Group 1: Market Overview - Northbound trading recorded a net buy of HKD 96.47 billion, with HK Stock Connect (Shanghai) contributing HKD 81.67 billion and HK Stock Connect (Shenzhen) contributing HKD 14.79 billion [1] - The most bought stocks included Meituan-W (03690), China Construction Bank (00939), and Xiaomi Group-W (01810) [1] - The most sold stocks were the Tracker Fund of Hong Kong (02800), Tencent (00700), and SMIC (00981) [1] Group 2: Stock Performance - Alibaba-W (09988) saw a net inflow of HKD 2.77 billion, with buy and sell amounts of HKD 21.78 billion and HKD 19.01 billion respectively [2] - Meituan-W (03690) received a net buy of HKD 19.21 billion, with significant growth in sales during the "Meituan 618" promotion, achieving a year-on-year increase of twofold [6] - Xiaomi Group-W (01810) had a net buy of HKD 6.35 billion, benefiting from strong growth in major appliances and AIoT revenue, which increased by 59% year-on-year [7] Group 3: Sector Insights - China Construction Bank (00939) and Bank of China (03988) received net buys of HKD 13.36 billion and HKD 1.79 billion respectively, indicating a continued interest in domestic bank stocks [6] - The pharmaceutical sector saw Stone Pharmaceutical Group (01093) with a net buy of HKD 6.25 billion, as it engages in potential transactions that could total around USD 5 billion [7] - Ideal Auto-W (02015) received a net buy of HKD 3.55 billion, with expectations of increased production capacity and upcoming model launches [8] Group 4: Notable Sell-offs - SMIC (00981) faced a net sell of HKD 1.44 billion, with guidance indicating a revenue decline of 4%-6% quarter-on-quarter for Q2 2025 [9] - The Tracker Fund of Hong Kong (02800) experienced a net sell of HKD 8.85 billion, attributed to a lack of catalysts in market sentiment and economic conditions [9] - Tencent (00700) saw a net sell of HKD 8.65 billion, reflecting ongoing market challenges [9]

Group 1 - The core point of the news is the significant rise in the stock price of CSPC Pharmaceutical Group, driven by potential high-value licensing deals, indicating a surge in the value of Chinese innovative drugs [3][5]. - CSPC Pharmaceutical is in deep discussions with multiple independent third parties regarding three potential licensing collaborations, which could yield up to $5 billion in total payments, making it one of the highest licensing amounts for Chinese innovative drugs in 2025 [5][6]. - The market is particularly focused on CSPC's EGFR-ADC drug SYS6010, which has shown promising clinical trial results, including a 39.2% objective response rate and a 93.1% disease control rate in patients with EGFR mutation non-small cell lung cancer [6]. Group 2 - The potential buyers for the licensing deals are expected to be large multinational pharmaceutical companies, with Johnson & Johnson identified as a strong competitor due to its lack of an EGFR-targeting ADC drug [8]. - CSPC's innovative drug business is positioned as a growth driver despite a 21.9% year-on-year decline in traditional drug revenue in Q1 2025, with expected upfront payments from business expansions totaling approximately $2.1 million [8][9]. - The industry is experiencing a record wave of innovative drug licensing deals, with 24 transactions completed in the first five months of 2025, and total amounts exceeding $15.5 billion [9].

Investment Rating - The report assigns a "Neutral" rating to the company with a target price of HKD 7.20, indicating a potential downside of 5.5% from the current closing price of HKD 7.62 [6][10]. Core Insights - The company's performance in Q1 2025 continues to be under pressure from centralized procurement and healthcare cost control, but is expected to improve gradually starting from Q2 2025. The management anticipates achieving three significant business development (BD) licensing deals, each exceeding USD 5 billion in 2025 [2][6]. - The report highlights that excluding BD revenue, the company's Q1 2025 revenue declined by 30% year-on-year, with the traditional medicine segment experiencing a 37% drop. Key therapeutic areas showed declines due to various factors, including price negotiations and centralized procurement impacts [6][11]. - The report projects revenue growth for the company, with estimates for 2025E at RMB 30,040 million, increasing to RMB 35,830 million by 2027E, reflecting a compound annual growth rate [5][11]. Financial Forecast Changes - Revenue estimates for 2025-2027 have been adjusted upwards by 1.5% to 7.5%, while net profit forecasts have been increased by 8% to 13% due to more optimistic expectations regarding BD revenue and operational cost rates [6][7]. - The report indicates a projected net profit of RMB 5,137 million for 2025, with a net profit margin of 17.1%, which is an improvement from previous estimates [5][11]. Market Performance - The company’s stock has shown a year-to-date increase of 59.41%, with a 52-week high of HKD 7.62 and a low of HKD 4.34, indicating significant volatility and potential for future growth [4][10]. - The report notes that the current stock price reflects the anticipated pressures on 2025 performance and future BD transactions, suggesting that the valuation multiples are reasonable with limited upside potential [6][10].

Market Overview - The Hang Seng Index closed down 1.2% at 23,289.77 points, with a total turnover of HKD 271.56 billion. The Hang Seng Tech Index fell 2.48% to 5,170.43 points. For the month, the Hang Seng Index rose 5.29% [1] - Current valuations of the Hang Seng Index are considered moderately low, while the Hang Seng Tech Index is at historical lows, indicating high investment value in the Hong Kong stock market [1] Blue Chip Performance - CSPC Pharmaceutical Group (01093) led blue-chip stocks, rising 6.3% to HKD 8.1, contributing 6.53 points to the Hang Seng Index. The company is in discussions for three potential licensing collaborations, with total payments potentially reaching USD 5 billion [2][4] - Other notable blue-chip movements include Li Auto-W (02015) up 3.79%, CK Infrastructure Holdings (01038) up 2.11%, while BYD Electronic (00285) and Tingyi (00322) saw declines of 6.03% and 5.01% respectively [2] Sector Movements - Large tech stocks generally declined, with Alibaba down 3.56% and Tencent down 2.41%. Apple-related stocks also faced significant drops, with Cowell e Holdings (01478) down 6.61% [3][5] - The automotive sector continued its downward trend, with Xpeng Motors-W (09868) down 5.04% and Great Wall Motors (02333) down 3.03%. Price competition in the automotive industry is expected to intensify [6] Pharmaceutical Sector - The pharmaceutical sector saw gains, with China Antibody-B (03681) up 21.31% and other biotech stocks also performing well. The upcoming ASCO conference is expected to boost interest in innovative drugs [3][4] Notable Stock Movements - Dekang Agriculture (02419) reached a new high, rising 14.15% due to leading industry cost advantages [7] - Sany International (00631) reported a revenue increase of 14.6% year-on-year, with a net profit increase of 23.2% [8] - New World Development (00017) saw a 3.9% increase, with contract sales reaching HKD 24.8 billion, exceeding 95% of its annual target [9] - Li Auto-W (02015) reported a revenue of RMB 25.93 billion for Q1 2025, a 1.1% year-on-year increase [10] - Hand Return Group (02621) experienced a significant drop of 18.19% on its first trading day [11]

Market Performance - The Hang Seng Index closed down by 1.2% [1] - The Hang Seng Tech Index fell by 2.48% [1] Company Performance - BYD Electronics experienced a decline of over 6% [1] - CSPC Pharmaceutical Group saw an increase of 6.3% [1]

Group 1 - Kingsoft Software (03888) saw a nearly 5% drop in stock price, with Q1 revenue increasing by 9% year-on-year to 2.338 billion yuan, but net profit attributable to the parent company slightly decreased by 0.24% to 284 million yuan. Office software and services revenue grew by 6% year-on-year but fell by 13% quarter-on-quarter, while online gaming and other revenue increased by 14% year-on-year but decreased by 20% quarter-on-quarter [1] - Li Auto-W (02015) rose over 7%, reporting a 1.1% year-on-year revenue increase and a 9.4% rise in net profit for Q1. The company expects Q2 delivery volume to increase by 13.3%-17.9% year-on-year, with revenue projected to grow by 2.5%-6.7%. CEO Li Xiang expressed confidence in restoring monthly sales to 50,000 units and plans to launch the pure electric SUV i8 in July [1] - Hand Return Group (02621) debuted on the market but fell over 7% on its first day. The company is an internet-based life insurance intermediary with platforms like Xiaoyusan, Kachaba, and Niubao100, raising approximately 134 million HKD from its listing [1] - Yiming Anke-B (01541) surged over 13%, with its stock price doubling within the month. The company announced preliminary efficacy and safety data for its core product IMM2510 in treating non-small cell lung cancer (NSCLC) during I/II phase clinical trials [1] Group 2 - Meizhong Jiahe (02453) increased by over 7%, having developed a proprietary proton therapy language model successfully deployed in a Guangzhou hospital. The company plans to raise approximately 93.94 million HKD through a discounted share placement for equipment procurement, loan repayment, and working capital [2] - Gome Retail (06808) rose over 6%, with reports indicating that after a major shareholder change, the company is on track to transform its business, focusing on sales scale and absolute gross profit by FY2026. The company turned profitable in the second half of the last fiscal year, reporting a net profit of 199 million yuan, and plans to distribute 1.5 billion yuan in dividends for FY2025 [2] - Sany International (00631) saw a rise of over 4%, reporting a 14.6% year-on-year revenue increase to 5.876 billion yuan and a 23.2% rise in net profit to 635 million yuan for Q1. Growth was attributed to global expansion, digitalization, and low-carbon strategies [2] Group 3 - Dekang Agriculture (02419) surged over 8%, with analysts noting that April pig prices remained strong despite the seasonal downturn, and May's supply-demand dynamics are expected to support rising pig prices. The company is recognized for its leading breeding costs, projected to be below 13 yuan per kilogram, with an estimated 30% growth in pig output over the next three years [3] - Fubo Group (03738) increased by over 13%, completing an oversubscribed financing of over 500 million HKD for AI research and financial optimization. The company reported a total revenue increase of approximately 23% year-on-year, with mainland China revenue growing by about 21% and monthly recurring revenue (MRR) increasing by around 30% [3] - Gako Si-B (01167) rose over 8%, with a cumulative increase of over 25% this week. The company received domestic approval for its KRAS G12C inhibitor, used in specific non-small cell lung cancer treatments [3] - Fosun Pharma (02196) increased by over 6%, announcing that its self-developed new drug, Luwo Meitini tablets, has been approved for market release by the National Medical Products Administration [3] Group 4 - The smartphone supply chain stocks collectively fell, with companies like Hillstone Technology dropping over 5% and Sunny Optical, BYD Electronics, and GoerTek all declining over 3%. This decline was attributed to market concerns following the reinstatement of tariffs from the Trump administration [4] - Xiansheng Pharmaceutical (02096) rose over 8%, with five of its drugs selected for the 2025 ASCO annual meeting. The company's innovative drug BD's international expansion has garnered attention, including a deal with AbbVie worth over 1 billion USD [4] - Yika (09923) surged over 10%, following a 27% increase the previous day. The company recently obtained a payment license in Arizona, USA, with a projected nearly 5-fold increase in overseas transaction volume in 2024 [4] - Stone Pharmaceutical Group (01093) rose over 7%, with ongoing negotiations for three potential transactions involving products like EGFR-ADC, with total potential payments reaching approximately 5 billion USD, one of which is expected to be completed in June [4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 10.12 HKD [8][9]. Core Views - The company reported a significant quarter-on-quarter improvement in 1Q25, with revenue of 7.015 billion RMB (-21.9% year-on-year, +11% quarter-on-quarter) and a net profit of 1.48 billion RMB (-8.4% year-on-year, +169% quarter-on-quarter) [1]. - Key drivers for the positive performance include the stabilization of core business and the recognition of upfront payments from Lp(a) and MAT2A small molecule BD transactions [2]. - The company is expected to see a gradual improvement in revenue and profit throughout the year, driven by the inventory cycle and new product launches [2]. - The EGFR ADC clinical trials are progressing rapidly, with promising data expected to enhance the company's international potential [3]. - The company is focusing on innovative pipelines, including HER2-targeted therapies and GLP-1 analogs, with expected market entries in the coming years [4]. Financial Projections - The company forecasts EPS of 0.49, 0.50, and 0.57 RMB for 2025, 2026, and 2027 respectively, with a target price based on a 19x PE ratio for 2025 [5]. - Revenue projections for 2025 are estimated at 31.101 billion RMB, with a conservative estimate of approximately 4 billion RMB in net profit for the year [2][19]. - The report anticipates a steady increase in revenue and profit margins, with a projected net profit margin of 18.31% for 2025 [19].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 10.12 [8][9]. Core Views - The company reported a significant quarter-on-quarter improvement in 1Q25, with revenue of RMB 7.015 billion (-21.9% year-on-year, +11% quarter-on-quarter) and a net profit of RMB 1.48 billion (-8.4% year-on-year, +169% quarter-on-quarter) [1]. - The improvement is attributed to stable core business performance and the recognition of upfront payments from Lp(a) and MAT2A small molecule BD transactions [2]. - The company is expected to see quarterly revenue and profit growth throughout the year, with a conservative estimate of approximately RMB 4 billion in annual core profits [2]. - The EGFR ADC clinical trials are progressing rapidly both domestically and internationally, indicating strong potential for overseas expansion [3]. - The company has a robust pipeline with significant BD progress and innovative platforms, enhancing its potential for international collaboration [4]. Financial Forecast and Valuation - The company’s EPS is projected to be RMB 0.49, 0.50, and 0.57 for the years 2025, 2026, and 2027 respectively, with a target PE of 19 times for 2025 [5]. - The estimated revenue for 2025 is RMB 31.101 billion, with a net profit of RMB 5.694 billion [19]. - The report highlights a significant reduction in sales expense ratio from 33% in 1Q24 to 24% in 1Q25, indicating improved cost management [2]. Key Metrics - The company’s market capitalization is approximately HKD 87.769 billion, with a closing price of HKD 7.62 as of May 29 [9]. - The projected revenue growth rates for the upcoming years are 7.21%, 8.35%, and 8.10% for 2025, 2026, and 2027 respectively [20].

Group 1: Market Overview - The report indicates that the US court's ruling against imposing comprehensive tariffs has led to market optimism regarding the end of the trade war, resulting in a rise in US stock markets and a halt to the five-day decline in A-shares [2][3] - The Hang Seng Index opened lower but rebounded significantly, closing up 315 points or 1.4%, with notable increases in major blue-chip stocks such as Meituan, Alibaba, and JD.com [3] Group 2: Macroeconomic and Industry Dynamics - The Financial Secretary of Hong Kong, Paul Chan, expressed intentions to strengthen ties with the Middle East market, highlighting the potential for collaboration in various financial products, including bonds and derivatives, following the listing of the first Saudi Islamic bond ETF in Hong Kong [6] - The CEO of Hong Kong Exchanges and Clearing, Charles Li, noted the growing momentum for connectivity between Hong Kong and Middle Eastern markets, with significant cooperation already established across various sectors [7] Group 3: Company News - New World Development is in the process of securing an HKD 87.5 billion refinancing deal, which has garnered significant attention from Hong Kong bankers, with at least 12 banks agreeing to terms so far [10] - CSPC Pharmaceutical Group reported a year-on-year decrease of 8.36% in net profit for the first quarter, with total revenue down 21.91%, primarily due to the impact of government policies on drug pricing [11] - Meizhong Pharmaceutical announced a placement of 18.6 million new H-shares at a discount of 19.7% to raise HKD 100 million for various operational needs [12]

Core Viewpoint - The Hong Kong stock market is undergoing significant changes, with a focus on the AI industry and the influx of quality companies, which is expected to drive future growth and investment opportunities [2][4]. Group 1: Market Performance - The Hang Seng Index opened down 0.99%, while the Hang Seng Tech Index fell by 1.26% [1]. - The influx of capital from mainland China is strengthening pricing power in the Hong Kong market, with expectations of continued inflows [2]. Group 2: Investment Opportunities - The AI industry is anticipated to lead the Hong Kong stock market upward, benefiting from high capital expenditure and the accumulation of scarce assets [2]. - Quality Chinese assets are seen as a fundamental basis for the sustainable growth of the Hong Kong stock market [3]. - The valuation of Hong Kong stocks is recovering, with the Hang Seng Index's PE ratio rising from approximately 7.5 times to 10.5 times, indicating room for further appreciation compared to historical highs [3]. Group 3: IPO Trends - The Hong Kong IPO market is expected to see a significant revival in 2025, providing a crucial window for domestic companies to raise foreign capital [3]. - The trend of A-share companies listing in Hong Kong is driven by strategic overseas expansion, regulatory advantages, and improved liquidity in the Hong Kong market [4]. Group 4: Government Policies - The Hong Kong government has implemented several supportive policies for the stock market, including lowering stamp duties and optimizing trading mechanisms to enhance market liquidity and attractiveness [5].