Core Viewpoint - HSBC Global Research upgraded the rating of CSPC Pharmaceutical Group (01093.HK) from "Hold" to "Buy" and raised the target price from HKD 4.7 to HKD 9.5, indicating a potential upside of 21% based on a discounted cash flow valuation method [1] Financial Performance - In the first quarter of this year, CSPC's revenue and net profit decreased by 22% and 8% year-on-year, respectively [1] - However, product sales and profit showed a quarterly increase of 12% and 60%, indicating a gradual recovery from centralized procurement pressures [1] Innovation and Business Development - HSBC is optimistic about CSPC's innovative drugs due to the following reasons: 1. CSPC announced on May 30 that it is advancing three potential licensing deals, suggesting stronger and faster business expansion than previously expected [1] 2. Robust data for SYS6010 [1]

Group 1: Net Inflows and Outflows - Meituan-W recorded a net inflow of HKD 10.75 billion, while BYD Company saw a net inflow of HKD 3.84 billion [1] - Xiaomi Group-W experienced a net outflow of HKD 16.12 billion, and Tencent Holdings faced a net outflow of HKD 14.54 billion [1][4] - Southbound funds have continuously net bought Meituan for 14 days, totaling HKD 154.8559 billion, and have net sold Tencent for 5 days, totaling HKD 45.2192 billion [4] Group 2: Company-Specific Insights - Old Puh Gold (06181.HK) received a net inflow of HKD 2.36 billion, with a new product launch expected to enhance consumer experience and sales growth due to rising gold prices [6] - Zhong An Online (06060.HK) attracted a net inflow of HKD 1.62 billion, benefiting from the upcoming stablecoin regulations in Hong Kong and strong growth in medical and auto insurance premiums [7] - Meituan-W's recent performance showed significant growth in new customers, particularly among the post-95 generation, with over 50 product categories seeing sales growth exceeding 100% year-on-year [7]

Group 1 - The Hong Kong stock market experienced a decline, with the Hang Seng Index down by 0.31% and the Hang Seng Tech Index down by 0.75%, while the pharmaceutical and biotechnology sector underwent a correction [1] - The Hong Kong Innovative Drug ETF (159567) fell by 0.43%, with a turnover rate exceeding 6% and trading volume quickly surpassing 100 million yuan, indicating active trading [1] - The number of license-out transactions by Chinese pharmaceutical companies reached 33 in Q1 2025, totaling 36.633 billion USD, representing a year-on-year increase of approximately 258%, indicating a shift towards international innovation and research [1] Group 2 - Longcheng Securities suggests that favorable policies for the pharmaceutical sector are emerging, with expectations for steady recovery in industry sentiment, particularly in the hospital market affected by previous anti-corruption and centralized procurement measures [2] - Oriental Securities highlights significant breakthroughs for foreign innovative drugs at the recent ASCO conference, while also noting the strong competitive edge of domestic innovative drugs, recommending attention to companies with international competitive advantages [2]

Core Viewpoint - The article discusses the recent business development (BD) announcements by the company, highlighting the potential for significant financial transactions that could enhance its short-term performance despite recent disappointing earnings reports [2][6][12]. Group 1: Business Development Announcements - The company announced three potential BD transactions, each valued at approximately $5 billion, totaling a potential of $15 billion [2][6]. - One of the transactions is in the late stages and is expected to be completed in June [2][6]. - The market reacted positively to the BD news, with the company's stock price rising significantly, bringing its market capitalization close to 100 billion [3][5]. Group 2: Financial Performance and Challenges - The company reported a revenue decline of 7.8% year-on-year for 2024, with a projected revenue of 29 billion [8]. - Net profit for 2024 is expected to drop by 25.4% to 4.682 billion [8]. - In Q1 2025, revenue fell by 21.9% to 7 billion, missing expectations [8]. Group 3: Market Concerns and Future Outlook - The company faces significant pressure due to declining sales of its key product, Enbipu, which is experiencing challenges from price negotiations and patent expirations [8][9]. - There are concerns about the company's ability to replace its flagship products and maintain growth amid increasing competition from generics [9][20]. - The article notes that while BD announcements can drive stock prices up, the actual realization of milestone payments is uncertain, with historical data showing a low success rate [15][21]. Group 4: Strategic Moves and Market Position - The company is increasing its focus on BD to demonstrate its innovation capabilities and support its transformation efforts [12][18]. - It has engaged in significant capital operations, including a large share buyback plan, to manage its market value [19]. - The company is optimistic about future product pipelines, particularly in the area of innovative drugs, but faces intense competition from established players [20][21].

Group 1 - Hansoh Pharmaceutical granted Regeneron Pharmaceuticals exclusive overseas licensing for its GLP-1/GIP dual receptor agonist HS-20094, which has completed multiple Phase II clinical trials and is currently in Phase III trials in China [1][2] - The licensing agreement includes an upfront payment of $80 million, potential milestone payments of up to $1.93 billion, and double-digit royalties on future sales [2][3] - Recent licensing deals by Chinese pharmaceutical companies indicate a growing trend, with 33 license-out transactions completed in Q1 2025, totaling $36.633 billion, a year-on-year increase of approximately 258% [1][6] Group 2 - The licensing deal with Pfizer for the PD-1/VEGF dual antibody SSGJ-707 includes a record upfront payment of $1.25 billion, with potential milestone payments reaching $4.8 billion [3] - Other companies, such as Sinovant and Ansai, have also announced licensing agreements, indicating a robust market for Chinese pharmaceutical innovations [3][4] - The 2025 ASCO annual meeting showcased over 70 original research results from China, highlighting the international competitiveness of Chinese innovative drugs [4][5] Group 3 - The overall trend shows that Chinese innovative drugs are gaining global value, with a significant increase in licensing transactions and amounts [6][7] - The pharmaceutical industry is expected to see steady recovery, driven by the growing demand for innovative therapies and the improvement in the quality and quantity of domestic innovative drugs [7]

Summary of the Conference Call for 石药集团 (Shiyao Group) Industry and Company Overview - The conference call focuses on 石药集团, a pharmaceutical company specializing in neurology and oncology products, with significant developments in business development (BD) partnerships and clinical trials [2][3][4]. Key Points and Arguments Neurology Products - **恩必普 (Enbip)** is expected to maintain growth in 2025 through patient education and retail pharmacy channels, enhancing accessibility for stroke patients [2][5]. - **灵舒乐 (Ling Shule)** has rapidly increased in revenue after receiving approval for stroke emergency indications, with projected income reaching 1 billion yuan in 2025 [2][5]. Oncology Developments - **BRERA ADC** targets EGFR TKI-resistant lung cancer patients, showing an overall response rate (ORR) of 39.2% in non-EGFR mutation non-small cell lung cancer (NSCLC) and 63.2% in EGFR-sensitive mutation patients [2][6]. - Two key clinical trials are underway: a Phase III trial initiated in March 2025 and a Phase II trial for first-line immunotherapy combined with OCT therapy expected to start Phase III this year [2][6]. Business Development Partnerships - Recent BD collaborations include: - A licensing agreement with AstraZeneca for LPA with an upfront payment of 100 million USD [2][7]. - A licensing agreement with BeiGene for M a M a T two a with an upfront payment of 150 million USD [2][8]. - An agreement with ADC RO-ONC ADC and additional licensing with ET 康地伊利康脂质体 [2][8]. - Three significant BD projects are anticipated to materialize in 2025 [2][8]. Revenue and Profit Forecast - 太平洋医药 forecasts revenue for 石药集团 to grow from 29.4 billion yuan in 2025 to 31.5 billion yuan in 2027, with profits expected to rise from 4.656 billion yuan to 5.648 billion yuan during the same period [2][9]. - The company is expected to maintain positive growth rates, with a potential valuation recovery as performance improves and BD projects are realized [2][9]. Pipeline and Product Development - The company has a comprehensive pipeline, including small molecules and ADCs targeting HER2 and first-in-class indications, focusing on major cancers such as gastric, breast, ovarian, and colorectal cancers [2][10]. - The **6,010 EGFR ADC** is a key product in NSCLC treatment, currently in Phase III trials, with a low incidence of ERBB-related adverse events [2][11]. HER2 ADC Product Line - The HER2 ADC product line includes **Enhertu ADC**, which is in Phase III for HER2 low-expressing advanced breast cancer, with BLA submission expected in 2026 [2][12]. - Additional BLA submissions for HER2-positive advanced breast cancer and ovarian cancer are anticipated in 2027 [2][12]. Small Molecule RNA Innovation - The small molecule RNA innovation platform includes product **2053**, which shows significant and lasting lipid-lowering effects, having completed Phase I and entered Phase II trials [2][13]. Future Outlook and Valuation - The current valuation of 石药集团 is considered low, but there is significant potential for recovery as BD initiatives are executed and oncology ADC pipelines progress [2][14]. - The company is well-positioned for future growth, leveraging its strong small molecule innovation capabilities and multiple promising platforms [2][14].

Market Overview - On June 4, the Hang Seng Index rose by 0.60%, with southbound trading totaling HKD 1,063.30 billion, comprising buy transactions of HKD 549.23 billion and sell transactions of HKD 514.07 billion, resulting in a net buy of HKD 35.16 billion [2][4] Active Stocks - The most actively traded stock by southbound funds was Xiaomi Group-W, with a total transaction amount of HKD 54.40 billion. Meituan-W and Alibaba-W followed with transaction amounts of HKD 47.39 billion and HKD 43.75 billion, respectively [2][3] - In terms of net buying, Meituan-W led with a net buy of HKD 14.14 billion, followed by Alibaba-W with HKD 6.20 billion and BYD Company with HKD 3.94 billion [2][3] Net Selling Stocks - Tencent Holdings experienced the highest net selling amount at HKD 14.36 billion, despite its stock price increasing by 1.39%. Xiaomi Group-W and SMIC faced net selling amounts of HKD 13.75 billion and HKD 1.35 billion, respectively [2][4] Continuous Net Buying - Three stocks have seen continuous net buying for more than three days, with Meituan-W leading at 13 days, followed by CSPC Pharmaceutical Group at 4 days and Alibaba-W at 3 days. The total net buying amounts during this period were HKD 144.10 billion for Meituan-W, HKD 22.53 billion for CSPC, and HKD 16.49 billion for Alibaba-W [3]

智通财经APP获悉，2025年6月4日当天，小米集团-W(01810)、美团-W(03690)、阿里巴巴-W(09988)位 居沪港通(南向)成交额前3位，成交额分别为34.44 亿元、24.70 亿元、23.71 亿元；美团-W(03690)、阿 里巴巴-W(09988)、小米集团-W(01810) 位居深港通(南向)成交额前3位，成交额分别为22.69 亿元、 20.04 亿元、19.96 亿元。 深港通(南向)十大活跃成交公司 公司名称 成交金额 净买入额 美团-W(03690) 22.69 亿元 +8.59 亿元 阿里巴巴-W(09988) 20.04 亿元 +6.58 亿元 小米集团-W(01810) 19.96 亿元 -5.72 亿元 腾讯控股(00700) 19.52 亿元 -7.59 亿元 信达生物(01801) 13.52 亿元 +7053.74 万元 泡泡玛特(09992) 9.42 亿元 +1.55 亿元 中芯国际(00981) 8.49 亿元 -3.25 亿元 比 亚迪股份(01211) 8.46 亿元 +3.94 亿元 石药集团(01093) 7.97 亿元 +3.31 亿元 思摩尔 ...

Core Viewpoint - The article highlights a silent revolution in the biotechnology sector in China, where domestic pharmaceutical companies are emerging as global leaders in drug discovery, particularly in the innovative drug segment, contrasting with the rapid advancements in AI technology [1]. Group 1: Market Performance and Trends - The Hong Kong innovative drug sector has seen significant growth, with ETFs like Huatai-PB and others rising by approximately 42% year-to-date as of May 30 [1]. - Chinese innovative drug companies have made notable strides in international markets, exemplified by the $60 billion exclusive development agreement between 3SBio and Pfizer, setting a record for domestic drug licensing [1]. - The total transaction amount for potential business collaborations by companies like CSPC Pharmaceutical is nearing $50 billion, indicating a robust trend in high-value overseas licensing deals [1]. Group 2: Growth Metrics - The number of innovative drugs approved in China has surged from 3 in 2015 to 39 in 2024, marking a 12-fold increase and elevating China from third to second place globally [6]. - The number of innovative drugs undergoing clinical trials in China has increased from 124 in 2015 to 704 in 2024, a 4.7-fold rise, positioning China as the leader in this category [6]. - The procurement amount for innovative drugs in hospitals with over 100 beds has grown from 137.2 billion yuan in 2015 to 257.6 billion yuan in 2024, an 88% increase, with its share of total procurement rising from 20.9% to 29.2% [7]. Group 3: Factors Driving Growth - The return of overseas-educated talent has significantly contributed to the innovation landscape in China's biotechnology sector, as many skilled researchers transitioned from corporate labs to entrepreneurial ventures [11]. - The establishment of a robust diagnostic and reagent business in China during the early 2000s laid the groundwork for advancements in biotechnology [13]. - The increasing domestic market demand, driven by a large and aging population, has created substantial opportunities for innovative drug development, particularly for treatments related to chronic diseases and cancer [12]. Group 4: Global Opportunities and Challenges - The global pharmaceutical market is facing a wave of patent expirations, prompting companies to seek external collaborations, where China's strong R&D capabilities can meet international demands [14]. - The licensing model is seen as a necessary step for Chinese biotech firms to gain experience and eventually achieve global distribution and trial capabilities [10]. - Despite the current reliance on licensing, there is potential for Chinese companies to evolve into global leaders in biotechnology as their ecosystems mature [18]. Group 5: Innovation and Competitive Landscape - China's biotechnology sector is recognized for its rapid iteration and improvement of existing drugs, which is a form of innovation that benefits society significantly [18]. - The development of the bispecific antibody Ivosidenib, which reportedly outperforms Keytruda, exemplifies China's growing technical prowess in biotechnology [18]. - The perception of innovation in China is shifting, as the ability to produce better and safer versions of existing drugs is increasingly valued [33].

Group 1: Market Activity - Net purchases included Meituan-W at 10.89 billion, China Construction Bank at 9.76 billion, and CSPC Pharmaceutical Group at 9.3 billion [1] - Net sales included the Tracker Fund of Hong Kong at 19.39 billion, Xiaomi Group-W at 11.31 billion, and Tencent Holdings at 6.25 billion [4] - Southbound funds have continuously net bought Meituan for 12 days, totaling 129.9659 billion HKD, and have net sold Tencent for 3 days, totaling 16.3192 billion HKD [4] Group 2: Company-Specific Developments - Meituan-W (03690.HK) received a net purchase of 10.88 billion HKD, with significant growth in transaction volume during the "Meituan 618" promotional event, showing a year-on-year increase of twofold [6] - CSPC Pharmaceutical Group (01093.HK) received a net purchase of 9.3 billion HKD, with potential transactions involving product development and commercialization that could total approximately 5 billion USD [7] - Kangfang Biotech (09926.HK) received a net purchase of 6.87 billion HKD, with positive developments in global trial data that are crucial for international licensing [7]