Market Overview - On July 2, the Hang Seng Index rose by 0.62%, closing at 24,221.41 points, with a net inflow of HKD 5.036 billion through the southbound trading channel [1] - The total trading volume for the southbound trading was HKD 128.967 billion, with a net buy of HKD 5.036 billion [1] Southbound Trading Details - The Shanghai Stock Exchange's southbound trading had a total transaction amount of HKD 81.984 billion, with a net buy of HKD 1.279 billion [1] - The Shenzhen Stock Exchange's southbound trading had a total transaction amount of HKD 46.983 billion, with a net buy of HKD 3.757 billion [1] Active Stocks - In the Shanghai Stock Exchange's southbound trading, Alibaba-W had the highest transaction amount at HKD 3.170 billion, followed by Chongqing Iron & Steel and Xiaomi Group-W with transaction amounts of HKD 2.929 billion and HKD 2.827 billion, respectively [1] - In terms of net buy amounts, the Yingfu Fund led with a net buy of HKD 1.674 billion, while Alibaba-W had the highest net sell amount at HKD 788 million, closing down by 0.36% [1] Shenzhen Stock Exchange Active Stocks - In the Shenzhen Stock Exchange's southbound trading, Alibaba-W also topped the transaction amount at HKD 2.407 billion, followed by Tencent Holdings and Xiaomi Group-W with transaction amounts of HKD 1.589 billion and HKD 1.582 billion, respectively [2] - The stock with the highest net buy was Innovent Biologics, with a net buy of HKD 651 million, closing up by 1.15%, while Alibaba-W had the highest net sell amount at HKD 945 million, also closing down by 0.36% [2]

Market Overview - On July 2, the Hang Seng Index rose by 0.62%, with southbound funds totaling HKD 128.97 billion in trading volume, including HKD 67.00 billion in buying and HKD 61.97 billion in selling, resulting in a net buying amount of HKD 5.04 billion [1] Southbound Trading Activity - The southbound trading through Stock Connect (Shenzhen) had a total trading volume of HKD 46.98 billion, with HKD 25.37 billion in buying and HKD 21.61 billion in selling, leading to a net buying amount of HKD 3.76 billion [1] - The southbound trading through Stock Connect (Shanghai) had a total trading volume of HKD 81.98 billion, with HKD 41.63 billion in buying and HKD 40.35 billion in selling, resulting in a net buying amount of HKD 1.29 billion [1] Active Stocks - Alibaba-W had the highest trading volume among southbound funds, totaling HKD 55.77 billion, followed by Xiaomi Group-W at HKD 44.08 billion and Chongqing Steel at HKD 37.21 billion [1] - The net buying stocks included 8 companies, with the largest net buying amount for Yingfu Fund at HKD 16.74 billion, followed by Innovent Biologics at HKD 6.51 billion and Meituan-W at HKD 3.38 billion [1] Continuous Net Buying and Selling - Two stocks, namely SMIC and Innovent Biologics, experienced continuous net buying for over three days, with SMIC leading at a total net buying of HKD 59.43 billion and Innovent Biologics at HKD 17.83 billion [2] - The stocks with the highest net selling included Tencent Holdings, Xiaomi Group-W, and Alibaba-W, with total net selling amounts of HKD 22.53 billion, HKD 3.74 billion, and HKD 3.08 billion respectively [2] Summary of Active Stocks on July 2 - The following table summarizes the active stocks with their trading amounts, net buying amounts, and daily price changes: - Yingfu Fund: Trading Amount HKD 1689.30 million, Net Buying HKD 1674.46 million, Daily Change 0.49% - Innovent Biologics: Trading Amount HKD 1079.97 million, Net Buying HKD 651.12 million, Daily Change 1.15% - Meituan-W: Trading Amount HKD 2976.06 million, Net Buying HKD 338.09 million, Daily Change 0.56% - SMIC: Trading Amount HKD 3274.27 million, Net Buying HKD 317.79 million, Daily Change -2.57% - Chongqing Steel: Trading Amount HKD 3720.82 million, Net Buying HKD 144.80 million, Daily Change 91.11% - Xiaomi Group-W: Trading Amount HKD 4408.50 million, Net Selling HKD 36.95 million, Daily Change 0.33% - Tencent Holdings: Trading Amount HKD 3438.30 million, Net Selling HKD 62.96 million, Daily Change -0.30% - Alibaba-W: Trading Amount HKD 5576.67 million, Net Selling HKD 173.65 million, Daily Change -0.36% [2]

Group 1 - On July 2, 2025, Alibaba-W (09988), Chongqing Steel (01053), and Xiaomi Group-W (01810) were the top three companies by trading volume in the Southbound Stock Connect, with trading amounts of 3.17 billion, 2.93 billion, and 2.83 billion respectively [1] - In the Southbound Stock Connect for the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), Tencent Holdings (00700), and Xiaomi Group-W (01810) also ranked as the top three, with trading amounts of 2.41 billion, 1.59 billion, and 1.58 billion respectively [1] Group 2 - In the Southbound Stock Connect, the top ten active trading companies included Alibaba-W (09988) with a trading amount of 3.17 billion and a net buy of -788 million, Chongqing Steel (01053) with 2.93 billion and a net buy of 116 million, and Xiaomi Group-W (01810) with 2.83 billion and a net buy of -222 million [2] - The Southbound Stock Connect for Shenzhen-Hong Kong also featured Alibaba-W (09988) with a trading amount of 2.41 billion and a net buy of -945 million, Tencent Holdings (00700) with 1.59 billion and a net buy of -259 million, and Xiaomi Group-W (01810) with 1.58 billion and a net buy of -147 million [2]

Group 1: Core Insights - Recently, Innovent Biologics achieved two significant milestones: the approval of the new drug Ma Shidu Peptide Injection and the completion of a $550 million equity financing, equivalent to approximately 4 billion RMB, enhancing confidence in reaching the revenue target of 20 billion RMB by 2027 [1][5][6] - The Ma Shidu Peptide Injection, marketed as Xin Er Mei, is the world's first and only GCG/GLP-1 dual receptor agonist for weight loss, targeting the chronic metabolic disease market, which has a vast patient base in China [1][2][4] Group 2: Market Potential - The peak sales forecast for Ma Shidu Peptide is expected to exceed 5 billion RMB, driven by the large number of overweight and obese patients in China, estimated at around 500 million adults [2][4] - The drug has broad indications, including type 2 diabetes, metabolic-associated fatty liver disease, heart failure with preserved ejection fraction, and obstructive sleep apnea combined with obesity, supported by multiple ongoing Phase III clinical trials [2][3][4] Group 3: Competitive Landscape - Ma Shidu Peptide faces competition from established drugs like Novo Nordisk's Semaglutide and Eli Lilly's Tirzepatide, which have already been approved for diabetes and weight loss in China, with projected global sales of $29.3 billion and $16.4 billion respectively by 2024 [4][6] - Innovent is conducting head-to-head clinical trials against these competitors to establish a competitive edge in the market [4][6] Group 4: Global Expansion Strategy - Innovent completed a significant equity financing of approximately $550 million, the largest in the Hong Kong healthcare sector in the past four years, with 90% of the funds allocated for global R&D and facility expansion [5][6] - The company aims to leverage its innovative pipeline for global market penetration, similar to other biotech firms that have successfully expanded internationally [5][7] Group 5: Future Growth and R&D Strategy - Innovent's long-term strategy includes advancing at least five innovative pipelines to global multi-center Phase III registration studies by 2030, focusing on next-generation immunotherapy and antibody-drug conjugates (ADC) [9][12] - The dual upgrade strategy in oncology aims to address unmet needs in cancer treatment, with a systematic approach to tackle tumor heterogeneity and immune evasion [12][16] Group 6: Conclusion - The recent approvals and financing provide a strong impetus for Innovent Biologics to achieve its revenue target of 20 billion RMB by 2027, with a clear development path and potential for long-term growth driven by its innovative "IO+ADC" strategy [1][11][12]

Group 1: Market Overview - On July 2, the Hong Kong stock market saw a net inflow of 50.36 billion HKD from northbound trading, with 12.79 billion HKD from the Shanghai Stock Connect and 37.57 billion HKD from the Shenzhen Stock Connect [1] - The most bought stocks included the Tracker Fund of Hong Kong (02800), Innovent Biologics (01801), and Meituan-W (03690) [1] - The most sold stocks were Alibaba-W (09988), Tencent (00700), and Xiaomi Group-W (01810) [1] Group 2: Stock Performance - Alibaba-W had a buy amount of 11.91 billion HKD and a sell amount of 19.79 billion HKD, resulting in a net outflow of 7.88 billion HKD [2] - Xiaomi Group-W had a buy amount of 13.02 billion HKD and a sell amount of 15.25 billion HKD, leading to a net outflow of 2.22 billion HKD [2] - Tencent had a buy amount of 7.39 billion HKD and a sell amount of 11.10 billion HKD, resulting in a net outflow of 3.71 billion HKD [2] Group 3: Sector Insights - The Tracker Fund of Hong Kong (02800) received a net inflow of 16.74 billion HKD, with analysts suggesting that the current market conditions provide a favorable window for investment, particularly in the technology sector [5] - Innovent Biologics (01801) and 3SBio (01530) received net inflows of 6.51 billion HKD and 1.09 billion HKD, respectively, following new measures to support the development of innovative drugs [5] - Meituan-W (03690) saw a net inflow of 3.38 billion HKD, while Alibaba-W and Tencent experienced significant net outflows [6] Group 4: Company-Specific Developments - Chongqing Steel (01053) received a net inflow of 1.44 billion HKD amid rumors of production cuts in Tangshan, which could impact capacity utilization [6] - Pop Mart (09992) received a net inflow of 1.22 billion HKD after being recognized in Time magazine's list of the "100 Most Influential Companies" for 2025 [7] - Xiaomi's Yu7 model orders exceeded expectations, leading to an upward revision of shipment forecasts for 2025 to 2027 [8]

Investment Rating - The report maintains an investment rating of "Leading the Market-B" for the biopharmaceutical industry [1][11]. Core Insights - IBI363, a PD-1/IL-2α-bias dual antibody fusion protein developed by Innovent Biologics, shows significant survival benefits in clinical trials for immune-resistant NSCLC, colorectal cancer, and melanoma [3][4]. - The drug demonstrates a controllable safety profile, with the most common grade ≥3 treatment-related adverse events (TRAEs) being joint pain, rash, and anemia [3][4]. - IBI363 has received breakthrough therapy designation in China and fast track designation from the FDA in the United States [4]. Summary by Sections Market Performance - The biopharmaceutical industry has shown strong market performance over the past year, with significant advancements in innovative drug development [1]. Drug Evaluation - IBI363 has shown promising results in various cancers: - In squamous NSCLC, the median overall survival (mOS) reached 15.3 months with a 3 mg/kg dosage, showing a clinical objective response rate (cORR) of 36.7% and a disease control rate (DCR) of 90.0% [4]. - In EGFR wild-type NSCLC adenocarcinoma, mOS was 17.5 months with a 3 mg/kg dosage, achieving a cORR of 24.0% and a DCR of 76.0% [5]. - In colorectal cancer, mOS reached 16.1 months with IBI363 monotherapy, significantly exceeding standard treatment outcomes [6]. - In melanoma, the mPFS was 5.7 months, with a 12-month overall survival rate of 61.5% [7].

Core Viewpoint - The Hong Kong innovative drug sector has experienced significant growth in the first half of 2025, driven by policy support, industry catalysts, and market sentiment, leading to outstanding performance of actively managed equity funds focused on this sector [1][2]. Group 1: Fund Performance - Several actively managed funds, including Huatai-PineBridge Hong Kong Advantage Selection A, achieved returns exceeding 60%, with Huatai-PineBridge leading at 85.64% as of June 27 [1][2]. - The top holdings of these funds saw substantial gains, with Rongchang Bio rising 278% and other companies like Innovent Biologics and Kelun-Biotech also exceeding 100% in growth [1]. - ETFs tracking the Hong Kong pharmaceutical sector also performed well, with the top ETF, Huatai-PineBridge National Index Hong Kong Innovative Drugs ETF, seeing a net inflow of over 6 billion yuan, increasing its size from 653 million yuan to over 7.8 billion yuan [2]. Group 2: Market Dynamics - The innovative drug sector is currently in a high valuation range, with some institutions suggesting that short-term speculative trading may lead to profit-taking and potential stock price adjustments [3]. - The market has seen a resonance between market liquidity and industry logic, with multinational corporations (MNCs) driving significant business development (BD) in innovative drug companies [2][3]. - Recent policy measures announced on June 30 aim to support the high-quality development of innovative drugs, enhancing R&D support and facilitating market access [4]. Group 3: Future Outlook - The new policy framework is expected to enhance the certainty of R&D in innovative drugs and accelerate commercialization cycles, providing further support for sector valuations [4]. - Investment opportunities are anticipated in product-oriented companies, particularly those focusing on global market expansion and innovative breakthroughs [4][5]. - The Chinese innovative drug industry is at a critical turning point, with ADC and bispecific antibody technologies expected to capture significant market share in global immunotherapy, although caution is advised regarding competition and the role of AI in drug development [5].

Core Viewpoint - CICC maintains the profit forecast for Innovent Biologics (01801) at 472 million yuan for 2025 and 1.299 billion yuan for 2026, while upgrading the target price by 38.1% to 95.3 HKD, indicating a 21.6% upside potential from the current stock price [1] Company Updates - On June 27, the company announced that its cardiovascular and metabolic (CVM) product, Xinermet (Mastudutide injection), became the world's first GCG/GLP-1 dual receptor agonist weight loss drug approved for sale in China [2] - On June 30, the company held an oncology innovation R&D day, showcasing its strategies in next-generation immunotherapy (IO) and antibody-drug conjugates (ADC), along with clinical progress and data interpretation, including IBI363 (PD-1/IL-2) [2] Product Breakthrough - The approval of Mastudutide marks a breakthrough in the domestic GLP-1 receptor agonist weight loss sector. The III phase clinical trial GLORY-1 showed that treatment with 6 mg of Mastudutide for 48 weeks resulted in a weight loss of 14.84% from baseline, and in subjects with baseline liver fat content ≥10%, the average liver fat content decreased by 80.2% from baseline [3] Next-Generation Strategy - IBI363 is leading the company's next-generation "IO+ADC" strategy. Data presented at the 2025 American Society of Clinical Oncology (ASCO) meeting showed promising results for IBI363 in melanoma, IO-treated lung cancer, and colorectal cancer. The median overall survival (mOS) for the low-dose group in IO-treated squamous non-small cell lung cancer was 15.3 months, and 17.5 months for adenocarcinoma. The mOS for IBI363 in monotherapy for colorectal cancer was 16.1 months, with a significant survival event rate compared to the combination therapy with Bevacizumab [4] Internationalization Goals - The company aims to have five pipeline products enter global multi-center clinical III trials by 2030. The successful launches of major products like Teyuanzhu and Mastudutide in the CVM field, along with the anticipated approval of Pikangqibai, highlight the company's progress. The early pipeline, including IBI3030, also shows promise. IBI363 is expected to become a next-generation IO blockbuster, and the ADC platform continues to yield results [5]

Core Viewpoint - The approval of the new weight loss drug, Masitide (玛仕度肽), marks a significant advancement in the obesity treatment market, targeting long-term weight control for adults with obesity or overweight conditions [1][4]. Group 1: Product Efficacy - Clinical data indicates that after 20 weeks of treatment, patients can lose over 20% of their body weight, reduce liver fat content by over 80%, and decrease waist circumference by 11 cm, while also improving cardiovascular and metabolic indicators such as blood sugar, blood pressure, and liver enzyme levels [2][5]. - Masitide is the first and only dual receptor agonist approved for overweight and obesity indications globally, with unique mechanisms targeting both GLP-1 and GCG receptors, enhancing fat oxidation and energy expenditure [8][7]. Group 2: Market Potential - China has approximately 500 million individuals classified as overweight or obese, creating a substantial market opportunity for weight loss medications, with predictions that the GLP-1 weight loss drug market will exceed 15 billion by 2025 [5][6]. - The company anticipates that Masitide's sales could reach 7 billion in 2025 and 18 billion in 2026, with peak sales estimates ranging from 52 billion to 100 billion, supporting the goal of achieving 20 billion in revenue by 2027 [21]. Group 3: Pricing and Accessibility - The estimated monthly cost for patients using Masitide is between 1500 to 3000 yuan, depending on the dosage and frequency of injections [3][12]. - The company plans to set prices based on the product's value while considering the pricing of similar products and the payment capabilities of the domestic market [14]. Group 4: Broader Implications - The drug not only addresses weight loss but also has potential benefits for related health issues such as fatty liver disease, which affects over 200 million people in China, and may reduce the risks of liver cirrhosis and cancer [16][15]. - The company is also pursuing indications for type 2 diabetes treatment, with expectations for approval later in the year [16].

Investment Rating - The report assigns an "Outperform" rating for Innovent Biologics, indicating an expected total return over the next 12-18 months that exceeds the return of its relevant broad market benchmark [24]. Core Insights - The management's vision for 2030 is a significant highlight, aiming to position Innovent Biologics as a world-class biopharmaceutical company, with five product pipelines entering global multi-center Phase III clinical trials and two products planned for overseas launch [2][9]. - The development strategy for IBI363 (PD-1/IL-2α-bias bispecific antibody) is clearly defined, with expectations for proof-of-concept data in first-line indications for colorectal, gastric, and lung cancers by 2026 [3][10]. - The recent approval of Mazdumetor is expected to drive rapid sales growth, with projected revenues of 600 million yuan in 2025 and 1.8 billion yuan in 2026 [5][14]. - The non-oncology business is anticipated to match oncology revenue by 2027, driven by multiple product approvals and market expansions [6][15]. Summary by Sections Management Vision - The management reiterated its goal to become a top-tier biopharmaceutical company by 2030, with significant advancements in product pipelines and market presence [2][9]. Product Development - IBI363's clinical strategy focuses on addressing issues in Phase I, selecting representative tumors for Phase II, and advancing certain indications in Phase III, with a focus on colorectal, gastric, and lung cancers [3][10]. - The management emphasizes the importance of partnerships with firms that have strong oncology pipelines and commercialization capabilities [4][11]. Sales and Marketing Strategy - The marketing strategy for Mazdumetor includes a full-channel approach, targeting both in-hospital and out-of-hospital channels, with a focus on rapid sales expansion [5][14]. Revenue Outlook - The domestic non-oncology business is expected to significantly contribute to revenue growth, with projections of reaching 20 billion yuan by 2027 [6][15]. - The overseas business is projected to see revenue growth from 2027 to 2030, primarily driven by oncology products [6][16].