Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative return of over 20% within the next six months [6][18]. Core Insights - The company reported a revenue of 27.98 billion yuan for 2024, representing a year-on-year growth of 22.6%, and a net profit attributable to shareholders of 6.34 billion yuan, up 47.3% year-on-year [1]. - For Q1 2025, the company achieved a revenue of 7.21 billion yuan, a 20.14% increase year-on-year, with a net profit of 1.87 billion yuan, reflecting a 36.9% growth [1][2]. - The company is accelerating its internationalization efforts and has a robust pipeline of innovative drugs expected to drive future growth [3][4]. Financial Performance - In 2024, the sales expense was 8.34 billion yuan, with a sales expense ratio of 29.79%, down 3.4 percentage points year-on-year. R&D expenses were 6.58 billion yuan, with a ratio of 23.52%, up 1.8 percentage points year-on-year [1]. - The company plans to increase its R&D investment to 8.23 billion yuan in 2024, a 33.8% increase compared to 2023 [1]. - The projected revenues for 2025-2027 are 31.34 billion, 35.67 billion, and 40.84 billion yuan, respectively, with net profits expected to reach 7.01 billion, 8.05 billion, and 9.43 billion yuan [5][11]. Product Pipeline and Market Position - The innovative drug revenue reached 13.89 billion yuan in 2024, a 31% increase year-on-year. The company anticipates a cumulative revenue target of 130 billion, 295 billion, and 503 billion yuan for 2024-2026 [3]. - The company has a strong product matrix in oncology, metabolism and cardiovascular, immunology and respiratory, and neuroscience, with significant ongoing projects and partnerships [4]. - Recent licensing agreements, such as the one with MSD for the HRS-5346 project, highlight the company's strategic focus on global collaborations, with potential total transaction value of approximately 14 billion USD [4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative return of over 20% within the next six months [6][18]. Core Insights - The company reported a revenue of 27.98 billion yuan for 2024, representing a year-on-year growth of 22.6%, and a net profit attributable to shareholders of 6.34 billion yuan, up 47.3% year-on-year [1]. - For Q1 2025, the company achieved a revenue of 7.21 billion yuan, a 20.14% increase year-on-year, with a net profit of 1.87 billion yuan, reflecting a 36.9% growth [1][2]. - The company is accelerating its internationalization efforts and has a robust pipeline of innovative drugs expected to drive future growth [3][4]. Financial Performance - In 2024, the sales expense was 8.34 billion yuan, with a sales expense ratio of 29.79%, down 3.4 percentage points year-on-year. R&D expenses were 6.58 billion yuan, with a ratio of 23.52%, up 1.8 percentage points year-on-year [1]. - The company plans to increase its R&D investment to 8.23 billion yuan in 2024, a 33.8% increase compared to 2023 [1]. - The projected revenues for 2025-2027 are 31.34 billion, 35.67 billion, and 40.84 billion yuan, respectively, with net profits expected to reach 7.01 billion, 8.05 billion, and 9.43 billion yuan [5][11]. Product Pipeline and Market Position - The innovative drug revenue reached 13.89 billion yuan in 2024, marking a 31% year-on-year increase. The company anticipates a cumulative revenue target of 130 billion, 295 billion, and 503 billion yuan for 2024-2026 [3]. - The company has a strong product matrix in oncology, metabolism and cardiovascular, immunology and respiratory, and neuroscience, with significant ongoing projects and partnerships [4]. - Recent licensing agreements, such as the deal with MSD for the Lp(a) oral small molecule project, highlight the company's strategic focus on global partnerships and revenue generation [4]. Valuation Metrics - The company's earnings per share (EPS) are projected to be 0.99 yuan in 2024, increasing to 1.10 yuan in 2025 and 1.26 yuan in 2026 [11][13]. - The price-to-earnings (P/E) ratio is expected to decrease from 54.21 in 2024 to 49.00 in 2025, indicating improving valuation as earnings grow [11][13].

Core Viewpoint - The article provides a comprehensive overview of the fundraising, investment, and merger activities in the Chinese market, highlighting significant transactions and trends in various sectors, particularly in energy, technology, and healthcare [1][6][22]. Fundraising Summary - A total of 217 fundraising events were recorded this week, amounting to 119.314 billion RMB. The largest fundraising event was the Beijing Zhongguancun Science City Phase III Technology Growth Equity Investment Partnership, which raised 10 billion RMB [1][2]. - The cumulative number of registered private equity fund managers this year is 35, with a total of 1,692 funds registered, amounting to 1,063.716 billion RMB [2]. Investment Summary - There were 78 investment events this week, with disclosed amounts totaling 28.688 billion RMB. A notable investment was made in CATL (Contemporary Amperex Technology Co., Limited) amounting to 2.628 billion USD [6][12]. - The investment landscape shows a strong focus on sectors such as materials, healthcare, and technology, with various companies receiving significant funding [9][10]. Merger and Acquisition Summary - This week saw 27 M&A events with a disclosed transaction value of 6.985 billion RMB. The largest transaction involved China Water Investment Group acquiring a 51% stake in Xinjiang Changyuan Water Group for 2.304 billion RMB [22][26]. - The M&A activities reflect a trend towards consolidation in sectors like water treatment, technology, and healthcare, indicating strategic moves by companies to enhance their market positions [22][26]. Listing Summary - Four companies went public this week, raising significant capital: Tai Li Technology raised 462 million RMB, Weigao Blood Purification raised 1.09 billion RMB, CATL raised 31.006 billion HKD, and Heng Rui Pharmaceutical raised 9.89 billion HKD [25][26]. - The listings indicate a robust interest in sectors such as materials and healthcare, showcasing investor confidence in these industries [25][26].

Investment Rating - The industry investment rating is "Overweight" (maintained) [1] Core Viewpoints - The non-bank financial sector is expected to benefit from the expansion of the Hong Kong stock market and the introduction of floating management fee products, which will enhance trading activity [3][4] - The recent decline in LPR and deposit rates is anticipated to lower the cost of liabilities for the insurance sector, potentially leading to a decrease in the preset interest rates for insurance products [5] Summary by Sections Industry Trends - The non-bank financial sector is projected to outperform the overall market, with a focus on the positive impact of the Hong Kong stock market's asset expansion and the introduction of new fund products [3][4] Market Activity - The average daily trading volume for stock funds decreased by 8% week-on-week, while the newly established stock and mixed funds saw a 100% increase in scale [4] Regulatory Environment - The China Securities Regulatory Commission (CSRC) is committed to optimizing the listing environment for technology companies, which is expected to support the return of quality red-chip technology firms to the domestic market [3] Recommended and Beneficiary Stocks - Recommended stocks include Jiangsu Jinzhong, Hong Kong Exchanges and Clearing, and China Pacific Insurance [6] - Beneficiary stocks include Guosen Securities, Jiufang Zhitu Holdings, and China Galaxy Securities [6]

证券研究报告 | 金融工程 2025 年 05 月 24 日 刚需+出海+历史低位，多重因素凸显制药价值 ——华宝中证制药 ETF 投资价值分析 随着保健意识的提升及国内人口老龄化趋势的发展，药品作为人们生活中的刚 性需求，其市场需求量日益增长。从供给端来看，原研药专利集中到期，创新 药频获出海订单，中药受政策大力扶持，各细分领域药企均迎来发展机遇。时 逢相关标的位于历史的价格低位，药品制造业显示出一定的投资机会。华宝中 证制药 ETF（认购代码：562053.OF）通过紧密跟踪中证制药指数，一键式配 置制药行业优质上市企业，值得投资者关注。 任瞳 S1090519080004 rentong@cmschina.com.cn ❑ 风险提示：本报告仅作为投资参考，基金产品过往业绩并不预示其未来表 现，亦不构成投资收益的保证或投资建议，新发基金无历史业绩可参考。 敬请阅读末页的重要说明 专题报告 ❑ 在新兴市场经济快速发展和各国医疗保障制度的逐渐完整之下，全球医药 市场规模仍旧维持着稳定增长态势。而据统计，我国的人均药品用量仍远 低于世界发达国家水平，国内药品用量的需求增长仍然具有较大的空间。 ❑ 在供给端，各细 ...

Group 1: Recent IPOs - CATL, a lithium battery giant from Fujian, officially listed on the Hong Kong Stock Exchange, raising approximately HKD 35.657 billion with a market capitalization of HKD 1.47 trillion [1] - Zhi Yi Construction, a construction service provider from Hong Kong, successfully listed on NASDAQ, raising about USD 15 million with a market capitalization of USD 6.218 million [2] - Heng Rui Medicine, an innovative pharmaceutical company from Jiangsu, listed on the Hong Kong Stock Exchange, raising approximately HKD 9.89 billion with a market capitalization of HKD 381 billion [3] Group 2: Companies Filing for IPO - Wo De Tong, a cross-border logistics service provider from Wuhan, submitted an IPO application to the SEC for a NASDAQ listing [4] - Zi Yun Dong Fang, a consulting company from Hong Kong, filed for an IPO with the SEC, aiming to raise about USD 8 million [5] - Jin Dian Technology, a toy manufacturer from Hong Kong, submitted an IPO application to the SEC, planning to raise between USD 8 million and USD 10 million [6] - De Jun Construction, a civil engineering subcontractor from Hong Kong, filed for an IPO with the SEC, aiming to raise approximately USD 7 million [7] - Ultra High Point, an IT service company from Hong Kong, submitted an IPO application to the SEC, planning to raise about USD 10 million [8] - Kuai Lu Technology, a green travel technology service provider from Shandong, filed for an IPO on the Hong Kong Stock Exchange [9] - Fuwai Group, a life insurance company from Hong Kong, submitted an IPO application to the Hong Kong Stock Exchange [10] - Le Zi Tian Cheng, an IP toy company from Beijing, filed for an IPO on the Hong Kong Stock Exchange [11] - Ju Shui Tan, an e-commerce SaaS ERP provider from Shanghai, submitted an IPO application to the Hong Kong Stock Exchange [12] - Sany Heavy Industry, a leading engineering machinery company from Beijing, filed for an IPO on the Hong Kong Stock Exchange [13] Group 3: Upcoming IPOs - Ji Hong Co., a provider of paper packaging solutions, is set to offer 67.91 million shares, aiming to raise approximately HKD 617 million, with listing expected on May 27 [14] - Pai Ge Biotechnology, focused on chronic disease therapies, plans to offer 19.2835 million shares, aiming to raise about HKD 301 million, with listing expected on May 27 [15] - Shou Hui Technology, an online life insurance intermediary service provider, plans to offer 24.3584 million shares, aiming to raise approximately HKD 194 million, with listing expected on May 30 [16] Group 4: Regulatory Updates - The China Securities Regulatory Commission announced new regulations for major asset restructuring of listed companies, aimed at simplifying review processes and enhancing market confidence [17]

Group 1: Market Performance and Trends - Heng Rui Pharmaceutical, a leading innovative drug company, debuted on the Hong Kong Stock Exchange with an opening day increase of over 30%, reflecting strong market interest in the innovative drug sector [2] - The Hang Seng Healthcare Index has shown a cumulative increase of 31.8% as of May 23, 2025, significantly outperforming the Hang Seng Index during the same period, indicating the attractiveness of the healthcare sector in the Hong Kong market [4] Group 2: Institutional Investment Activity - Seven new Hong Kong Stock Connect thematic funds were submitted for approval, focusing on popular sectors such as innovative drugs, technology, and automobiles, demonstrating institutional investors' ongoing interest in structural opportunities in the Hong Kong market [3] - Eight additional funds, including ETFs focused on consumption and dividends, have been accepted, reflecting a broad interest in various themes within the Hong Kong market [3] Group 3: Innovation and Technology - The upcoming ASCO annual meeting is expected to catalyze the innovative drug sector, with many companies revealing significant clinical and research data [5] - The emergence of the open-source large model DeepSeek-R1 is anticipated to lower training costs in AI, potentially reshaping the value distribution within the AI industry [6] Group 4: Automotive Sector Developments - The penetration rate of domestic brands in the passenger car market has increased from over 30% to over 60% since 2020, indicating a rapid enhancement in the competitiveness of Chinese car manufacturers [7] - Over 20 domestic and international car manufacturers are entering the humanoid robot field, suggesting a trend of cross-industry innovation between automotive and robotics [7] Group 5: Consumer Market Dynamics - The Hong Kong consumer market is characterized by service and emotional consumption, contrasting with the traditional essential consumption focus seen in the A-share market [8] - The Z generation is driving emotional consumption and the "self-pleasing economy," supporting the growth of high-end brands that cater to emotional needs [8]

Market Overview - On May 23, the A-share market showed strong performance before noon but retreated in the afternoon, with the Shanghai Composite Index down 0.94% to 3348.37 points, the Shenzhen Component Index down 0.85% to 10132.41 points, and the ChiNext Index down 1.18% to 2021.50 points [2] - The total market turnover was 118.26 billion yuan, an increase of 42.9 billion yuan compared to the previous trading day [2] - Leading sectors included pharmaceuticals, automotive supply chains, and controllable nuclear fusion, while previously popular micro-cap stocks continued to adjust [2] Pharmaceutical Sector - The pharmaceutical sector experienced a strong surge, with leading innovative drug company Heng Rui Pharmaceutical listing on the Hong Kong Stock Exchange and seeing its stock price rise over 25%, boosting the entire innovative drug industry chain [3] - A-share pharmaceutical stocks rose against the trend, with companies like Hai Chen Pharmaceutical and Zhong Sheng Pharmaceutical hitting the daily limit, while Hua Sen Pharmaceutical and Cheng Da Pharmaceutical also saw gains [3] - Multiple innovative drug companies announced they would showcase their research results at the 2025 American Society of Clinical Oncology (ASCO) annual meeting from May 30 to June 3 [3] - The market's expectations for domestic innovative drugs going global were heightened following the news of a dual-antibody new drug licensing collaboration between Sanofi and Pfizer [3] - According to NextPharma, Chinese pharmaceutical companies completed 41 overseas licensing transactions in Q1 2025, totaling 36.9 billion USD, nearing the total for the entire year of 2023 [3] - From 2015 to 2024, China ranked first globally in the cumulative number of original innovative drugs developed [4] - Zhonghang Securities noted that the innovative drug industry is undergoing profound changes, with companies enhancing their core advantages and transitioning from followers to significant players in international competition [3] Micro-Cap Stocks - Micro-cap stocks initially performed well but began to adjust from mid-week, with high-profile stocks like Nanjing Port and Langsha experiencing significant fluctuations [5] - Wangzi New Materials gained attention from active market funds, achieving a limit-up on May 23 and recording five consecutive trading days of gains, effectively doubling in value [5] - According to Founder Securities, the dominance of micro-cap stocks has been a notable feature of the A-share market this year, with strong mean reversion properties observed in small-cap styles [5] - The outlook for the market suggests that the trend favoring micro-cap stocks may continue, supported by factors such as a stable capital market, ongoing economic transformation, and sustained liquidity [5]

Group 1 - The Hong Kong IPO market is becoming increasingly active, with 25 companies listed as of May 23, raising approximately 763 billion HKD, a significant increase from 81 billion HKD in the same period last year [1] - The quality of listed companies is improving, and there is enhanced liquidity in the Hong Kong market, leading to increased interest from international investors in Chinese core assets [1][3] - A total of 47 A-share companies have announced plans for secondary listings in Hong Kong, with over 20 companies having officially submitted applications [2] Group 2 - The performance and liquidity of the Hong Kong secondary market have improved significantly, with a narrowing gap between A and H share pricing, attracting global investors [3] - Major international institutional investors, including sovereign funds and long-term funds, are actively participating in IPOs of leading companies, indicating rising interest in Chinese assets [3] - The Hong Kong Stock Exchange has established a fast-track approval process for A-share companies with market capitalizations exceeding 10 billion HKD, facilitating quicker listings [4] Group 3 - The pricing of H shares often reflects a discount compared to A shares, with examples showing discounts of approximately 20% for Midea Group and 6.5% for Ningde Times [4] - A-share companies typically issue a lower percentage of shares during their H share IPOs, often less than 5% for larger companies, allowing for more flexible refinancing options post-listing [4] - Companies are increasingly prioritizing overseas financing to support their growth strategies, such as establishing overseas factories or preparing for future capital needs [3][4] Group 4 - The improvement in the Hong Kong IPO ecosystem is accompanied by challenges, including differing requirements for information disclosure and corporate governance compared to the A-share market [6] - Companies need to enhance their capabilities and management standards to adapt to the challenges posed by the new market environment [6]

Core Viewpoint - Heng Rui Pharmaceutical officially listed on the Hong Kong Stock Exchange on May 23, 2023, marking a significant milestone in its internationalization strategy and achieving the largest financing scale in the Hong Kong pharmaceutical sector since 2020 [1][9]. Group 1: Listing Details - Heng Rui Pharmaceutical's IPO involved a global offering of approximately 225 million H-shares at an issue price of HKD 44.05, raising approximately HKD 9.89 billion [1]. - The stock opened at HKD 57 per share, a 29.4% increase from the issue price, and closed at HKD 55.15, a 25.2% increase [1]. - The listing is the second largest IPO in Hong Kong for 2025, following the leading battery manufacturer CATL [1]. Group 2: Company Leadership and Strategy - Vice Chairman Dai Hongbin emphasized that the listing is a crucial step for Heng Rui to enter the international capital market and accelerate its innovation and internationalization [2][3]. - The company aims to leverage this listing to enhance its global cooperation network and continue its focus on innovative research and development [3][10]. - Dai Hongbin's recent appointment as Vice Chairman reflects a strategic shift in the company's leadership, allowing him to play a more significant role in external communications and strategic planning [6]. Group 3: Historical Context and Future Outlook - Heng Rui Pharmaceutical, founded in 1970, has evolved from a local pharmaceutical factory to a significant player in the Chinese pharmaceutical industry, previously reaching a market value of over 600 billion yuan [7]. - The company has established 14 R&D centers globally and initiated over 20 overseas clinical trials, indicating its commitment to international expansion [10]. - The funds raised from the IPO will support clinical research and the development of innovative platforms, aiming to create first-in-class and best-in-class products [11].