Investment Rating - The industry investment rating is "Buy" (maintained) [2] Core Viewpoints - The domestic innovative drug industry is expected to reach an inflection point in 2025, transitioning from capital-driven to profit-driven trends, presenting opportunities for both performance and valuation recovery [5][28] - The basic fundamentals are showing marginal changes that continue to support a recovery in the secondary market, with innovative products being commercialized and leading innovative drug companies entering a profit cycle [6][29] - Continuous release of supportive policies for innovative drugs, including the introduction of the first Class B medical insurance directory, is expected to further expand the market scale [7][30] Summary by Sections Industry Performance - Over the past 12 months, the relative return of the industry compared to the CSI 300 index was 34.1%, with an absolute return of 53.9% [3] Investment Recommendations - The report emphasizes two main investment lines: 1. Pharma companies transitioning to innovation, which have strong performance resilience and are expected to see valuation increases. Recommended companies include Huadong Medicine, Aosaikang, and Health元 [9][30] 2. Biotech companies that are continuously growing and have potential products for overseas registration [9][30] Market Analysis and Outlook - The innovative drug sector is benefiting from significant overseas licensing deals, indicating a strong upward trend in the market. The report highlights the importance of focusing on the commercialization value of research pipelines and the impact of the 2025 national medical insurance directory negotiations [8][30] - The report notes that the innovative drug industry is entering a new profit-driven cycle, with a three-dimensional stock selection framework based on clinical demand, technology platforms, and product strength [7][30]