Investment Rating - The investment rating for the pharmaceutical industry is "Positive" (maintained) [4][54]. Core Viewpoints - The report highlights that the AD (Alzheimer's Disease) treatment sector is expected to see significant advancements, with a recommendation to focus on companies like Tonghua Jinma and Dongcheng Pharmaceutical [3][9]. - The report emphasizes the importance of innovation, international expansion, and the aging population as key themes driving the industry forward [22][43]. - The pharmaceutical index has shown a positive performance, with a 1.40% increase from June 9 to June 13, outperforming the CSI 300 index by 1.66% [5][22]. Summary by Sections 1. AD Treatment Developments - The report notes that Alzheimer's Disease (AD) is a major global health challenge, with 51.62 million cases worldwide in 2019, including 13.14 million in China [9][10]. - The innovative oral drug, Succinyl-8-hydroxy-aminoguanidine, developed by Tonghua Jinma, has shown promising results in clinical trials and is expected to be a significant player in the AD treatment market [5][21]. 2. Industry Perspectives - The report indicates that the pharmaceutical sector is transitioning from traditional growth drivers to innovative solutions, with a focus on domestic innovation and international market expansion [22][43]. - The aging population is driving demand for chronic disease treatments, and the report suggests that the healthcare payment system is evolving to support this growth [41][43]. 3. Market Performance - The report provides a detailed analysis of stock performance, noting that 218 stocks increased in value while 263 decreased during the reporting period [5][22]. - Specific stocks such as Yiming Pharmaceutical and Sai Sheng Pharmaceutical have shown significant gains, while others like Renmin Tongtai have experienced notable declines [25][26]. 4. Investment Recommendations - The report recommends focusing on innovative pharmaceutical companies and those with strong international expansion capabilities, such as Heng Rui Pharmaceutical and Keren Pharmaceutical [43][44]. - It also highlights the importance of investing in sectors related to aging and outpatient consumption, suggesting companies like Kunming Pharmaceutical and Yuyue Medical [44].

Investment Rating - The industry investment rating is "Overweight" (maintained) [5] Core Viewpoints - The report highlights the upcoming 85th Annual Scientific Sessions of the American Diabetes Association (ADA) from June 20-23, 2025, which is expected to showcase significant advancements in GLP-1 class drugs and weight management strategies [5][6] - The report emphasizes the increasing international recognition of China's innovations in the endocrine and metabolic fields, particularly in the GLP class drug sector, with notable achievements from companies like Innovent Biologics and Eli Lilly [7][8] - The report anticipates a substantial growth in China's GLP-1 weight loss drug market, projecting a market size exceeding 15 billion yuan by 2025, with penetration rates expected to rise from under 5% in 2023 to 18%-20% [8] Summary by Sections Recent Industry Performance - The industry has shown relative returns of 8.85% over the past month, 10.28% over the past three months, and 3.81% over the past year compared to the CSI 300 index [3] Investment Highlights - The report focuses on the catalysts from the ADA conference, particularly the advancements in GLP-1 class drugs, which are expected to drive investment opportunities [6][7] - Key companies mentioned include Eli Lilly, Novo Nordisk, and domestic firms like Boryung Pharmaceutical and Gan & Lee Pharmaceuticals, which are actively involved in GLP-1 drug development [7][8] Market Dynamics - The report notes the active business development transactions in the GLP class drug sector, indicating a high level of industry enthusiasm and potential for growth [7] - It also mentions the upcoming global diabetes-related conferences in 2025, which will further stimulate the market for GLP class drugs [8]

Investment Rating - The report maintains a "Buy" rating for Hansoh Pharmaceutical (03692) despite a year-to-date stock price increase of 53% [1] Core Insights - UBS believes that the stock price of Hansoh Pharmaceutical is still undervalued, raising the target price from HKD 24 to HKD 33.3 [1] - The positive outlook is driven by the company's R&D capabilities and revenue potential from collaboration projects, particularly the licensing agreements for BD HS-20094 and HS-10535 [1] - Earnings per share forecasts for Hansoh Pharmaceutical have been increased by 16.2%, 17.7%, and 21.3% for the years 2025 to 2027, with revenue forecasts adjusted upward by 6% to 12% [1] - The main growth drivers are expected to be Aumolertinib and BD, with projected sales for Aumolertinib reaching RMB 6 billion this year and potentially exceeding RMB 8 billion by 2029 [1]

Investment Rating - Investment Rating: Positive [2] Core Insights - The pharmaceutical and biotechnology industry index increased by 3.36%, ranking 6th among 31 primary industries, outperforming the CSI 300 index, which decreased by 0.21% [5][17] - The valuation of the pharmaceutical and biotechnology industry as of June 6, 2025, is 28.24x (TTM, excluding negative values), up from 27.60x in the previous period, indicating an upward trend but still below the average [5][23] - Notable sub-industry performance includes chemical preparations and other biological products, with increases of 5.77% and 4.68% respectively, while offline pharmacies saw a decline of 1.15% [5][17] Industry Review - The report highlights three major investment opportunities: 1) Companies with dual-antibody/multi-antibody technology platforms that have differentiated target design capabilities and clinical advancement efficiency are likely to attract international giants [9] 2) Areas with unmet clinical needs, such as advanced liver cancer and non-small cell lung cancer, are promising for dual-antibody therapy development [9] 3) Potential license-out candidates, as domestic innovative pharmaceutical companies continue to engage in global collaborations [9] Important Industry News - CDE launched the "Star Plan" to encourage the development of pediatric anti-cancer drugs, addressing significant unmet clinical needs in this area [7][32] - Alcon's dry eye medication "Tryptyr" received FDA approval, marking it as the first of its kind globally [39] - Hansoh Pharmaceutical's third-generation EGFR-TKI "Amivantamab" was approved in the UK for first-line treatment of NSCLC, becoming the first domestically developed EGFR-TKI approved overseas [42] - BMS and BioNTech entered a collaboration for the dual-antibody candidate BNT327, with an upfront payment of $1.5 billion and potential milestone payments of $7.6 billion [51] Company Dynamics - Stone Pharmaceutical is negotiating three potential deals totaling $5 billion, involving several products including EGFR ADCs [49] - BMS's "Rotecip" was approved for treating lower-risk myelodysplastic syndromes, marking a significant innovation in this therapeutic area [45] - AbbVie’s JAK inhibitor "Upadacitinib" was approved for treating giant cell arteritis, becoming the first approved treatment for this condition in China [48]

Group 1 - The report emphasizes the active overseas commercialization of innovative drugs, with several domestic innovative drugs presenting excellent data at the ASCO conference, highlighting ongoing business development (BD) opportunities and clinical progress of key pipelines [3][39]. - Key companies such as BeiGene, Innovent Biologics, and others are expected to achieve significant milestones, including BeiGene's projected non-GAAP operating profit of $45 million in 2024 and a positive cash flow in 2025 [3][4]. - The report notes that the Hong Kong pharmaceutical sector has shown strong performance, with the Hang Seng Healthcare Index rising approximately 42% year-to-date, driven by the successful execution of BD transactions and the internationalization of domestic innovative drugs [14][39]. Group 2 - The report outlines the financial forecasts for key companies, indicating that BeiGene's revenue is expected to grow from 36.69 billion HKD in 2025 to 44.36 billion HKD in 2026, with a significant increase in net profit from 1.25 billion HKD to 4.56 billion HKD [4]. - The innovative drug sector is projected to see a revenue increase of 30% year-on-year in 2024, with total revenue reaching 71.88 billion HKD, while the overall loss for innovative drug companies is expected to narrow by 29% [35][36]. - The report highlights the increasing number of license-out transactions, with 81 transactions in 2024 totaling $45 billion, reflecting a 28% year-on-year growth, and a notable deal between 3SBio and Pfizer involving a $1.25 billion upfront payment [43][44]. Group 3 - The report indicates that the pharmaceutical sector is undergoing a transformation, with leading companies like Hansoh Pharmaceutical and China National Pharmaceutical Group achieving revenue growth rates of 21% and 10% respectively in 2024 [35]. - The medical services sector is facing pressure due to the impact of healthcare insurance policies and macroeconomic conditions, which may affect growth in consumer medical services [39]. - The CXO sector is showing signs of improvement, with a focus on the recovery of orders, indicating a potential rebound in performance [39]. Group 4 - The report provides a comparative analysis of valuations, noting that the overall valuation of Hong Kong pharmaceuticals is lower than that of A-share and overseas pharmaceuticals, with a median PE of 15x for Hong Kong compared to 24.7x for A-share [12][14]. - The report highlights the significant performance disparity among sub-sectors, with innovative drugs and pharma benefiting from ongoing BD transactions and a favorable valuation correction, while medical services are under pressure [18][39]. - The report also mentions the increasing trend of dual-listed pharmaceutical companies, with the number rising from 5 in 2017 to 20 currently, indicating a growing interest in the Hong Kong market [23].

Group 1 - The report highlights the impact of trade tensions between the US and China, noting that after the US initiated tariff threats in March 2018, multiple high-level talks occurred, but the US frequently changed its stance, leading to a breakdown in negotiations and escalation of conflicts [2][29] - China's trade surplus has been increasing since 2020, with a projected total trade surplus of $1,105.3 billion by April 2025, compared to an average of $385.1 billion from 2018 to 2019 [2][29] - The report suggests that the domestic industrial production index is recovering, with specific sectors like methanol and polyester filament showing improvement, while others like Shandong refining and tires are declining [2][29] Group 2 - The report discusses the Chinese government's comprehensive financial policies aimed at stabilizing the market and expectations, including initiatives to boost the digital economy, with a target for the core digital economy to account for over 10% of GDP by 2025 [3] - The development of multimodal large models in technology is emphasized, with companies like ByteDance and Alibaba making significant advancements in AI capabilities [3] - The report indicates that the self-sufficiency strategy remains a long-term focus, driven by national policies and the need for domestic supply chain resilience, particularly in sectors heavily reliant on imports from the US [4][6] Group 3 - The report identifies key investment opportunities in sectors with low valuations, particularly in defense, pharmaceuticals, and electronics, while suggesting a focus on the rhythm of industry development [6] - The report notes that the semiconductor industry is expected to see continued growth, driven by advancements in AI and the release of new products, particularly in the context of AI glasses and storage solutions [21][22] - The report highlights the performance of the REITs market, with a focus on infrastructure projects and the increasing activity in the sector, indicating a positive outlook for future growth [32]

Investment Rating - The report maintains an investment rating of "Outperform" for the biopharmaceutical sector [7]. Core Insights - The PD-(L)1 monoclonal antibody market is vast, with multiple companies developing PD-1 class upgrade products, including PD-1/VEGF bispecific antibodies and PD-1/IL-2 bispecific antibodies. The IBI363 from Innovent Biologics is expected to be the next significant PD-1 upgrade product following the PD-1/VEGF bispecific antibody [2][21]. - IBI363 has shown excellent data in the treatment of wild-type NSCLC and colorectal cancer, indicating its potential to expand into first-line treatment markets based on its performance in the IO resistant market [2][22]. - The competitive landscape for PD-1/IL-2 bispecific antibodies is favorable for IBI363, as it is the only PD-1/IL-2α bispecific antibody currently in Phase II clinical trials, while most competitors are in earlier stages [3][25]. Summary by Sections Weekly New Drug Market Review - From June 2 to June 6, 2025, the top five companies in the new drug sector by stock performance were Junsheng Tai Pharmaceutical-B (24.29%), Zai Lab (23.28%), Innovent Biologics (18.08%), Maiwei Biopharma (17.72%), and Shenzhou Cell (17.24%). The bottom five were Deqi Pharmaceutical-B (-12.68%), JACOB-B (-11.90%), Heptares Therapeutics-B (-10.86%), CanSino Biologics-B (-10.75%), and WuXi AppTec-B (-8.54%) [1][17]. Weekly New Drug Industry Analysis - The report highlights the potential of IBI363 as a next-generation PD-1 upgrade product, with promising data presented at ASCO 2025. The drug is expected to target multiple tumor types and expand into first-line treatment markets [2][21]. Weekly New Drug Approval & Acceptance Status - This week, 20 new drug or new indication applications were approved in China, including drugs from Zai Lab and Shenzhen Xinlitai. Additionally, 11 new drug applications were accepted, including those from MSD and Eli Lilly [4][28]. Weekly New Drug Clinical Application Approval & Acceptance Status - There were 21 new drug clinical application approvals and 43 new drug clinical applications accepted in the domestic market this week [5].

Investment Rating - The report assigns an "Accumulate" rating for the company, marking it as the first coverage with a target price of HKD 29.50, compared to the current price of HKD 27.2 [5]. Core Viewpoints - The company is recognized as a leading innovation-driven pharmaceutical enterprise, focusing on oncology, anti-infection, central nervous system, metabolic diseases, and autoimmune diseases. It is projected to achieve a revenue of HKD 12.26 billion in 2024, representing a 21% year-on-year growth, and a net profit of HKD 4.372 billion, reflecting a 33% increase [1][5]. - The company has successfully launched multiple innovative drugs, with a strong pipeline that is expected to drive future growth. The sales of innovative drugs are anticipated to continue increasing, with a projected revenue of HKD 9.477 billion in 2024, marking a 38.1% year-on-year growth [16][24]. Summary by Sections 1. Innovation and R&D - The company has established a comprehensive R&D system, employing over 1,800 professionals and creating several national-level research institutions. It has been recognized as a key high-tech enterprise and a national technology innovation demonstration enterprise [14][26]. - The company has eight innovative drugs approved for market, including Amelotin (甲磺酸阿美替尼片) and Fluoromethylnitro (甲磺酸氟马替尼片), which are expected to contribute significantly to revenue growth [16][17]. 2. Market Performance - The sales of Amelotin, the first domestic third-generation EGFR TKI, are projected to grow rapidly, with a compound annual growth rate (CAGR) of 214% from 2020 to 2024, capturing approximately 28% of the total sales of third-generation EGFR TKIs by 2024 [2]. - The company has also seen significant sales growth in Fluoromethylnitro, with a 54% increase in 2023 and a projected 36% growth in 2024 [3]. 3. Future Growth Potential - The company has a robust pipeline with several innovative drugs in various stages of clinical trials, including HS-20089 and HS-20093, which have entered phase II and III trials, respectively [4]. - The company is expanding its market presence through collaborations, such as granting global exclusive licensing rights for HS-10535 to Merck, indicating strong potential for future revenue streams [4][5]. 4. Financial Projections - Revenue forecasts for 2025, 2026, and 2027 are projected at HKD 13.741 billion, HKD 15.567 billion, and HKD 17.374 billion, respectively, with net profits expected to reach HKD 4.746 billion, HKD 5.336 billion, and HKD 5.850 billion [5].

Investment Rating - The report assigns an "Accumulate" rating for the company, marking it as the first coverage with a target price of HKD 29.50, compared to the current price of HKD 27.2 [5]. Core Viewpoints - The company is recognized as a leading innovative pharmaceutical enterprise with a focus on oncology, anti-infection, central nervous system, metabolic diseases, and autoimmune diseases. It has shown robust performance with a projected revenue of HKD 12.26 billion for 2024, representing a 21% year-on-year growth, and a net profit of HKD 4.372 billion, reflecting a 33% increase [1][5]. - The company has successfully launched multiple innovative drugs, with significant sales growth in its key products, particularly in the oncology sector, which is expected to account for 66.24% of total revenue by 2024 [17][24]. Summary by Sections 1. Innovation and R&D - The company has established a comprehensive R&D system with over 1,800 professional researchers, focusing on drug discovery and clinical research. It has been recognized as a national high-tech enterprise and a national technology innovation demonstration enterprise [14][26]. - The company has eight innovative drugs approved for market, including Amelotin (甲磺酸阿美替尼片) and Fluoromethine (甲磺酸氟马替尼片), which have shown strong sales performance [16][17]. 2. Sales Performance - The sales of Amelotin are projected to grow at a compound annual growth rate (CAGR) of 214% from 2020 to 2024, capturing approximately 28% of the total sales for third-generation EGFR TKIs by 2024 [2]. - The sales of Fluoromethine increased by 54% in 2023 compared to the previous year, with a projected growth of 36% in 2024 [3]. 3. Future Growth Potential - The company has a robust pipeline with several innovative drugs in various stages of clinical trials, including HS-20089 and HS-20093, which have entered phase II and III trials, respectively [4]. - The company is expanding its market presence with global licensing agreements for its innovative drugs, indicating strong potential for future revenue growth [4][5]. 4. Financial Forecast - The revenue forecast for the company is set at HKD 13.741 billion, HKD 15.567 billion, and HKD 17.374 billion for the years 2025, 2026, and 2027, respectively, with net profits projected at HKD 4.746 billion, HKD 5.336 billion, and HKD 5.850 billion [5].

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]