Core Viewpoint - On May 21, 2023, Sangfor Technologies (688336) closed at 47.24 CNY, reaching the daily limit up with a trading volume of 395 million CNY and a turnover rate of 1.37% [2] Trading Activity - The stock was listed on the daily trading leaderboard due to a price increase of 15% at the close [2] - The top five trading departments accounted for a total transaction of 255 million CNY, with a buying amount of 106 million CNY and a selling amount of 148 million CNY, resulting in a net sell of approximately 42 million CNY [2] - The third largest buying department was the Shanghai-Hong Kong Stock Connect, with a buying amount of 17.5 million CNY [2] - An institutional proprietary seat was noted among the selling departments, with a selling amount of 48.4 million CNY [2] Fund Flow - The stock experienced a net inflow of main funds amounting to approximately 5.6 million CNY on the same day [3] - The top buying departments included Guotai Junan Securities Beijing Financial Street with 52.1 million CNY and Aijian Securities Shanghai with 18.9 million CNY [3] - The top selling department was Tianfeng Securities Shanghai with 51.1 million CNY [3]

Market Overview - On May 21, the Shanghai Composite Index rose by 0.21%, the Shenzhen Component Index increased by 0.44%, and the ChiNext Index gained 0.83% [2] - A total of 53 stocks appeared on the daily trading list, with the highest net inflow of funds into Luxiao Technology (002617.SZ), amounting to 220 million yuan [2][4] Stock Performance - Luxiao Technology saw a closing price increase of 10.03% with a turnover rate of 13.85%, and it accounted for 10.48% of the total trading volume [4][6] - The stock with the highest net outflow was Chengfei Integration (002190.SZ), which experienced a net sell-off of 244 million yuan and a closing price drop of 10% with a turnover rate of 25.08% [4][6] Institutional Activity - On the same day, 27 stocks featured institutional activity, with a total net buy of 53.71 million yuan, where institutions net bought 13 stocks and net sold 14 stocks [6][12] - The stock with the highest institutional net buy was Shutaishen (300204.SZ), which closed up by 20.02% with a turnover rate of 8.01% [7][10] Northbound Capital Flow - Northbound funds participated in 9 stocks, with a total net outflow of 235 million yuan; the net buy was 34.5 million yuan from the Shanghai Stock Connect and a net sell of 269 million yuan from the Shenzhen Stock Connect [12][14] - The stock with the highest net buy from northbound funds was Hunan Development (000722.SZ), with a net buy of 24.53 million yuan, representing 1.84% of the total trading volume [12][14] Divergence in Institutional and Northbound Fund Activity - Notably, both institutions and northbound funds net sold Jingji Zhino (京基智农), while there was a divergence in the activity for San Sheng Guo Jian (三生国健) and Guo Xuan Gao Ke (国轩高科) [14][15] - Institutions net sold San Sheng Guo Jian by 48.37 million yuan, while northbound funds net bought 17.52 million yuan; for Guo Xuan Gao Ke, institutions net bought 25.42 million yuan, contrasting with a net sell of 249 million yuan from northbound funds [14][15]

Market Overview - A-shares maintained a fluctuating upward trend on May 21, with the ChiNext Index rising over 1% at one point, and the North China 50 Index hitting a new high during the session [1] - The three major A-share indices collectively rose, with the Shanghai Composite Index closing up 0.21% at 3387.57 points, the Shenzhen Component Index up 0.44% at 10294.22 points, and the ChiNext Index up 0.83% at 2065.39 points [1] - The total trading volume in the Shanghai and Shenzhen markets was approximately 1214.6 billion yuan, roughly equivalent to the trading volume on May 20 [1] Stock Movements - Multiple high-priced stocks exhibited volatility, with Chengfei Integration hitting the daily limit down after a significant rise earlier in the year, closing down over 5% with a trading volume exceeding 3.9 billion yuan [3][6] - Zhongyida's stock price surged over 312.90% from March 10 to May 20, but the company reported no significant changes in its fundamentals and is expected to incur losses in 2024 [5] - Nanjing Port and Wangzi New Materials both experienced "limit-up" and "limit-down" movements during the trading session [7][9] Sector Performance Gold Sector - The gold sector saw significant gains, with stocks like Laishen Tongling and Western Gold hitting the daily limit up, while other gold-related stocks also posted gains of over 5% [11] - Domestic and international gold prices continued to rise, with the main futures contract for gold in Shanghai increasing by over 3% [12] Coal Sector - The coal sector showed strength, with Dayou Energy hitting the daily limit up and Shanmei International and Jinkong Coal Industry rising by approximately 6% [14] - Analysts noted that the coal supply and demand dynamics are showing signs of recovery, with expectations for coal prices to stabilize and potentially rise in June [16]

Core Viewpoint - The recent announcement by Sangfor Biopharma regarding a licensing agreement with Pfizer has significantly impacted the innovative drug industry, leading to a surge in the company's stock price for three consecutive trading days [1][4]. Company Summary - Sangfor Biopharma, along with its affiliates, has granted Pfizer exclusive rights to develop, produce, and commercialize a dual-specific antibody product targeting both PD-1 and VEGF outside of mainland China [1][3]. - The initial payment for this licensing agreement is set at $1.25 billion, with potential milestone payments reaching up to $4.8 billion, marking a record for domestic innovative drugs entering international markets [3][5]. - The company holds a 30% stake in the licensing agreement, while its affiliate, Shenyang Sangfor, retains a 70% stake [2][3]. Industry Summary - The licensing deal reflects the growing recognition of Chinese innovative drugs in international markets, with over 10 domestic biotech companies having engaged in similar licensing agreements with foreign firms [5]. - The collaboration signifies a notable advancement in the research and development capabilities of Chinese pharmaceutical companies, particularly in the oncology sector, indicating that they are reaching international standards [5]. - The dual-targeting approach of the licensed product is expected to enhance anti-tumor efficacy while potentially reducing side effects compared to traditional combination therapies [3][4].

Group 1 - The recombinant protein concept sector rose by 2.52%, ranking second among concept sectors, with 30 stocks increasing in value [1][2] - Notable gainers included Sangon Biotech, which hit the daily limit with a 20% increase, and other significant performers such as Sai Sheng Pharmaceutical, Jie Ya Co., and Jinbo Bio, which rose by 16.37%, 9.31%, and 9.17% respectively [1][2] - The sector experienced a net inflow of 221 million yuan from main funds, with 23 stocks receiving net inflows, and 8 stocks exceeding 10 million yuan in net inflow [2][3] Group 2 - Leading the net inflow was Xilong Scientific, which saw a net inflow of 242 million yuan, followed by Rejuve Pharmaceutical and Zexin Pharmaceutical with net inflows of 37.78 million yuan and 32.48 million yuan respectively [2][3] - The top three stocks by net inflow ratio were Xilong Scientific at 20.85%, Zexin Pharmaceutical at 8.53%, and Chengdu Xian Dao at 7.96% [3][4] - Stocks with notable declines included Furuida, Zhongyuan Xiehe, and Wanmei Biological, which fell by 2.25%, 1.92%, and 1.80% respectively [1][5]

Market Performance - Major stock indices in China saw significant gains, with the North China 50 Index rising over 1% to reach a new high [1] - The FTSE China A50 Index futures increased by more than 1%, while the offshore RMB appreciated by 101 points against the USD, currently at 7.2041 [2] - The Shanghai Composite Index closed up 0.38% at 3393.49 points, with the Shenzhen Component Index up 0.53% and the ChiNext Index up 0.99% [2] Sector Highlights - The coal sector showed strong performance, with companies like Dayou Energy and Jinkong Coal Industry hitting the daily limit, and Shanmei International rising nearly 6% [2] - The solid-state battery concept gained traction, with companies like Lingpai Technology and Ningde Times seeing significant price increases, with Lingpai Technology hitting a 20% limit up [2][4] - The innovative drug sector remained active, with Shuyitai and SanSheng Guojian both hitting the daily limit, and SaiSheng Pharmaceutical rising over 12% [7] Company Developments - Ningde Times, which recently listed on the Hong Kong Stock Exchange, saw its stock rise by over 9% during trading [3] - Bubble Mart reached a new historical high, with its stock price rising over 5% to 220 HKD per share, bringing its market capitalization close to 300 billion HKD [10] - Bubble Mart's Labubu 3.0 product has gained immense popularity globally, leading to long queues in stores and significant price premiums on secondary markets [12] Industry Trends - The solid-state battery sector is identified as a core focus within the lithium battery industry, with companies actively launching new products and materials seeing increased demand [6] - The innovative drug market in China is projected to grow from 132.5 billion USD in 2019 to 159.2 billion USD by 2024, maintaining a global market share of around 15% [9]

Investment Rating - The report maintains an "Overweight" rating for the company [5][8]. Core Views - The company has reached a significant licensing agreement with Pfizer for the 707 project, with potential upfront and milestone payments totaling up to $6.05 billion, of which the company will receive 30% [1][2]. - The 707 project shows promising clinical data and development progress, indicating strong potential for expanding indications and global commercialization [1][3]. - The company is expected to see a revenue surge due to licensing income, leading to an upward revision of profit forecasts for 2025-2027 [5][13]. Summary by Sections Licensing Agreement - The agreement with Pfizer includes an upfront payment of $1.25 billion and up to $4.8 billion in milestone payments, along with a double-digit percentage royalty on product sales [2][3]. Clinical Development - The 707 project has demonstrated excellent early clinical data, with an overall response rate (ORR) of 71% in first-line non-small cell lung cancer (NSCLC) and 33% in third-line colorectal cancer (CRC) [3]. - The project is currently in various stages of clinical trials, including Phase III for PD-L1+ NSCLC and Phase II for other indications [3]. Autoimmune Pipeline - The company has four late-stage autoimmune pipeline products expected to reach the market by 2026, with significant milestones anticipated in 2024 and 2025 [4]. - Early-stage products are also progressing, with potential for overseas licensing [4]. Financial Projections - The company’s revenue is projected to increase significantly, with estimates of RMB 4.08 billion in 2025, reflecting a 241.77% increase from previous estimates [7][13]. - The net profit attributable to the parent company is expected to reach RMB 2.94 billion in 2025, marking a substantial increase [7][13]. Valuation - The report assigns a target price of RMB 48.64, reflecting a valuation of RMB 30 billion based on comparable biotech companies [5][9].

Core Viewpoint - The recent performance of the STAR Market 100 Index and its ETF indicates a positive trend, with significant movements in individual stocks and a notable partnership between a Chinese pharmaceutical company and Pfizer [3][4][5]. Group 1: STAR Market 100 Index Performance - As of May 21, 2025, the STAR Market 100 Index rose by 0.21%, with notable increases in stocks such as Sangfor Technologies (19.99%) and Zai Lab (3.58%) [3]. - The STAR Market 100 Index ETF (588030) also increased by 0.21%, with a recent price of 0.97 yuan, and a one-month cumulative increase of 2.01% [3]. - The ETF's trading volume showed a turnover rate of 1.66%, with a total transaction value of 1.04 billion yuan [3]. Group 2: Fund Flows and Growth - The STAR Market 100 Index ETF experienced a net inflow of 2.30 billion yuan over the last five trading days, with an average daily net inflow of 459.57 million yuan [4]. - The ETF's recent financing net purchase reached 1.36 million yuan, with a total financing balance of 307 million yuan [5]. - The ETF's one-year net value increased by 18.03%, with a maximum monthly return of 27.67% since its inception [5]. Group 3: Strategic Partnerships - Recently, Sangfor Technologies and its subsidiaries entered into an exclusive licensing agreement with Pfizer, granting Pfizer global rights for a dual-specific antibody in China [3][4]. Group 4: Market Position and Trends - The Chinese innovative drug sector is expected to become a preferred choice for business development transactions due to its low R&D costs and high efficiency, positioning China as a center for low-cost R&D and production [4]. - The STAR Market 100 Index ETF closely tracks the STAR Market 100 Index, which consists of 100 medium-cap stocks with good liquidity from the STAR Market [4].

Group 1 - The Innovation Drug ETF (560900) increased by 1.60% with a turnover of 4.89% and a transaction volume of 1.6387 million yuan as of May 21, 2025 [1] - The CSI Innovation Drug Industry Index (931152) rose by 1.24%, with constituent stocks such as Sangfor Technologies (688336) up by 19.99%, Kanghong Pharmaceutical (002773) up by 6.38%, and Sinocelltech (688520) up by 6.23% [1] - As of May 20, the Innovation Drug ETF (560900) saw a year-to-date increase of 1 million shares, ranking among the top in terms of new share growth compared to similar funds [1] Group 2 - On May 20, Sangfor Technologies announced a licensing agreement with related parties Sangfor Pharmaceutical and Shenyang Sangfor, involving exclusive global development, production, and commercialization rights for a product with Pfizer, with an upfront payment of $1.25 billion and potential milestone payments of up to $4.8 billion [1] - The pharmaceutical and biotechnology industry is characterized by a resonance of innovation and domestic demand, with innovation being the core direction of the pharmaceutical sector according to Industrial Securities [1] Group 3 - The Innovation Drug ETF closely tracks the CSI Innovation Drug Industry Index, which selects up to 50 representative listed companies involved in innovative drug research and development to reflect the overall performance of the innovative drug industry [2] - Morgan Asset Management integrates its "Global Vision Investment Technology" product line to help investors layout quality technology companies globally, seizing investment opportunities amid the new wave of technology driven by AI [2] Group 4 - In passive investment, Morgan Hang Seng Technology ETF (QDII) provides a one-click layout for Hong Kong stock technology assets, while Morgan CSI Innovation Drug Industry ETF (560900) offers a one-click layout for Chinese innovative pharmaceutical companies [3] - Morgan NASDAQ 100 Index Fund (QDII) allows for a one-click investment in global technology leaders [3]

Macro Insights - In April, the general fiscal expenditure increased by 12.9% year-on-year, indicating a continued moderate easing of fiscal policy, although the momentum of fiscal expansion showed seasonal slowdown [2] - The general fiscal revenue turned positive with a 2.7% year-on-year increase, primarily driven by a significant rebound in government fund revenue [2] - The fiscal deficit recorded 336.7 billion yuan in April, an increase of 247.9 billion yuan compared to the same period last year, maintaining a loose fiscal stance [2] Strategy Insights - The market consensus remains fragmented, with domestic investors showing varied interest across different sectors, while foreign capital continues to flow into the A-share market, albeit with structural divergence [3] - The recent downgrade of the US sovereign credit rating by Moody's from Aaa to Aa1 reflects worsening long-term debt issues, which may influence global asset prices [3] - The recent interest rate cuts by major banks aim to support the real economy while maintaining reasonable bank interest margins, although ongoing rate declines may increase deposit-taking pressures [6] Fixed Income Insights - The recent adjustments in deposit and LPR rates indicate a comprehensive easing of policy rates, with the one-year LPR now at 3.0% and various deposit rates reduced [4] - The 2024 city investment report highlights structural improvements in local debt management, although inherent pressures remain, particularly regarding profitability and debt repayment capabilities [10] Technology Sector Insights - NVIDIA's recent announcements at Computex 2025 indicate a shift towards an open ecosystem for AI deployment, which may attract large cloud service providers [7] - The competitive landscape among global battery manufacturers is intensifying, with domestic firms like CATL leveraging supply chain integration and diverse technology paths for global expansion [11] Company-Specific Insights - Nanjing E-commerce is undergoing a brand transformation aimed at enhancing product quality and restoring brand image, with expected revenue growth in 2024 [12] - Ningde Times' recent listing on the Hong Kong Stock Exchange is anticipated to bolster its global market competitiveness and facilitate international business expansion [13] - Trip.com reported a 16.2% year-on-year revenue increase in Q1 2025, driven by resilient domestic travel demand and strong growth in cross-border business [14] - Three Life Health's collaboration with Pfizer on the 707 project is expected to unlock significant commercial potential, with a maximum milestone payment of $6.05 billion [15] - Leap Motor's Q1 2025 performance exceeded expectations, with a revenue increase of 187.1% year-on-year, driven by high sales growth [17]