Investment Rating - The report does not explicitly provide an investment rating for the erectile dysfunction (ED) drug industry in China [1]. Core Insights - The Chinese ED drug market is experiencing strong demand and continuous growth, with a shift from traditional medical needs to broader sexual function enhancement [21]. - The market is characterized by increasing competition from domestic generic drugs and new drug developments, which are expected to intensify in the future [21]. - The leading products in the market, such as Sildenafil (Viagra) and Tadalafil (Cialis), have established strong brand recognition and market presence, making it challenging for new entrants to compete [16]. Summary by Sections Current Competitive Landscape - The competitive landscape of the Chinese ED drug market includes several key players with established products such as Sildenafil, Tadalafil, and others, with varying market entry dates and approval statuses [2]. - As of August 2025, the number of approved drug applications and suppliers for various ED drugs is as follows: Sildenafil (92 approvals, 53 suppliers), Tadalafil (172 approvals, 81 suppliers), and others [2]. Differentiation of New Drugs - New drugs like Sumenafil and Tonafadil are positioned with unique advantages, including lower effective doses, safety profiles, and potential for treating pulmonary arterial hypertension [7][9]. - Sumenafils' clinical trials indicate a lower incidence of adverse reactions compared to existing drugs, enhancing its market appeal [9]. Research Progress of PDE5 Inhibitors - The report highlights the ongoing research and development of PDE5 inhibitors, noting that the market is exploring new structural variants and indications beyond traditional uses [11]. - Traditional Chinese medicine is also recognized for its historical role in treating ED, with various herbal ingredients showing PDE5 inhibitory activity [11]. Market Demand and Future Trends - The demand for ED drugs is driven by both medical needs and psychological factors, with a growing acceptance of sexual health discussions in society [21]. - The market is expected to see an increase in competition from domestic companies entering through generics and innovative formulations, leading to a more dynamic market environment [21].

Report Summary 1. Investment Rating The provided content does not mention the industry investment rating. 2. Core Views - Qi Zhen, a fund manager at Huabao Fund, has a "policy + industry" dual - driven investment framework, focusing on innovative drugs in the medium term. His investment style combines growth and certainty with flexible valuation tolerance, and he prefers long - term holding with low turnover and portfolio structure optimization [3][17][45]. - Since Qi Zhen took office, Huabao Big Health A has achieved remarkable returns, outperforming over 90% of similar pharmaceutical theme funds. Although its drawdown control is slightly weak, it still offers good risk - return performance [4][13][44]. - Qi Zhen is an excellent fund manager with a profound professional background, a mature investment system, and strict risk awareness. He is expected to continue generating excess returns as the Chinese innovative drug industry develops [46]. 3. Summary by Directory 3.1 Fund Manager Information - **Manager Introduction**: Qi Zhen holds a biotechnology bachelor's degree and a biology doctorate from Shanghai Jiao Tong University. He has worked in Northeast Securities and Essence Securities and joined Huabao Fund in October 2020. Since February 2023, he has been the fund manager of Huabao Big Health Hybrid Securities Investment Fund [4][9][44]. - **Managed Product Introduction** - **Representative Product**: Qi Zhen has managed Huabao Big Health A (006881.OF) since February 28, 2023. As of September 30, 2025, its total scale is 268 million yuan [4][10][44]. - **Representative Product Net Value Performance**: After excluding the 3 - month establishment period, Huabao Big Health A significantly outperformed the CSI All - Pharmaceutical Index, recording a cumulative positive excess return of 60.00%. Its return performance ranks among the top in pharmaceutical theme funds, surpassing over 90% of similar funds [11][13][15]. 3.2 Fund Manager Investment Ability Analysis - **Investment Scope - Policy + Industry Dual - Driven, Medium - Term Focus on Innovative Drugs**: Qi Zhen has a biological professional background and a large amount of professional reading. His investment framework is "policy + industry" dual - driven. He focuses on innovative drugs, with a position ratio of over 90%. He mines Alpha stocks with pipeline differentiation or expected inflection points and adjusts the portfolio dynamically [20][21][45]. - **Stock - Holding Characteristics - Balancing Growth and Certainty, Flexible Valuation Tolerance**: For innovative drug companies, Qi Zhen uses pipeline market value conversion for valuation, considering factors such as clinical stage success rate and management credibility. He gives higher valuation space to innovative drugs and focuses more on static valuation and performance improvement in traditional sub - industries [29][45]. - **Operation Characteristics - Preference for Long - Term Holding, Low Turnover, and Portfolio Structure Optimization**: Qi Zhen's operation strategy is mainly long - term holding of core positions, with an annualized turnover rate of only 2 - 3 times. He prefers to invest when the stock price is at the bottom or oversold. He controls drawdown by adjusting the portfolio structure rather than market timing and shows flexibility in A/H share allocation [35][36][45]. 3.3 Summary - Qi Zhen is an outstanding fund manager with a "policy + industry" analysis framework, pipeline market value valuation method, and multi - level risk control system. He is expected to create excess returns as the Chinese innovative drug industry develops. Investors can allocate his products to participate in the investment opportunities of the Chinese pharmaceutical industry upgrade [46]. 3.4 Appendix - The appendix provides product elements of Huabao Big Health A, including fund name, abbreviation, full name, establishment date, comparison benchmark, investment target, investment scope, management fee rate, and current fund manager's tenure [48].

Group 1: Report Summary - The report analyzes the investment value of Zhang Jintao, a fund manager at Huabao Fund, with a focus on his performance in managing Huabao Pharmaceutical Biology A [1][4]. - Zhang Jintao has developed an investment methodology that combines industry cycle analysis with a multi - dimensional framework, showing strong adaptability in the current era of global opportunities for Chinese innovative drugs [5][20]. - Since Zhang Jintao took office, Huabao Pharmaceutical Biology A has achieved above - average returns among pharmaceutical theme funds, outperforming nearly 80% of its peers, with relatively strong offensive capabilities [4][16]. Group 2: Fund Manager Information 2.1 Fund Manager Introduction - Zhang Jintao has worked in multiple financial institutions, including Huatai United Securities, ABC Fortune Fund, etc. He joined Huabao Fund in April 2021 and has served as the fund manager of multiple funds since May 2021 [4][10]. 2.2 Management Product Introduction 2.2.1 Representative Product - Zhang Jintao has managed Huabao Pharmaceutical Biology A (240020.OF) since May 7, 2021, with a total scale of 629 million yuan as of September 30, 2025 [11]. 2.2.2 Representative Product Net Value Performance - After Zhang Jintao took office, excluding the 3 - month construction period, Huabao Pharmaceutical Biology A significantly outperformed the All - Index Pharmaceutical Index, achieving a cumulative positive excess return of 40.27% [12]. - In terms of performance among peers, it ranks in the upper - middle position, but its risk - control indicators such as volatility are relatively weak. Overall, it still has good cost - effectiveness [16]. Group 3: Fund Manager Investment Ability Analysis 3.1 Investment Scope - Guided by Industry Cycle and Anchored by Market Value Space - Zhang Jintao's investment system is based on a deep understanding of the "five - year cycle" of the pharmaceutical industry. He believes that the Chinese innovative drug industry has entered the stage of results realization after a long - term R & D investment period [21]. - He has constructed a "policy - industry - valuation" three - dimensional decision - making framework. The policy dimension focuses on understanding policy intentions; the industry dimension focuses on verifying industry and company fundamentals; the valuation dimension calculates the long - term target market value to evaluate risk - return ratios [21][22]. 3.2 Holding Characteristics - Portfolio Construction Highlights Industry Thinking - Zhang Jintao highly concentrates on the innovative drug sector, aiming to obtain alpha returns within the innovative drug industry by focusing on companies with upcoming blockbuster products or in the rapid - volume - growth stage [20][30]. - He also strategically allocates about 8% of the portfolio to the CXO sector as a supplement and risk - hedge. His average holding period is about 1 - 2 years, and he emphasizes dynamic adjustment [30]. 3.3 Operational Characteristics - Keeping Pace with the Times and Dynamically Optimizing - Zhang Jintao maintains a high stock position, believing that it is difficult to obtain excess returns through position timing in the pharmaceutical industry. Instead, he focuses on stock selection [35]. - The portfolio's turnover mainly comes from the optimization of non - core positions. The top ten heavy - holding stocks remain relatively stable, while the tail positions are adjusted more frequently to track new industry trends [35]. - The holding concentration is adjusted dynamically according to the industry stage, with a relatively dispersed strategy in the early stage and a gradually increasing concentration as the industry trend becomes clearer [35]. Group 4: Conclusion - Zhang Jintao's investment methodology combines industry - level strategic judgment with individual - stock tactical selection, showing strong adaptability and viability in the context of the global opportunities for Chinese innovative drugs [45][46]. - Huabao Pharmaceutical Biology A, under his management, has achieved good performance among pharmaceutical theme funds, with relatively strong offensive capabilities but slightly weaker defensiveness [44].

Market Overview - The Shanghai Composite Index closed at 3939.81 points, with a decline of 0.81%, and the total trading volume of A-shares reached 1,945.96 billion yuan [1] Stocks Breaking the Annual Line - A total of 35 A-shares have surpassed the annual line, with notable stocks showing significant deviation rates including: - Guangyun Technology with a deviation rate of 19.13% - Longxun Co., Ltd. at 15.24% - Central Plaza at 7.88% [1] Top Performers - The top three stocks with the highest deviation rates are: 1. Guangyun Technology: Today's price increase of 19.99%, turnover rate of 9.16%, annual line price of 13.81 yuan, latest price at 16.45 yuan [1] 2. Longxun Co., Ltd.: Price increase of 20.00%, turnover rate of 19.74%, annual line price of 69.30 yuan, latest price at 79.86 yuan [1] 3. Central Plaza: Price increase of 10.11%, turnover rate of 9.48%, annual line price of 3.63 yuan, latest price at 3.92 yuan [1] Additional Notable Stocks - Other stocks that have recently crossed the annual line with lower deviation rates include: - Tianlong Group, Jinyu Medical, and Meili Cloud, which have just crossed the annual line [1]

Core Points - The Shanghai Composite Index is at 3937.29 points, with a decrease of 0.87%, and the total trading volume of A-shares is 1,593.98 billion yuan [1] - 30 A-shares have surpassed their annual line today, with notable stocks showing significant deviation rates [1] Summary by Category Stock Performance - Notable stocks that have broken through the annual line include: - Guangyun Technology (光云科技) with a deviation rate of 19.13% and a price increase of 19.99% [1] - Longxun Co., Ltd. (龙迅股份) with a deviation rate of 15.24% and a price increase of 20.00% [1] - Haohan Depth (浩瀚深度) with a deviation rate of 6.26% and a price increase of 8.69% [1] Trading Metrics - The trading volume for A-shares today is reported at 1,593.98 billion yuan [1] - The turnover rates for the top stocks that broke through the annual line vary, with Longxun Co., Ltd. at 17.65% and Guangyun Technology at 8.82% [1] Deviation Rates - Stocks with smaller deviation rates that have just crossed the annual line include: - Tianlong Group (天龙集团) with a deviation rate of 0.00% [2] - Jinyu Medical (金域医学) with a deviation rate of 0.05% [2] - Lihua Micro (力合微) with a deviation rate of 0.07% [2]

Group 1 - The report emphasizes the rapid development of China's innovative pharmaceuticals, highlighting that the number of clinical trials has reached a global leading position, with a significant increase in new drug approvals [3][5][7] - Chinese pharmaceutical companies are transitioning from a "fast follower" to an "innovation leader" model, actively engaging in cutting-edge fields such as ADC, bispecific antibodies, and mRNA vaccines, with a notable increase in the number of products in late-stage development [8][11][18] - The report identifies two main investment directions: the transformation of biotech companies into biopharma and the revaluation of traditional pharmaceutical companies during their innovation transition, suggesting specific companies to watch in both categories [3][4] Group 2 - China's integration into the global innovative drug value chain is deepening, with a growing number of global multi-center clinical trials led by Chinese companies, indicating a shift in the global drug development landscape [3][24] - The report notes that the contribution of Chinese companies to global clinical trials has significantly increased, with a projection of 1,903 innovative drug clinical trials registered in China by 2024 [7][24] - The report highlights the increasing competitiveness of Chinese companies in high-potential therapeutic areas, particularly in oncology, metabolic diseases, and autoimmune diseases, with substantial market shares in these segments [18][19] Group 3 - The report discusses the rising trend of BD (business development) transactions involving Chinese assets, with a notable increase in transaction amounts and numbers, indicating China's growing influence in the global pharmaceutical innovation landscape [33][44] - It highlights that the majority of license-out projects are now in early stages, reflecting the international interest in early-stage Chinese innovations, particularly in oncology and metabolic therapies [39][44] - The report points out that major multinational corporations (MNCs) are increasingly seeking next-generation blockbuster products from China to fill revenue gaps due to impending patent expirations [62][66]

Investment Rating - The report continues to recommend the innovative drug and medical device industry chain, indicating a high level of investment interest in this sector [1][5]. Core Views - The report highlights the high prosperity in innovative drugs, suggesting potential value revaluation for companies such as Jiangsu Heng Rui Medicine, Hansoh Pharmaceutical Group, 3SBio, Sichuan Kelun Pharmaceutical, and Jiangsu Nhwa Pharmaceutical [2][5]. - It emphasizes the importance of Biopharma/Biotech companies with innovative pipelines and performance entering a volume increase phase, including Innovent Biologics, BeiGene, and others [2][5]. - The report also points out the recovery potential for leading medical equipment companies like United Imaging Healthcare, Lepu Medical, and others [2][5]. Summary by Sections A-Shares Performance - In the second week of November 2025, the A-Shares pharmaceutical sector outperformed, with the SW Pharmaceutical and Biological index rising by 3.3% while the SHCOMP fell by 0.2% [2][30]. - The pharmaceutical commerce, chemical raw materials, and chemical preparations sub-sectors showed strong performance, with increases of 5.7%, 5.1%, and 4.4% respectively [2][30]. - Notable stock gains included GDK (+61.6%), HPGC Renmintongtai Pharmaceutical Corporation (+61.1%), and Chengda Pharmaceuticals Co., Ltd. (+58.3%) [2][30]. Hong Kong and U.S. Market Performance - The Hong Kong pharmaceutical sector also outperformed, with the Hang Seng Healthcare index increasing by 6.8% and the Hong Kong Biotechnology index by 7.1% [2][31]. - In the U.S., the S&P Healthcare Select Sector rose by 3.9%, significantly outperforming the S&P 500, which only increased by 0.1% [2][32]. Valuation Metrics - As of November 14, 2025, the premium level of the pharmaceutical sector relative to all A-Shares is at a normal level, with a current relative premium rate of 77.0% [2][15]. - The report provides earnings forecasts and valuation metrics for various companies, indicating expected growth rates and price-to-earnings ratios for the coming years [6][7].

Group 1 - The core viewpoint indicates a decline in innovative drug concept stocks, with notable drops in companies such as Kanglong Chemical, Kelun Pharmaceutical, and Xinlitai, among others [1] - The innovative drug-related ETFs have also experienced a decline, with an overall drop exceeding 2% [1] - Despite the downturn, there have been positive developments in China's biotechnology sector, including 35 research presentations at the ESMO 2025 conference and significant collaborations like the $11.4 billion partnership between Innovent Biologics and Takeda, highlighting global recognition of Chinese innovative drug value [2]

Core Viewpoint - Sichuan Kelun Pharmaceutical Co., Ltd. has received drug registration approval from the National Medical Products Administration for its injectable drug Paliperidone Palmitate, which is expected to enhance the company's competitiveness in the central nervous system field [1][2][3]. Group 1: Drug Information - The drug name is Paliperidone Palmitate, available in injection form with specifications of 75mg, 100mg, and 150mg per 0.75ml, 1.0ml, and 1.5ml respectively [1]. - It is classified as a Class 4 chemical drug and has been approved for domestic production [1]. - The drug was developed by Janssen Pharmaceuticals and was first approved in the U.S. in 2009, with China approving its import in 2011 [2]. Group 2: Advantages and Market Potential - Paliperidone Palmitate is the first long-acting atypical antipsychotic approved for monthly administration, offering advantages such as improved patient compliance, reduced risk of disease relapse, and enhanced safety [2]. - The drug is widely recommended in various authoritative guidelines and is included in the national essential drug list and Class B medical insurance [2]. - The global sales forecast for 2024 is approximately $3.5 billion [2]. Group 3: Company Technology and Pipeline - The long-acting microcrystal injection platform of the company has independent intellectual property rights and addresses stability issues in microcrystal formulations [3]. - Paliperidone Palmitate is the first product approved from this microcrystal platform, with multiple other products under development [3]. - The approval of this drug is expected to enhance the company's pipeline competitiveness in the central nervous system disease sector [3].

Core Viewpoint - Kolun Pharmaceutical's subsidiary, Hunan Kolun Pharmaceutical Co., Ltd., has received drug registration approval from the National Medical Products Administration for its chemical drug "Paliperidone Palmitate Injection," which is used for the treatment of acute and maintenance phases of schizophrenia [1] Group 1 - The approved drug is specifically indicated for the treatment of schizophrenia, addressing both acute and maintenance phases [1] - The approval marks a significant milestone for Kolun Pharmaceutical, enhancing its product portfolio in the psychiatric treatment segment [1]