress in the AI medical field. Its “AIoT diabetes home care assistant” caregiver Copilot has been launched recently. The product is positioned as an intelligent assistant for caregivers, and the full-version AI module is expected to start a phased gray-scale test in the second quarter of 2026. In addition, Jiu’an Medical recently released a rather impressive 2025 annual earnings forecast: it expects attributable net profit of 2.02 billion yuan to 2.35 billion yuan, representing year-on-year growth of 21.05% to 40.83%.

In recent days, the innovative drugs sector has remained active. As of the time of writing, Shanghai Shengshi Health (688336.SH) is up more than 11%, Qixing Pharmaceutical (688136.SH) is up more than 7%, Nokea Pharmaceuticals (688428.SH) is up nearly 7%, and Rongchang Biotech (688331.SH), Tonghua Dongbao (600867.SH), Kanghong Pharmaceuticals (002773.SZ), Junshi Bio-U (688180.SH), Watson Biologics (300142.SZ), North China Pharmaceutical (600812.SH), Nativus Technology (688690.SH) and others are also rising.

Data show that from January to March 2026, China’s total proceeds from outbound licensing transactions of innovative drugs exceeded $60 billion, approaching about half of all of 2025. China’s innovative drug outbound licensing transaction value has been impressive. BD collaborations have been active, catalyzing market sentiment in the pharmaceutical and biotech sector.

Huayuan Securities said that the nationwide rollout of long-term care insurance is imminent, and it recommends paying attention to rehabilitation care-related tracks. In recent years, China has been in an accelerating phase of population aging. Between 2013 and 2024, the share of China’s population aged 65 and above increased from 9.7% to 15.6%. Currently, China has 320 million seniors aged 60 and above, of whom about 35 million are disabled and unable to care for themselves, creating substantial medical needs. Recently, the “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System” was released, and it is expected that by the end of 2028, the long-term care insurance system will be basically fully implemented nationwide. From being piloted first in 15 initial cities to the expansion of national pilots to 49 cities for full-scale implementation, according to a report by Xinhua News Agency, the long-term care insurance system now covers about 300 million people, has cumulatively benefited more than 3.3 million people with disabilities who are unable to care for themselves, and has seen fund expenditures exceed 100 billion yuan. It is expected that long-term care insurance will gradually open up mid- to long-term incremental space in markets such as elderly care and rehabilitation assistive devices.

A recent research note from CICC points out that, against the current backdrop, a more effective allocation approach is to start from win probability and payout odds, and look for assets with high cost-effectiveness. If the position is relatively low, investors can make a left-side (pre-rebound) layout in assets that have already fully reflected pessimistic expectations, are highly correlated with interest rates and risk preferences, and whose valuations are at a low level after a deep adjustment—for example, Hang Seng Tech, gold, and innovative drugs. These assets may not be the strongest in the short term, but since market expectations have already sunk far enough, the room for further downside is relatively limited. Once the situation eases, or when extreme market expectations fail to materialize, they are more likely to repair sooner. From an allocation perspective, these assets are suitable for gradually building positions on the left side.