Investment Highlights - Company is rated as outperforming the industry with a target price of HKD 430.00 for Innovent Biologics-B (09606) [1] - The company is an international platform innovator in antibody-drug conjugates (ADC), which are among the most promising and rapidly developing drug forms globally [1] - According to Frost & Sullivan, the global ADC market is estimated to be approximately USD 10.4 billion in 2023 and is projected to reach USD 115.1 billion by 2032 [1] Product Pipeline - The company plans to submit a listing application for DB-1303 (HER2 ADC) for endometrial cancer in the US and for breast cancer in China by 2025 [2] - DB-1311 (B7-H3 ADC) shows potential as a best-in-class candidate in prostate cancer, while DB-1310 (HER3 ADC) is expected to follow suit [2] - The company is leading in the exploration of TROP2 ADC and dual antibodies, pushing the frontiers of next-generation ADCs [2] Competitive Advantage - The company differentiates itself by emphasizing its validated platform as an innovator in the ADC field, rather than focusing solely on individual clinical pipelines [2] - The company has established four unique ADC technology platforms and has secured over USD 6 billion in total transaction value through collaborations with multinational pharmaceutical companies [1] Financial Projections - The company anticipates a net loss attributable to shareholders of HKD 25.1 billion in 2025 and HKD 4.3 billion in 2026 [2] - Based on DCF valuation, the reasonable market value is estimated at HKD 37.9 billion, corresponding to a target price of HKD 430, indicating a potential upside of 20.1% from the current stock price [2]

Group 1 - The core viewpoint of the report is that the company, InnoCare Pharma-B (09606), is rated as outperforming the industry, with a reasonable market value of HKD 37.9 billion and a target price of HKD 430, indicating a potential upside of 20.1% from the current stock price [1] - The ADC (Antibody-Drug Conjugate) market is one of the most promising and fastest-growing drug forms globally, with an estimated market size of approximately USD 10.4 billion in 2023, projected to reach USD 115.1 billion by 2032 [2] - InnoCare Pharma has established four unique ADC technology platforms and has secured licensing agreements with multinational pharmaceutical companies, with a total transaction value exceeding USD 6 billion [3] Group 2 - The first ADC is expected to submit a listing application in 2025, with notable pipelines including DB-1303 for endometrial cancer and breast cancer, DB-1311 showing potential in prostate cancer, and advancements in dual-antibody ADCs [4] - The report highlights a key difference from market sentiment, emphasizing the investment value of the company as a validated platform innovator in the ADC field, which may incubate more valuable pipelines in the long term [5]

Core Viewpoint - CICC initiates coverage on Immune-Onc Biologics-B (09606) with an "outperform" rating, estimating a fair market value of HKD 37.9 billion and a target price of HKD 43.0, indicating a 20.1% upside from the current stock price [1] Industry Overview - Antibody-drug conjugates (ADCs) are among the most promising and rapidly developing drug forms globally, with the ADC market projected to grow from approximately USD 10.4 billion in 2023 to USD 115.1 billion by 2032 [1] - The next generation of ADCs is continuously exploring molecular design and target optimization, with potential applications expanding from oncology to autoimmune diseases [1] Company Highlights - Immune-Onc Biologics has established four distinctive ADC technology platforms and has secured licensing agreements with multinational pharmaceutical companies such as BioNTech, BeiGene, Avenzo, and GlaxoSmithKline, with a total transaction value exceeding USD 6 billion [2] - The company's global collaborative R&D is expected to enhance its innovative platform, driving a "flywheel effect" for ADC innovation [2] Pipeline and Development - The first ADC is anticipated to submit a market application in 2025, with DB-1303 (HER2 ADC) targeting endometrial cancer in the U.S. and breast cancer in China [3] - DB-1311 (B7-H3 ADC) shows potential as a best-in-class candidate in prostate cancer, while DB-1310 (HER3 ADC) is expected to follow closely; DB-1305 (TROP2 ADC) and dual-antibody combinations are leading in global exploration [3] Market Differentiation - The market tends to evaluate companies based on individual clinical pipeline valuations, while CICC emphasizes the investment value of Immune-Onc Biologics as a validated platform innovator in the ADC field, suggesting that a strong platform may incubate more valuable pipelines in the long term [4] - Potential catalysts include the U.S. and China market applications for DB-1303 and the initiation of clinical registration for DB-1311 [4]

Core Insights - The article highlights significant changes in the stock holdings of various companies under the Hong Kong Stock Connect program, indicating shifts in investor sentiment and potential investment opportunities. Group 1: Stock Increases - Canggang Railway (02169) saw the largest increase in stock holdings, rising by 10.72% to a total holding of 33.06% [1][2] - Goldwind Technology (02208) experienced a 1.17% increase, bringing its holding to 48.64% [1][2] - Zhongchu Innovation (03931) had a 1.02% increase, resulting in a holding of 14.69% [1][2] - The top three companies with the highest increases over the last five trading days were Dazhong Public Utilities (01635) with a 26.45% increase, Canggang Railway (02169) with a 21.07% increase, and Shankao Holdings (00412) with a 12.67% increase [1][3] Group 2: Stock Decreases - Shandong Molong (00568) recorded the largest decrease in stock holdings, dropping by 1.69% to 55.70% [1][2] - Jinli Permanent Magnet (06680) saw a decrease of 1.65%, resulting in a holding of 22.36% [1][2] - Yihua Tong (02402) experienced a 0.89% decrease, bringing its holding to 19.98% [1][2] - Over the last five trading days, the largest decreases were noted for Dongfang Electric (01072) with a 5.93% decrease, Yihua Tong (02402) with a 4.16% decrease, and Ocean Park (02255) with a 2.54% decrease [1][3] Group 3: Long-term Trends - Over the past 20 days, Dazhong Public Utilities (01635) had the highest increase of 27.37%, reaching a holding of 60.02% [4] - Canggang Railway (02169) also saw a significant increase of 21.39%, maintaining a holding of 33.06% [4] - Longfei Optical Fiber and Cable (06869) increased by 17.15%, achieving a holding of 71.17% [4]

Group 1: Market Overview - The Hang Seng Healthcare Index (HSCICH) decreased by 2.76% during the week, while the Hong Kong Innovation Drug ETF (513120) fell by 1.60% [4] - The pharmaceutical and biotechnology index dropped by 1.69%, underperforming the Shanghai Composite Index by 1.04 percentage points [4] Group 2: Company Developments - Nanjing Inpai Pharmaceutical Co., Ltd. submitted a listing application to the Hong Kong Stock Exchange, reporting a net loss of 129 million yuan in the first half of the year [5][6] - Inpai's core product, Senapali, was approved for marketing in China as a first-line maintenance therapy for ovarian cancer, applicable to all populations [6] - Inpai's revenue projections for 2023, 2024, and the first half of 2025 are 235 million yuan, 34 million yuan, and 25 million yuan respectively, with net losses of 20 million yuan, 255 million yuan, and 129 million yuan [6][7] Group 3: Clinical Trials and Innovations - The first subcutaneous antibody-drug conjugate (ADC) for advanced non-small cell lung cancer has entered Phase II clinical trials [8][16] - JSKN033, a subcutaneous ADC, aims to simplify administration time and reduce risks associated with intravenous delivery [18] - The National Medical Products Administration disclosed 117 new clinical trial registrations, with 29 in Phase II or higher, focusing on oncology and autoimmune diseases [8] Group 4: Stock Performance and Market Sentiment - Yimeng Bio-B experienced a significant decline, attributed to overall adjustments in the innovation drug sector and the upcoming lock-up expiration for cornerstone investors [12][13] - Yimeng Bio-B's stock price has seen a 30% drop from its peak, despite being up approximately 279% since its IPO [13] - Analysts from GF Securities and Morgan Stanley have set target prices for Yimeng Bio-B at 574.28 HKD and 766 HKD per share, respectively, citing its leading ADC platform and partnerships with global firms [13][15]

Summary of the Conference Call for Ying'en Bio Company Overview - Ying'en Bio has developed a highly differentiated next-generation product pipeline with 12 self-developed drug candidates, 7 of which have entered clinical stages, and has conducted multiple clinical trials in over 230 clinical centers across 17 countries, enrolling more than 2,000 patients, demonstrating strong R&D capabilities and clinical translation ability [2][4][19] Core Technologies and Platforms - The company operates four core technology platforms: Ditec, Diback, Dibmac, and Dupixent, focusing on different types of ADC (Antibody-Drug Conjugate) drug development, significantly enhancing product R&D efficiency and accelerating pipeline advancement [2][4][19] - Ditec platform has 5 clinical assets, Dibmac has a first-in-class ADC for autoimmune diseases, and DIBIAC has two clinical-stage pipelines [2][4] Strategic Collaborations - Ying'en Bio has established global strategic collaborations with several companies, including Seagen, Biotech, and BeiGene, with total agreements exceeding $3 billion, accelerating international expansion [2][5][19] - Notable collaborations include a partnership with Seagen for multiple ADC projects worth at least $414 million and a $1.76 billion agreement with Biotech [5] Market Trends - The global ADC market is rapidly growing, expected to exceed $13 billion in 2024, with a nearly 30% year-on-year increase. The domestic market is projected to reach $9.5 billion by 2030, with a compound annual growth rate (CAGR) of approximately 58% [2][7] Clinical Development Highlights - The core project 1,311 (B7H3-targeted ADC) has shown significant progress in treating solid tumors, with an overall objective response rate (ORR) of 56% and a disease control rate (DCR) of 89% in advanced metastatic small cell lung cancer patients [3][10] - The HER2-targeted ADC drug 1,303 has entered multiple clinical phase III trials, showing an ORR of 58.8% and a DCR of 94.1% in HER2-positive endometrial cancer [3][12][13] Future Pipeline and Innovations - The company is also focusing on innovative pipelines such as B7H3 PD-L1 dual antibody ADC and a novel humanized HER3 antibody ADC, which are currently under research and show potential for breakthroughs in oncology [14][15] - DB2,304, a potential first-in-class ADC for autoimmune diseases, is in phase I clinical trials, targeting systemic lupus erythematosus and skin lupus [17] Financial Outlook - Ying'en Bio anticipates revenue primarily from licensing income, projecting revenues of 750 million yuan in 2025, 770 million yuan in 2026, and 920 million yuan in 2027 [19] - The company is currently in an investment phase, with its four R&D platforms actively progressing towards potential global first-in-class products [19]

Group 1 - The core point of the article highlights that the total market capitalization of Chinese biotech stocks listed in Hong Kong has increased by 154% year-to-date, significantly outperforming the Hang Seng Index's 34% rise, indicating a major shift in market recognition of local pharmaceutical companies' innovation capabilities [1] - The report anticipates that the Federal Reserve's accelerated interest rate cuts will enhance risk appetite, directing funds towards growth sectors such as Chinese biotechnology [1] - However, the performance of individual stocks is expected to depend on company fundamentals, including commercialization execution and innovation research progress [1] Group 2 - The report expresses optimism for companies with short-term catalysts, specifically naming Kangfang Biotech (09926), Nuo Cheng Jian Hua (09969), and others as potential beneficiaries [1] - Additionally, it assigns an "outperform" rating to Weisheng Pharmaceutical-B (02561) and Zai Lab (09688) [1]

Group 1 - The total market capitalization of Chinese biotech stocks listed in Hong Kong has increased by 154% year-to-date, significantly outperforming the Hang Seng Index's 34% rise, indicating a major shift in market recognition of local pharmaceutical companies' innovation capabilities [1] - The expectation of the Federal Reserve accelerating interest rate cuts is anticipated to boost risk appetite, directing funds towards growth sectors such as Chinese biotech [1] - Individual stock performance will still depend on company fundamentals, including commercialization execution and innovation research progress [1] Group 2 - Companies with short-term catalysts that are favored include Kangfang Biotech (09926), Innovent Biologics (09969), Huyou-B (02256), Sinopharm (01801), and Eucure Biopharma-B (09606) [1] - Morgan Stanley has given "outperform" ratings to Weisheng Pharmaceutical-B (02561) and Zai Lab (09688) [1]

Core Viewpoint - The Hong Kong Stock Connect Innovation Drug ETF (520880) is experiencing volatility, with a recent trend of price fluctuations and a potential influx of buying interest as the market adjusts [1][3]. Group 1: Market Performance - The ETF has seen a decline in its constituent stocks, with only three out of 37 companies showing slight gains, while major stocks like InnoCare Pharma and Innovent Biologics have dropped significantly [3]. - The ETF has attracted over 670 million yuan in inflows over the past 13 days, indicating strong investor interest despite market fluctuations [4]. - The ETF's index has shown a year-to-date increase of 119.75% before recent adjustments, outperforming other innovation drug indices [6]. Group 2: Industry Insights - The ETF manager attributes the recent adjustments to multiple factors, including a lack of major business development catalysts and ongoing regulatory concerns from the Trump administration regarding Chinese innovation drugs [3]. - The manager emphasizes the importance of maintaining focus on the biopharmaceutical sector, suggesting that current market corrections may present buying opportunities for high-quality innovation drug companies [3]. - The ETF has undergone a "purification" process, removing CXO companies and focusing solely on innovation drug research and development, which is expected to enhance its performance in future market rallies [5][6].

Core Viewpoint - The Trump administration is drafting an executive order that will impose three major restrictions on commercial transactions involving Chinese innovative drug patents or rights, focusing on national security reviews by the Committee on Foreign Investment in the United States (CFIUS) [1][2]. Summary by Sections Executive Order Details - The draft includes three main provisions: 1. Inclusion of Chinese innovative drug BD transactions in the CFIUS mandatory review list, ending the previous "low-risk automatic exemption" practice [2]. 2. FDA will implement "racial sensitivity supplementary reviews" for drugs relying on Chinese clinical data, requiring at least 20% comparative data from non-Asian populations [2]. 3. Establishment of a "key drug domestic production fund" to provide production subsidies for 15 categories of drugs, including antibiotics and acetaminophen, while implementing a "domestic priority" principle in federal procurement [2]. Market Reaction - The market reacted swiftly to the policy risks, with the Hong Kong innovative drug index (HK1105) dropping 3.82% on September 11, 2025, and the A-share innovative drug sector (BK1106) declining 2.17%, with over 80% of stocks in the sector experiencing pullbacks [3]. - The following day, the indices showed signs of recovery, indicating investors' responses to policy uncertainties and rational corrections [3]. Globalization Trends - Despite the geopolitical risks, the trend of Chinese innovative drugs going global remains intact, with total license-out transactions to Europe and the U.S. reaching $9.43 billion as of September 2025 [3]. - Major transactions include a $950 million licensing deal between BeiGene and Royalty Pharma, and a $6 billion global licensing agreement between 3SBio and Pfizer, highlighting a shift towards milestone payments and regional licensing [3]. Industry Challenges - The domestic market faces challenges, with annual growth in medical insurance fund spending (approximately 12%) lagging behind the growth in innovative drug R&D investment (approximately 25%) [4]. - The average reduction in medical negotiations remains high at 54%, and commercial health insurance coverage for innovative drugs is below 15%, creating a supply-demand imbalance that necessitates going global [4]. Risk Resilience Assessment - Goldman Sachs has categorized Chinese innovative drug companies into three risk resilience tiers based on their sensitivity to policy changes and operational capabilities [4][5]. - Companies with mature global layouts exhibit the strongest resilience, while those heavily reliant on domestic markets show the weakest resilience [5][10]. Strategic Defense Framework - A three-dimensional defense system is proposed to address risks associated with the executive order, focusing on transaction review, data compliance, and supply chain security [13]. - Strategies include conducting national security risk pre-assessments for transactions over $50 million and establishing partnerships with U.S. law firms to navigate regulatory challenges [14][15]. Conclusion - The construction of a quantifiable "risk resilience index" is essential for Chinese innovative drugs in the global 2.0 era, emphasizing the need for companies to embed policy hedging clauses in transaction structures and consider racial diversity data in clinical stages [23].