Investment Rating - The industry investment rating is "Overweight" [1] Core Views - The biopharmaceutical investment and financing environment has shown significant recovery since the second half of 2025, with a total financing amount of USD 30.32 billion from July to November 2025, representing a year-on-year increase of 30.90% [4] - The number of new drug IND applications stabilized in 2025, with approximately 1,897 applications from January to November, reflecting a year-on-year growth of about 7.91% [4] - The demand for CRO services has shown a clear turning point, and the report continues to recommend opportunities in the innovative drug industry chain (CXO + research services) for 2026 [4] Summary by Sections Industry Performance - The biopharmaceutical sector experienced a decline of 0.14% in the third week of December 2025, outperforming the CSI 300 index by 0.14 percentage points, ranking 22nd among 31 sub-industries [7][14] - The offline pharmacy sector saw the highest increase, rising by 5.59%, while the chemical preparation sector had the largest decline at 2.1% [18][22] Investment Opportunities - The report highlights the strong performance of leading CXO and research service companies, with many exceeding earnings expectations. Companies like WuXi AppTec and Tigermed have raised their earnings guidance for 2025 [5] - The report recommends a valuation switch opportunity for leading CXO and research service companies, given the continuous improvement in demand [5] Clinical Research Organizations (CRO) - There has been a notable improvement in orders for preclinical and clinical CROs, with expectations for significant improvements in financial statements for 2026 [6] - The report anticipates that the market demand will continue to focus on leading companies as the capacity of clinical CROs is expected to be streamlined [6] Monthly and Weekly Recommendations - The report recommends a monthly investment portfolio including companies such as Sanofi, Innovent Biologics, and others, focusing on innovative drug opportunities and valuation switch [8]

止跌企稳，高开高走后震荡上行，截止午盘恒生指数上涨0.65%。恒生医疗涨幅居前，恒生科技、互联 网、大消费等紧随其后；银行相对偏弱。 银行股相对偏弱，早盘始终维持在中轴上方窄幅盘整，截止午盘小涨0.26%。其中中国银行。农业银 行、招商银行。汇丰控股等股小幅上涨；渣打银行、中银香港等股小幅下跌。 内容只是个人观点，仅供参考，不作为投资依据！欢迎关注交流，互相学习、共同探讨！ 恒生医疗高开高走大涨2.67%，其中药明生物大涨6.48%，三生制药上涨3.7%，京东健康、信达生物、 药明康德、石药集团、中国生物等多股涨幅在2%上方。 恒生科技小幅高开后维持在高位盘整，截止午盘上涨1.67%。其中美团上涨2.27%，中芯国际、网易、 腾讯控股、百度集团等多股涨幅均在1%上方。 ...

Group 1 - The core viewpoint of the article highlights a general increase in the pharmaceutical outsourcing sector, with notable stock price rises for companies such as WuXi Biologics (6.11%), Kelun Pharmaceutical (5.52%), and others [1] - According to a report from Century Securities, the recent NDAA legislation has led to a reduction in geopolitical risks, positively impacting the industry [1] - In the first three quarters, the total amount of license-out agreements for innovative drugs in China reached a historical high, indicating a continuous improvement in the innovation drug sector [1] Group 2 - The CXO sector is experiencing a recovery in performance and new orders, with market attention shifting towards preclinical safety evaluation assets [1] - The CXO industry, as an upstream segment of the innovative drug supply chain, is expected to benefit from the enhanced competitiveness of domestic innovative drugs, leading to a rebound in industry prosperity [1] - The outlook for CXO is positive, with expectations for both performance and valuation recovery following a complete industry cycle [1]

Group 1 - The pharmaceutical outsourcing sector is experiencing a general increase, with notable stock price rises for companies such as WuXi Biologics (6.11%), Kelun Pharmaceutical (5.52%), and others [1] - A recent report from Century Securities indicates that the NDAA bill has been implemented, leading to a reduction in geopolitical risks [1] - In the first three quarters, the total amount of license-out agreements for innovative drugs in China reached a historical high, indicating a continuous improvement in the innovative drug industry [1] Group 2 - The performance and new orders for CXO companies are showing signs of improvement, with the market beginning to focus on preclinical safety evaluation assets [1] - CXO companies, as part of the upstream of the innovative drug industry chain, are expected to benefit from the enhanced competitiveness of domestic innovative drugs, leading to a recovery in industry prosperity [1] - The industry is anticipated to see a dual recovery in both performance and valuation for CXO companies [1]

Market Overview - US inflation slowdown supports interest rate cut expectations, while the Bank of Japan raised rates by 25 basis points, leading to a rise in Hong Kong's three major indices. The Hang Seng Index increased by 0.75% to 25,690.53 points, with a total turnover of HKD 221.186 billion. The Hang Seng China Enterprises Index rose by 0.68%, and the Hang Seng Tech Index increased by 1.12% [1] Blue Chip Performance - Shenzhou International (02313) led the decline among blue chips, falling by 3.18% to HKD 60.95, with a turnover of HKD 490 million. Despite exceeding revenue and profit expectations, its net profit dropped by 32% year-on-year due to declining profit margins and ongoing pressures in direct sales [2] - Other blue chips included WuXi Biologics (02269), which rose by 4.4%, and Li Auto-W (02015), which increased by 3.81% [2] Sector Highlights - Large tech stocks mostly rose, with Tencent, Kuaishou, and Meituan gaining over 1%. The L3-level autonomous driving sector saw significant activity, with stocks like Xiaopeng Motors rising over 7% [3] - The pharmaceutical sector rebounded significantly, with companies like Kelun Pharmaceutical (06821) rising by 10.42% and WuXi Biologics (02269) increasing by 4.4% [4] - Lithium stocks also saw gains, with Ganfeng Lithium (01772) up by 1.87% and Tianqi Lithium (09696) rising by 1.72% [4] New Listings - New stocks showed a clear divergence, with Zhihui Mining (02546) soaring by 90.69% to HKD 8.6, while Xidi Intelligent Driving (03881) fell by 13.69% to HKD 227 [7] Company Developments - CIMC Group (02039) saw a strong performance, rising by 15.47% to HKD 8.88 after announcing a buyback plan for H-shares [8] - Changfei Optical Fiber (06869) surged by 12.01% to HKD 51.75, driven by signs of recovery in the optical fiber market [9] - China Duty Free Group (01880) saw its A and H shares rise by 6.88% to HKD 70.7, with expectations of increased sales due to optimized offshore duty-free shopping policies [10] - China Tobacco Hong Kong (06055) rose by 6.68% to HKD 34.48, supported by new regulations aimed at strengthening electronic cigarette oversight [11]

Market Overview - The US CPI annual rate decline has led to a rise in US stocks, boosting risk market sentiment [1] - The Hang Seng Index opened higher and closed up 0.75%, with the Hang Seng China Enterprises Index and Hang Seng Tech Index rising by 0.68% and 1.12% respectively [1][2] Sector Performance - Major technology stocks saw collective gains, with Tencent up 1.49%, Kuaishou up 1.45%, and Meituan up 1.28% [4] - Pharmaceutical stocks were active, with WuXi AppTec and other related stocks rising [2] - Gaming stocks continued to rise, with MGM China leading with a 6.6% increase [2][5] - AI-driven demand boosted optical fiber and cable stocks, with Yangtze Optical Fiber rising 12% [2] - Automotive, wind power, education, photovoltaic, insurance, and Apple-related stocks also experienced gains [2] Notable Stock Movements - Xpeng Motors rose 7.65%, Horizon Robotics up 7.04%, and Li Auto up 3.81% [4][10] - Electronic cigarette stocks saw significant increases, with China Tobacco Hong Kong up 6.68% [5] - Chinese brokerage stocks rose, with China International Capital Corporation up over 4% [7] - Intelligent driving concept stocks surged, with Youjia Innovation up 31.22% [8] Weak Performers - Heavy machinery stocks faced declines, with China National Heavy Duty Truck Group down over 6% [13] - Gold and precious metal stocks were weak, with several companies experiencing declines of over 2% [16] - Oil stocks also fell, with China Petroleum & Chemical Corporation down 1.52% [15] Capital Flows - Southbound funds recorded a net purchase of HKD 3.371 billion, with net selling from Shanghai-Hong Kong Stock Connect and net buying from Shenzhen-Hong Kong Stock Connect [18] Market Outlook - CITIC Securities suggests that after a strong performance in September, Hong Kong stocks are undergoing a mid-term adjustment, with quality assets entering a high-value zone [18]

Group 1 - The Hang Seng Index rose by 0.65%, gaining 165 points to close at 25,663 points, while the Hang Seng Tech Index increased by 1.14%. The morning trading volume reached 97.5 billion HKD [1] - New listings in the Hong Kong stock market included Zhihui Mining (02546), which surged over 110% upon debut, and Xidi Zhijia (03881), which fell over 8% after its listing [1] - The U.S. Senate passed a revised version of the Biodefense Act as part of the National Defense Authorization Act for fiscal year 2026, leading to a significant rebound in pharmaceutical stocks, with WuXi Biologics (02269) rising over 6% and 3SBio (01530) increasing by 3.7% [1] Group 2 - HAP Pharmaceuticals-B (02142) saw a nearly 7% increase after signing a business development deal worth over 1 billion USD with Bristol-Myers Squibb [2] - China Duty Free Group (601888) (01880) rebounded nearly 7% after winning bids for two major duty-free projects at Shanghai airports, with market attention on the results of the Capital Airport tender [2] - Youjia Innovation (02431) surged over 12% as L3 large-scale deployment approaches, with the company having made forward-looking arrangements for L2+ and L4 [2] - Nine Dragons Paper (02689) rose over 3% as the industry leader announced a series of shutdown plans to support price and inventory levels before the Spring Festival [2] Group 3 - South Manganese (01091) increased by over 9% due to multiple factors driving the continuous rise in electrolytic manganese prices [3] Group 4 - Yangtze Optical Fibre (601869) (06869) rose over 10%, with a cumulative increase of over 30% in the past three days, driven by sustained demand for optical fibers and cables from AI [4] Group 5 - Ganwan (09890) increased by over 5% after issuing zero-coupon convertible bonds at a premium, raising 450 million HKD to enhance its "AI + gaming" strategy [5] Group 6 - Liqin Resources (02245) rose over 9% as Indonesia plans to significantly reduce its nickel ore production targets by 2026 [6] Group 7 - Shenzhou International (02313) fell over 3% as its major client Nike reported a 32% year-on-year decline in net profit for the second fiscal quarter [7]

Group 1 - The core viewpoint of the article highlights a rebound in two major sectors of Hong Kong stocks: internet and innovative pharmaceuticals, with the Hong Kong Stock Connect Technology ETF (159101.SZ) rising by 1.5% [1] - Key stocks such as WuXi Biologics increased by over 6%, and WuXi AppTec rose by over 4%, while Tencent, Meituan, and Alibaba experienced slight increases [1] - After three months of adjustment, the crowdedness in these two core sectors has returned to low levels, with recent catalysts for growth including Tencent's release of the mixed reality model and Baidu's Kunlun chip accelerating towards an IPO, projected to exceed 2 billion yuan in revenue by 2025 [1] Group 2 - The passing of the U.S. National Defense Authorization Act for fiscal year 2026 on December 18 is seen as beneficial for CXO companies like WuXi Biologics and WuXi AppTec, as the new version of the biosafety law does not specifically name any companies [1] - Improved relations between the two countries have also boosted market risk appetite [1] - The Hong Kong Stock Connect Technology ETF (159101.SZ) tracks the National Index for Hong Kong Stock Connect Technology, which has reduced exposure to consumer retail while increasing allocation to biopharmaceuticals and hardware equipment, allowing for greater index elasticity [1]

Group 1 - Hong Kong pharmaceutical stocks showed a significant rebound this morning, particularly in the CRO and innovative drug sectors [1] - Kelaiying (06821.HK) increased by 6.28%, reaching HKD 77 [1] - WuXi Biologics (02269.HK) rose by 6.11%, trading at HKD 34.72 [1] - Sangfor Pharmaceuticals (01530.HK) gained 5.04%, priced at HKD 26.68 [1] - Innovent Biologics (09969.HK) saw an increase of 4.25%, with shares at HKD 13.74 [1]

Group 1 - Pharmaceutical stocks showed a significant rebound today, particularly in the CRO and innovative drug sectors [1][3] - Companies such as Kelaiying (06821) saw an increase of 6.07%, trading at 76.85 HKD [1][3] - WuXi Biologics (02269) rose by 6.05%, reaching 34.70 HKD [1][3] - Sangfor Pharmaceuticals (01530) increased by 4.65%, priced at 26.58 HKD [1][3] - Innovent Biologics (09969) experienced a rise of 4.70%, trading at 13.80 HKD [1][3]