Economic Indicators - The core PCE price index in the U.S. met expectations, reinforcing the anticipation of an interest rate cut this week[1] - U.S. consumer spending showed almost no growth in September, indicating a cautious approach to spending amid persistent inflation[11] - The Michigan consumer confidence index rose for the first time in five months, with inflation expectations dropping to the lowest since January[11] Market Performance - The Shanghai Composite Index closed up 0.7% at 3902.81 points, while the Shenzhen Component rose 1.08% and the ChiNext Index increased by 1.36%[1] - The Hong Kong Hang Seng Index gained 0.58% to close at 26085.08 points, with the Hang Seng Tech Index up 0.84%[1] - The average daily trading volume in the Hong Kong stock market increased by 95% year-on-year to 2558 billion HKD in the first 11 months of the year[9] Geopolitical Tensions - Japan's defense ministry accused China of locking radar on Japanese military aircraft, escalating tensions between the two nations[11] - The Chinese military responded, claiming Japanese aircraft have repeatedly approached and interfered with Chinese fighter training, posing safety risks[11] Financial Market Developments - Prudential Corporation Holdings submitted an IPO application for ICICI Asset Management in India, planning to sell up to 9.91% of its stake[13] - China’s central bank increased its gold reserves for the 13th consecutive month, adding 30,000 ounces in November, bringing total reserves to approximately 74.12 million ounces[11]

Summary of Key Points from the Equity Research Report Industry Overview - The report focuses on the **China equity market** and its performance outlook for 2026, highlighting the transition from a liquidity-driven rally to one supported by earnings growth [3][10]. Core Insights and Arguments Market Resilience - The China equity market is expected to remain resilient in 2026 due to: - Improving innovation capabilities, supported by tech-related IPOs [4][33]. - Abundant liquidity from deposit migration, insurance funds, and mutual funds [4][51]. - An earnings upcycle, particularly in information technology and materials, with consensus earnings revisions of **6.1%** and **4.1%** year-to-date, respectively [4][58]. Rebalancing Trends - A shift is anticipated in 2026 from a tech-centric market to a **tech-and-consumer** focus, driven by: - Consumer names benefiting from low valuations and policy support [5][71]. - The expansion of the AI rally from overseas to domestic value chains [5][71]. - A recommendation for a balanced investment approach, as growth is expected to outperform value [5][71]. Risks and Opportunities - **Upside Risks**: - Potential policy measures to stimulate the economy, particularly in consumer services and infrastructure [6]. - **Downside Risks**: - Concerns regarding the real estate sector, particularly sluggish sales in first-tier cities and issues surrounding Vanke's bonds [6]. - Elevated valuations in the AI sector amid discussions of a potential bubble [6]. Earnings and Valuation Insights - The report maintains end-2026 index targets for SHCOMP at **4,500**, CSI300 at **5,400**, and SZCOMP at **16,000**, indicating potential upsides of **16-24%** driven by earnings growth rather than re-rating [3][20]. - The earnings growth forecast for 2026 includes: - **11.5%** for SHCOMP, **14.8%** for CSI300, and **26.7%** for SZCOMP [21]. - A significant divergence in sector performance, with information technology expected to deliver the highest year-on-year growth rate of **39.4%** [58]. Investment Themes and Stock Picks - The report identifies four investment themes with ten related stocks: 1. **AI names with lower PEG**: Innolight and Shennan Circuits. 2. **Going global**: CATL, Hansoh Pharma, and Wuxi XDC. 3. **Underweight industries**: Media, Luzhou Laojiao, and Bank of Ningbo. 4. **Fiscal stimulus**: Jinjiang Hotels and Pinggao Electric [7]. Additional Important Insights - The report emphasizes the importance of innovation as a key catalyst for the stock market, with high-tech sector profits projected to rise to over **RMB 2.2 trillion** in 2025, up from **RMB 1.4 trillion** in 2015 [30]. - The increasing number of IPOs in high-tech sectors indicates a strong focus on innovation, with significant activity in industrials, IT, and consumer discretionary sectors [42][49]. - Liquidity is expected to remain robust, with non-bank deposits increasing by **RMB 6.4 trillion** since April 2025 and mutual fund issuance up **89%** year-on-year [51][54]. This comprehensive analysis provides a detailed outlook on the China equity market, highlighting key trends, risks, and investment opportunities for 2026.

Group 1 - The top three stocks with the highest short-selling ratios are New World Development Co. Ltd. (100.00%), China Resources Beer (100.00%), and AIA Group Ltd. (100.00%) [1][2] - The stocks with the highest short-selling amounts are Xiaomi Corporation (2.196 billion), Ping An Insurance (1.956 billion), and Alibaba Group (1.160 billion) [1][3] - The stocks with the highest deviation values are Bank of China (52.21%), China Mobile (41.86%), and Café de Coral Holdings (40.03%) [1][2] Group 2 - The top ten short-selling ratio rankings include New World Development Co. Ltd. (100.00%), China Resources Beer (100.00%), and AIA Group Ltd. (100.00%) [2] - The top ten short-selling amounts include Xiaomi Corporation (2.196 billion), Ping An Insurance (1.956 billion), and Alibaba Group (1.160 billion) [3] - The top ten deviation values include Bank of China (52.21%), China Mobile (41.86%), and Café de Coral Holdings (40.03%) [3]

Core Viewpoint - Hansoh Pharmaceutical has successfully added two new indications for its innovative drug Amelot® to the updated National Basic Medical Insurance, Work Injury Insurance, and Maternity Insurance Drug List (2025) [1] Group 1: Drug Inclusion and Updates - The innovative drug Amelot® has been included for two new indications in the 2025 National Medical Insurance Directory [1] - The drugs Saintrolai® and Hengmu® have all indications renewed for inclusion in the 2025 National Medical Insurance Directory [1] - The updated National Directory will officially take effect on January 1, 2026 [1] Group 2: Ongoing Agreements and New Additions - The innovative drugs Fumarate Methanesulfonate Tablets (brand name: Hansoh Xinfeng®), Pegylated Liraglutide Injection (brand name: Fulaimi®), and Inalizumab Injection (brand name: Xinyue®) are currently under the National Medical Insurance Directory agreement, valid until December 31, 2026 [1] - The Methanesulfonate Chloride Injection (brand name: Mailinda®) has been included in the regular Category B of the National Medical Insurance Directory [1]

Group 1 - The core point of the news is that Hansoh Pharmaceutical (03692.HK) has successfully added two new indications for its innovative drug Amelot, which will be included in the updated National Medical Insurance Drug List for 2025, effective from January 1, 2026 [1] - The stock has received a majority of "buy" ratings from investment banks, with four firms issuing buy ratings in the last 90 days and an average target price of HKD 44.49 [1] - Huatai Securities recently issued a report giving Hansoh Pharmaceutical a buy rating with a target price of HKD 43.23 [1] Group 2 - Hansoh Pharmaceutical has a market capitalization of HKD 244.99 billion, ranking first in the chemical pharmaceutical industry [2] - Key performance indicators show that Hansoh has a Return on Equity (ROE) of 16.34%, significantly higher than the industry average of -11.38%, and a net profit margin of 42.17%, compared to the industry average of -34.83% [2] - The company also boasts a gross margin of 91.11%, which is well above the industry average of 50.96%, and a debt ratio of 11.33%, much lower than the industry average of 39.81% [2]

Core Insights - Hansoh Pharmaceutical (03692) announced that its innovative drug Amivantamab has successfully added two new indications to the 2025 National Medical Insurance Directory, which will be implemented on January 1, 2026 [1][2] Group 1: New Indications for Amivantamab - Amivantamab (brand name: 阿美乐) has received approval for two new indications for the treatment of adult non-small cell lung cancer (NSCLC) patients with specific EGFR mutations [1] - The new indications include treatment for patients who have previously undergone surgical resection and for those with locally advanced, unresectable NSCLC who have not shown disease progression during or after platinum-based chemotherapy [1] Group 2: Renewal of Other Drugs in the National Medical Insurance Directory - The drug Pemigatinib (brand name: 圣罗莱) has had its two indications renewed for inclusion in the 2025 National Medical Insurance Directory, specifically for treating anemia caused by chronic kidney disease [2] - The drug Adefovir Dipivoxil (brand name: 恒沐) has also been renewed for chronic hepatitis B treatment in adult patients [2] - Other innovative drugs such as Fluoromethylphenyl (brand name: 豪森昕福), Pegylated Liraglutide (brand name: 孚来美), and Inotuzumab Ozogamicin (brand name: 昕越) are currently under the National Medical Insurance Directory agreement until December 31, 2026 [2]

Core Insights - Hansoh Pharmaceutical (03692) announced that its innovative drug Amivantamab has successfully added two new indications to the 2025 National Medical Insurance Directory, effective January 1, 2026 [1][2] - The drug Pemigatinib (brand name: Saintrolai) has renewed its inclusion in the 2025 National Medical Insurance Directory for two indications related to anemia caused by chronic kidney disease [1] - The drug Adefovir Dipivoxil (brand name: Hengmu) has also renewed its inclusion for the treatment of chronic hepatitis B in adults [2] Summary by Category New Indications - Amivantamab (brand name: Amivale) has received approval for two new indications for the treatment of adult non-small cell lung cancer (NSCLC) patients with specific EGFR mutations [1] - The new indications include treatment for patients who have undergone surgical resection and those with locally advanced, unresectable NSCLC [1] Renewed Inclusion - Pemigatinib (brand name: Saintrolai) has renewed its inclusion for treating anemia in adults with chronic kidney disease, covering both non-dialysis and dialysis patients [1][2] - Adefovir Dipivoxil (brand name: Hengmu) has renewed its inclusion for chronic hepatitis B treatment in adults [2] Other Relevant Drugs - Other innovative drugs such as Fluoromethylphenidate (brand name: Haosenxinfu), Pegylated Liraglutide (brand name: Fulaimai), and Inalizumab (brand name: Xinyue) are currently under the National Medical Insurance Directory agreement until December 31, 2026 [2]

（股份代號：3692） 自願公告 有關創新藥納入2025國家醫保目錄的業務進展 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 Hansoh Pharmaceutical Group Company Limited 翰森製藥集團有限公司 （ 於開曼群島註冊成立的有限公司 ） 一、甲磺酸阿美替尼片（商品名：阿美樂®）於二零二五年三月、四月獲批的兩項 新增適應症納入2025國家醫保目錄： • 既往接受過手術切除治療的II-IIIB期具有表皮生長因子受體（「EGFR」） 外顯子 1 9 缺失或外顯子 21(L858R) 置換突變的成人非小細胞肺癌 （「NSCLC」）患者的治療。 • 接受含鉑放化療期間或之後未出現疾病進展，及具有EGFR外顯子19缺 失或外顯子21(L858R)置換突變的局部晚期、不可切除（III期）NSCLC成 人患者的治療。 二、培莫沙肽注射液（商品名：聖羅萊®）兩項適應症均續約納入2025國家醫保目 錄：用於治療因慢性腎臟病引起的貧血 ...

Group 1 - The report maintains an optimistic outlook for the Hong Kong stock market in 2026, predicting that the current bull market will continue to extend further and last longer, with the Hang Seng Index expected to reach 30,100 points by the end of 2026, based on a forecasted P/E ratio of 13.0 times [2][33] - Key investment opportunities are identified in areas such as strengthening the real economy, promoting technological innovation, developing new productive forces, and expanding domestic demand, which are critical directions outlined in the 14th Five-Year Plan [2][36] - The report emphasizes that sectors related to technological innovation and new productive forces are likely to be the most important investment themes in the coming years, suggesting a focus on consumer leading companies, undervalued high-yield state-owned enterprises, and domestic brands benefiting from accelerated substitution processes [2][36] Group 2 - The Hong Kong stock market showed strong performance in the first 11 months of 2025, with the Hang Seng Index rising by 28.9% and the Hang Seng Tech Index increasing by 25.3%, placing it among the top global stock markets [3][4] - All industry sectors within the Hang Seng classification experienced gains, with materials, healthcare, and information technology sectors performing particularly well, increasing by 134.3%, 74.1%, and 39.7% respectively [4][7] - The report notes that the average daily trading volume in the Hong Kong stock market reached HKD 2,558 billion, a 95% increase year-on-year, and net inflows from southbound trading amounted to RMB 12,806 billion, significantly higher than the previous year's RMB 6,543 billion [3][21] Group 3 - The report indicates that liquidity in the Hong Kong financial market remains ample, with the banking system's surplus rising significantly due to interventions by the Hong Kong Monetary Authority [15][16] - It highlights that southbound trading has played a crucial role in supporting the stability and recovery of the Hong Kong market amid rising geopolitical risks, with companies with mainland backgrounds accounting for 80.59% of the total market capitalization [21][22] - The report anticipates that southbound trading will achieve a net inflow of RMB 1.5 trillion in 2026, surpassing the expected net inflow of RMB 1.33 trillion in 2025 [21][22] Group 4 - The report discusses the normalcy of significant pullbacks during a bull market, noting that the Hang Seng Index experienced a 6.1% decline and the Hang Seng Tech Index a 16.6% decline from late September to late November 2025, which is considered a typical adjustment within historical bull markets [25][29] - It attributes the recent market adjustments to increased internal and external uncertainties, including geopolitical tensions and economic slowdowns, which have led to cautious investor sentiment [26][27] - Historical data shows that during past bull markets, the Hang Seng Index has experienced average pullbacks ranging from 6% to 20%, indicating that the current adjustments do not fundamentally alter the upward trend of the market [29] Group 5 - The report emphasizes the importance of economic construction as a central focus, suggesting that the recent political statements will boost confidence among entrepreneurs and investors, thereby enhancing the fundamentals of listed companies [33][36] - It outlines that the 14th Five-Year Plan prioritizes the strengthening of the real economy, technological self-reliance, and the expansion of domestic demand, which are expected to drive future market growth [35][36] - The report concludes that the increasing recognition of China's AI technology and the presence of high-quality investment targets in the Hong Kong market will attract both domestic and international capital, fostering a positive investment environment [37]

Core Viewpoint - The article discusses the shifting landscape of wealth in China over the past decade, highlighting the rise of new wealthy individuals in the "emotional" economy, contrasting with the decline of traditional real estate tycoons [4][6]. Group 1: New Wealth Creation - The top new wealthy individuals in 2025 include Xu Gaoming and Xu Dongbo from Laopu Gold, with a wealth of 69.5 billion yuan, and Li Qibin and Qi Yan from Card Game, with 60 billion yuan [6]. - Companies like Pop Mart and Laopu Gold reported revenue and net profit growth exceeding 200% year-on-year in their latest financial reports [6][9]. - Card Game's revenue is projected to surpass 10 billion yuan in 2024, with a net profit margin exceeding 40%, outperforming Pop Mart [6]. Group 2: Emotional Economy - The rise of brands like milk tea chains has created a new class of wealthy individuals, emphasizing emotional connection and cultural identity over mere product functionality [9]. - The article notes a significant shift from high-tech internet and manufacturing wealth creation in 2015 to emotional-driven businesses in 2025 [9][10]. Group 3: Investment Challenges - Many of the new wealthy individuals faced initial skepticism from major investment firms, which underestimated their potential before they achieved significant financial success [10][11]. - For instance, Pop Mart's founder struggled to secure funding until a key investor provided crucial support, leading to the brand's eventual success [10]. Group 4: Female Entrepreneurs - The article highlights the increasing presence of female entrepreneurs on the wealth list, with 22.4% of the total being women, many of whom are first-generation wealth creators [12][15]. - Notable female figures include Zong Fuli, who became the first female billionaire in the beverage industry, and Zhong Huijuan, who emerged as a new female billionaire in the pharmaceutical sector [15][16]. Group 5: Decline of Real Estate Tycoons - The article notes a significant decline in the representation of real estate tycoons on the wealth list, dropping from 30% to just 10% over the past decade [25][28]. - High-profile figures like Wang Jianlin and Xu Jiayin have fallen from grace due to financial struggles and legal issues, reflecting the broader challenges facing the real estate sector [28][29]. Group 6: Market Dynamics - The article discusses the changing dynamics in the market, with traditional brands in the apparel sector facing difficulties adapting to new consumer preferences and competition from emerging brands [30][32]. - Companies like Meisibangwei and others have struggled with financial losses and are attempting to pivot their business models to survive in a competitive landscape [30].