Core Viewpoint - The Chinese innovative drug industry is undergoing an unprecedented value reassessment, with a recent acceleration in this trend [1][2][6] Group 1: Market Performance - As of May 30, 2023, stocks of Rongchang Biologics and 3SBio have surged over 200% since the beginning of the year, with several other innovative drug stocks doubling in price [1] - The Hong Kong innovative drug sector experienced a significant pullback on June 2, attributed to profit-taking after substantial gains [2][3] - Various innovative drug-themed funds have rebounded significantly, with some products showing annual increases exceeding 50% [1][2] Group 2: Fund Performance - Innovative drug ETFs have dominated the performance rankings, with top performers like Huatai-PB's Hang Seng Innovative Drug ETF rising by 42.84% year-to-date [2] - Actively managed innovative drug funds have also seen substantial gains, with Longview Medical Industry Select Fund and Yongying Medical Innovation Fund increasing by 64.42% and 55.34% respectively [2] Group 3: Clinical Developments - On May 30, Summit Therapeutics reported disappointing results from a Phase III trial for its PD-1/VEGF dual antibody, leading to a 30% drop in its stock price [3] - Concerns over clinical data from certain companies have contributed to market pullbacks, with some fund managers suggesting that profit-taking is a factor [3] Group 4: Global Expansion - A notable trend is the increasing competitiveness and attractiveness of Chinese innovative drug companies in the global pharmaceutical industry [5] - In 2024, China is expected to account for 30% of global transactions involving upfront payments exceeding $50 million, indicating a growing trend in overseas licensing deals [5] Group 5: Future Outlook - Multiple fund managers believe that the innovative drug sector has opportunities across valuation, fundamentals, and industry cycles, suggesting a potential for mid-term sustainability [6] - The current valuation levels of innovative drugs are considered relatively low, with expectations of a shift in valuation systems as more companies report profits [6]